Equity and Trusts Uni Melb Semester Exam Notes 87

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These are the semester exam notes I relied on for a subject mark of 87% - complete version of everything. Contents ........................................................................................................................................................................... 2 Fiduciary 6 Introduction ................................................................................................................................................................ 6 Step 1: is it a recognised or status based fiduciary relationships ................................................................ 6 Step 2: Identifying fiduciary relationships – 6 Step : Horizontal relationships ................................................................................................................... 7 Step : Vertical relationships ............................................................................................................................... 8 Step : Equity and contract ............................................................................................................................... 9 Limits to fiduciary relationship ................................................................................................................................. 9 Fiduciary obligations survive contract termination ................................................................................................. 11 Abuse of fiduciary concept ..................................................................................................................................... 12 Scope of fiduciary relationships ......................................................................................................................... 13 Fiduciary duties and obligations .............................................................................................................................. 14 Introduction .............................................................................................................................................................. 14 Step 1: is it a recognised or status based fiduciary relationships .............................................................. 14 Step 2: Identifying fiduciary relationships – 14 Step : Horizontal relationships ................................................................................................................. 15 Step : Vertical relationships ............................................................................................................................. 16 Step : Equity and contract ............................................................................................................................. 17 Limits to fiduciary relationship ............................................................................................................................... 17 STEP 3 BREACH ....................................................................................................................................................... 19 Step 3: Not to obtain unauthorised profit ......................................................................................................... 20 Introduction & rules ............................................................................................................................................. 20 Step 3: Not to be in a position of conflict .......................................................................................................... 23 Relevant factors from case law: ............................................................................................................................ 24 Step 4: Defences to breach .......................................................................................................................................... 24 Step 5: Conclusion ...................................................................................................................................................... 25 Express trusts .............................................................................................................................................................. 26 Introduction – formal requirements ................................................................................................................... 27 Declaration ............................................................................................................................................................ 27 Transfer .................................................................................................................................................................. 28 Exceptions to statutory writing requirements ................................................................................................... 29 Section 53(1)(a) PLA .......................................................................................................................................... 31 3 Section 53(1)(b) PLA .......................................................................................................................................... 31 Section 53(1)(c) PLA .......................................................................................................................................... 32 Certainty of intention ............................................................................................................................................. 33 Introduction ........................................................................................................................................................... 35 Relevant matters to consider re intention ................................................................................................ 35 CONCLUSION: .................................................................................................................................................... 39 Certainty of subject matter ................................................................................................................................... 40 Introduction ........................................................................................................................................................... 41 Is property (subject matter) sufficiently identified? .......................................................................................... 41 Cases ....................................................................................................................................................................... 44 Certainty of objects ................................................................................................................................................ 44 STEP 1: How is the trust/power classified? ........................................................................................................ 49 STEP 2: Has certainty of object been satisfied? ............................................. Error! Bookmark not defined. Cases ....................................................................................................................................................................... 52 Quistclose trust – debts ........................................................................................................................................ 54 Introduction ......................................................................................................................................................... 55 Why would [trustee/lender] seek to argue a Quistclose trust arises here? ................................................. 55 Was a trust the mutual intention of the parties? ............................................................................................ 55 Conclusion: ........................................................................................................................................................... 58 What type of trust would be created? ................................................................................................................. 58 Charitable purpose trusts .............................................................................................. Error! Bookmark not defined. Introduction .............................................................................................................. Error! Bookmark not defined. Relief of poverty ...................................................................................................... Error! Bookmark not defined. Advancement of Education .................................................................................. Error! Bookmark not defined. Advancement of Religion ..................................................................................... Error! Bookmark not defined. Public benefit ........................................................................................................... Error! Bookmark not defined. Public benefit – benefit ........................................................................................ Error! Bookmark not defined. Public benefit – public .......................................................................................... Error! Bookmark not defined. Resulting trusts ........................................................................................................................................................... 65 Statements ................................................................................................................................................................... 65 Step 1: Introduction .............................................................................................................................................. 65 Step 2: Purchase price resulting trust ................................................................................................................. 65 Step 3: Automatic resulting trusts ............................................................................................................................... 71 Introduction .............................................................................................................................................................. 73 Presumed ................................................................................................................................................................. 73 Two types .............................................................................................................................................................. 73 Presumption of advancement – form of rebuttal ............................................................................................. 