ASSIGNMENT BRIEF
QUALIFICATION UNIT NUMBER AND TITLE
PEARSON BTEC HND IN LAW (SRF) 11. PRINCIPLES OF EQUITY AND TRUSTS (LEVEL 5)
INTERNAL VERIFIER UNIT TUTOR
M WAQAS
DATE ISSUED SUBMISSION DATE RESUBMISSION DATE
THURSDAY, JANUARY 19, 2023
ASSIGNMENT TITLE
LEARNING OUTCOME AND ASSESSMENT CRITERIA
PASS MERIT DISTINCTION
LO1 ANALYSE THE PRINCIPLES AND DOCTRINES OF EQUITY AND THE
PURPOSE OF TRUSTS
P1 DISCUSS THE MEANING OF
M1 CRITICALLY ANALYSE THE
EQUITY AND ITS
PURPOSE OF EQUITY AND
RELATIONSHIP WITH COMMON LAW.
TRUSTS IN THEIR MODERN-DAY LO1 AND LO2
P2 ANALYSE THE PRINCIPAL
USES. D1 CRITICALLY EVALUATE THE
MODERN-DAY USE OF TRUSTS.
MODERN-DAY USE OF TRUSTS
LO2 EXAMINE THE RULES IN RELATION TO THE CREATION OF TRUSTS
AND THE IMPACT OF TRUSTS
P3 ANALYSE THE FORMALITIES FOR
BEING IMPROPERLY
CREATING A TRUST.
M2 CRITICALLY ANALYSE THE CONSTITUTED.
P4 DISCUSS THE DIFFERENCE
CONSEQUENCES OF FAILING TO
BETWEEN CONSTITUTED AND
UNCONSTITUTED TRUSTS, AND PROPERLY CONSTITUTE A
THEIR LEGAL IMPLICATIONS. TRUST.
LO3 DISTINGUISH BETWEEN THE DIFFERENT CATEGORIES OF TRUST
P5 DISCUSS THE DISTINCTION
BETWEEN IMPLIED,
RESULTING, CONSTRUCTIVE AND M3 ANALYSE THE LEGAL RULES
SECRET TRUSTS. RELATING TO THE VARIOUS LO3 AND LO4
P6 APPLY, IN GIVEN SITUATIONS, CATEGORIES OF TRUST IN
D2 JUSTIFY THE
THE RULES GIVEN SITUATIONS.
CONSEQUENCES OF THE
RELATING TO CHARITABLE AND
CREATION OF VARIOUS FORMS
NON-CHARITABLE TRUSTS.
OF TRUST AND THE
LO4 EVALUATE THE RULES IN RELATION TO BREACH OF TRUST AND
CONSEQUENCES FOR THEIR
EQUITABLE REMEDIES
BREACH.
P7 EVALUATE, IN GIVEN M4 CRITICALLY EVALUATE THE
SITUATIONS, THE POWERS
CONSEQUENCES OF BREACH
AND DUTIES OF TRUSTEES.
OF TRUST AND THE
P8 DISCUSS THE RULES IN RELATION
ACCOMPANYING EQUITABLE
TO BREACH OF TRUST AND THE
EQUITABLE REMEDIES. REMEDIES.
SUBMISSION FORMAT
THE SUBMISSION COMPRISES ESSAYS AND PROPOSITIONS.
THE ESSAYS WILL BE IN THE FORM OF AN INTRODUCTION, BODY PARAGRAPHS AND A CONCLUSION. STUDENTS NEED
TO USE SINGLE SPACING AND FONT STYLE TIMES NEW ROMAN, SIZE 11. STUDENTS ARE REQUIRED TO EXPLAIN EACH
CASE SEPARATELY, USING THE GUIDANCE PROVIDED. ALL WORK MUST BE SUPPORTED WITH RESEARCH AND
REFERENCED USING THE OSCOLA REFERENCING SYSTEM. THE WORD LIMIT IS SPECIFIED.
THE PROPOSITIONS WILL HAVE TO FOLLOW A PROPER AND COHERENT STRUCTURE. IRAC RULE SHOULD BE FOLLOWED
TO SOLVE THEM, MEANING ISSUES SHOULD BE IDENTIFIED, LAW/RULE SHOULD BE STATED. APPLICATION OF THE RULE
TO THE FACTS IS REQUIRED, AND A CLEAR AND COHERENT CONCLUSION SHOULD BE GIVEN AT THE END. STUDENTS
NEED TO USE SINGLE SPACING AND FONT STYLE TIMES NEW ROMAN, SIZE 11. STUDENTS ARE REQUIRED TO EXPLAIN
EACH CASE SEPARATELY, USING THE GUIDANCE PROVIDED. ALL WORK MUST BE SUPPORTED WITH RESEARCH AND
REFERENCED USING THE OSCOLA REFERENCING SYSTEM. THE WORD LIMIT IS SPECIFIED.
