Basic de nition:
• A trust relationship can be identi ed when the legal title is owned by one person (trustee) and the
bene cial interest is held by the bene ciar
• Structure:
• Settlor (S
• Trustee (T
• Bene ciary (B
• Testator (TE
• Key case: McPhail v Doulton
Express Trusts (ET
• Can be private or public
• Private: for the bene t of private individuals or classes of individuals
• Public: bene t for members of the publi
• Express trusts are made expressly by the settlor (S)
• They can be inter vivos (made during the lifetime of S)
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• They can be testamentary (made through S’s will to take effect upon their death
• After death S is referred to as testator (TE)
• Fixed or discretionary E
• Fixed: B and their interests under T are clearly speci ed
• Discretionary: the property is held on trust by T who has some discretion over who within the
speci ed class is to bene t, what their share of the trust will be OR both
• Bare trusts and protective E
• Bare: when the property is left on trust and the trustee has no discretion or contingencies
• T’s only duty is to hold the property for
• B will be sole B who is sui juris: adult of mental capabilit
• E.g a stockbroker who holds the shares on behalf of anothe
• Protective: aimed at preventing an irresponsible B from wasting trust property — s.33 of Trustee Act
• Life interest which is determinable (can be forfeited) on events such as bankruptcy or sal
• At this point the PT ends and the property is held on DT for B
Classi cation of interest under trust
• Interest can be vested or contingent
• Vested: if it is a "present right to future enjoyment", such as a right to capital which is ready to take
effect when another B's interest end
• Contingent: An interest that does not take effect until a condition (contingency) has been met.
When the condition is met, the interest becomes a vested interest
• Important to look at the powers trustees have in relation to maintenance and advancement
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Implied Trust (IT)
• Not expressly created
• Resulting Trust arises when
a) there has been failure to validly create a trust
• Eg. failed formalities — Vandervell v IRC
• Automatic resulting trust as it happens regardless of the intention of
• In Vandervell a RT arose contrary to express intention of S
b) property is voluntarily transferred to another or purchased in the name of another
• Tinsley v Milligan
• Based on the presumed intention of resulting
• Lord Browne-Wilkinson said in Westdeutsche Landesbank v Islington LBC that RTs were
based on the intention of parties
• Constructive Trust
• Based on the presumed intention of parties
• Usually found by courts when it would be unconscionable for a person to deny another has an
interest in the property
• Situations when a CT may arise:
a) Breach of duciary duty — Keech v Sandford
b) Unauthorised pro t — AG for Hong Kong v Reid
c) Receipt of property belonging to another — El Ajou v Dollar Land
d) Immoral receipt — Re Sigsworth: receipt by killing
e) Family home — Grant v Edwards
• Statutory Trust:
• Statutory provisions that impose a trust
• Trust of Land and Appointment of Trustees Act 199
• Another area is in dealing with intestate estates
• When a person dies without leaving a valid will
• Administration of Estates Act 1925 provides for settlement to family members on the assumed
intention of the deceased
• Deceased person’s personal rep will be appointed by the courts (administrators not executors)
Trust Powers vs Fiduciary Powers
• Trust Powers (TP)
• T has powers within a trust
• E.g the power to intervene — s.3 of Trustee Act
• Or the appointment of agents
• Fiduciary Powers (FP)
• Not part of trust but are a pure powe
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• E.g. something that can be done but does not need to be done
• Person who may bene t from the power cannot make the duciary exercise the power but can make
sure that the duciary considers exercising the power and the donee of the power must not act
unreasonably in making the decision to exercise that power
• Re Hay’s Settlement Trusts
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