73 Relevant case law ................................................................................................................................................ 74 Automatic ................................................................................................................................................................. 78 Unjust enrichment re resulting trusts .......................................................................................................................... 80 Illegality re resulting trusts ......................................................................................................................................... 80 ESSAY - Presumption of advancement ....................................................................................................................... 81 Sarmas, ‘A Step in the Wrong Direction: The Emergence of Gender Neutrality in the Equitable Presumption of Advancement’ (1994) ................................................................................... 81 4 ■ The presumption of advancement is no longer necessary ........................................................ 81 Constructive trusts ..................................................................................................................................................... 81 Introduction .............................................................................................................................................................. 81 Compared to other trusts .................................................................................................................................... 82 Remedial aims ...................................................................................................................................................... 82 Principles ............................................................................................................................................................... 82 Common intention constructive trust ................................................................................................................ 82 Relevant case law ................................................................................................................................................ 84 Unconscionability (unconscionable assertion of title constructive trust) ................................................ 85 Relevant case law ................................................................................................................................................ 86 CT for Breach of fiduciary duty ........................................................................................................................... 88 Requirements ........................................................................................................................................................ 88 Standard situations .............................................................................................................................................. 88 Bribery .................................................................................................................................................................... 89 Bribery – relevant case law ................................................................................................................................. 89 Duties - Statements ....................................................................................................................................................... 91 Introduction ................................................................................................................................................................. 91 Overview ................................................................................................................................................................... 92 93 Table overview: ...................................................................................................................................................... 93 Duty to comply with the trust deed ................................................................................................................... 100 Duty to Act Gratuitously .................................................................................................................................... 100 Duty to Get in Trust Assets ........................................................................................................................... 102 Duty to Keep Accounts and Inform Beneficiaries ................................................................................ 102 Duty to Act Personally .................................................................................................................................... 103 Fiduciary duties? ....................................................................................................................................................... 104 Trustee’s Rights ......................................................................................................................................................... 106 Court’s directions ................................................................................................................................................ 106 Exculpation .......................................................................................................................................................... 106 Indemnity ............................................................................................................................................................. 107 Duties relating to investment .................................................................................................................................... 107 Step 1: introduction ............................................................................................................................................ 109 Step 2: Standard of care expected of trustee .................................................................................................... 109 Step 3: Is it an investment? ................................................................................................................................ 109 Step 4: Has X otherwise fulfilled their duties in making the investments, given the standard of care expected of a [professional/amateur]? ............................................................................................................ 110 Step 5: Court considerations when holding trustee liable ............................................................................... 111 [Essay question] policy implications: ...................................................................................................... 112 Duties and 112 Matters to be considered by trustee when investing ..................................................................................... 114 Exculpatory provisions and compensation ..................................................................................................... 114 Relevant case law – prudence ......................................................................................................................... 115 Relevant case law – “financial interest” and ESG ......................................................................................... 115 5 Remedies for breach of duties ..................................................................................... Error! Bookmark not defined. Remedies - Anesti Notes .................................................................................................... Error! Bookmark not defined. Step 1: Introduction .............................................................................................. Error! Bookmark not defined. Barnes v Addy Liability ...................................................................................... Error! Bookmark not defined. Knowing receipt .......................................................................................................... Error! Bookmark not defined. Knowing assistance ..................................................................................................... Error! Bookmark not defined. Comparing the Australian and UK approaches ....................................................... Error! Bookmark not defined. Statements ................................................................................................................... Error! Bookmark not defined. Personal remedies ................................................................................................................................................ 120 Account of Profits ................................................................................................................................................ 121 Barnes v Addy liability – third-party liability .................................................................................................. 121 Receipt ................................................................................................................................................................. 123 Assisting ............................................................................................................................................................... 125 Recovering misapplied property – tracing ........................................................................................................... 127 Step 1 – Tracing ........................................................................................................................................................ 128 Step 2 – claiming ...................................................................................................................................................... 128 Step 3 – Substitution ................................................................................................................................................. 128 Step 4 – Has there been dissipation? ......................................................................................................................... 129 Step 5 – issues ........................................................................................................................................................... 129 Step 5: Defences to tracing ....................................................................................................................................... 134 Step 6: what remedy? ................................................................................................................................................ 136