ASSIGNMENT SCENARIO AND GUIDANCE
PART A
(LO1 & LO2)
Q.1.
a. Discuss the development of Equity and its relationship with Common law (LO1, P1).
b. Adam is married and wants his wife to receive the income from his shares for the rest of her life but also
wants to give the capital( title to the shares) to his children once his wife has passed on. Moreover, Adam
wants the capital to be distributed among his children in proportion to their financial needs. Discuss how the
device of trust can help Adam in setting up these arrangements and critically evaluate and analyse the
modern-day uses of trust (LO1, P2, M1, D1).
Q.2. Lily declared a trust in writing of 75 shares in a private company, with Eve as sole trustee and Finn as sole
beneficiary. Lily sent the declaration of trust to Eve, along with a completed share transfer form, and the share
certificates. Eve put the declaration, transfer form, and certificates in her wall safe.
Finn then orally agreed to sell his interest under the trust to Robert for £50,000. Robert orally declared that he held
any interest he received from Finn on trust for Alia. Advise the parties by analysing the formalities and critically
analysing and evaluating the impact of the defective constitution of trust (LO2, P3, P4, M2, D1).
PART B
(LO3 & LO4)
Q.3.
a. Betty was an elderly widow who owned a house in London in fee simple. Five years ago, she transferred her
title to Chloe as part of an oral arrangement between them, in which Chloe agreed to hold the house in trust
for Betty for life and have the remainder for herself. Chloe became the registered owner of the fee simple
estate. Betty continued to live alone in the house and pay all expenses related to it. Betty died recently. Den
has been appointed as the administrator of Betty’s estate. As her only living relative, he is entitled to any part
of her estate that has not been disposed of by her will. He claims that Chloe holds the house in London in a
resulting trust for Betty’s estate. Advise Chloe by applying the legislation and case law related to the resulting
trust and justify the consequence of creating the resulting trust. Also, briefly distinguish it from the implied
and constructive trust (LO3, P5, M3, D2).
b. Five years ago, Dodd made a will that stated, “I hereby leave my car to my dear friend, Eve, to use as we
discussed.” The will was witnessed by Adam and Mark. Later that same day, Dodd told Eve that he and Judy
had once had a secret affair while she was married and that he wanted her to have the car after him. Ryan,
Dodd’s son, and sole heir wants to know who is entitled to the car. Advise Dodd on the relevant legal
provisions that relate to secret trusts and justify the consequence of creating the secret trust (LO3, P5, M3,
D2).
Q.4. Adam died recently. According to his will, the residue of his entire estate is to be held in trust as follows:
a. to help needy actors, artists, and musicians;
b. to help teach drama, arts, and music at Adam’s old school;
c. to construct and maintain a monument to the memory of the great British figure skater Jennifer Nicks who
died in 1980.
Hans and Freddie were appointed as the executors of Adam’s estate and the trustees of his will trusts. They seek your
advice concerning the validity of those trusts. Adam’s old school closed down last year.
Advise Hans and Freddie by applying the legal rules in relation to charitable and non-charitable purpose trusts and
justify the consequences of their creation (LO3, P6, M3, D2).
Q.5. Ellen settled £3 million in trust, with her daughters Linda and Maggie as trustees. Under the terms of the trust:
a) the trustees may distribute the income and capital as they see fit among the settlor’s children and grandchildren for
50 years and then shall distribute any remainder assets as they see fit among the children and grandchildren then
living;
b) the trustees shall invest the trust assets only within the UK; c) the trustees shall not be liable for any breach of trust
unless it is caused by their own fraud or gross neglect.
With the UK economy struggling, Linda and Maggie decided to invest £250,000 of trust money in France and
£250,000 of trust money in Germany. The French investments have risen in value to £300,000, but the German
investments have fallen in value to £200,000.
Maggie’s friend Alex owns a UK business that needed money to continue operating. Maggie convinced Linda that it
would be a good investment, so they invested £100,000 of trust money in Alex’s business. That investment has fallen
in value to £80,000.
Ellen asked Linda and Maggie if they could use the trust to help Florence, who is Ellen’s friend and has always been
‘like a daughter’ to Ellen. Linda and Maggie paid £10,000 from the trust to Florence.
Vivienne is Ellen’s granddaughter. She is unhappy with the way in which Linda and Maggie have been performing
the trust. Advise Vivienne.
PART A - GUIDANCE
(LO1 & LO2)
Q.1.
a. Students are required to demonstrate that English law comprises two systems of case law: common law and
Equity. They should highlight the problems with common law that led to the development of equity for
instance inadequacy of remedies, lack of flexibility, etc. It is important to recognise that although equity may
appear to be synonymous with fairness or justice and the rules of equity may appear to be simply what any
given judge thinks is a fair and just response to particular facts but equity is a set of rules and operates on
maxims. It operated on a system of precedent that is exactly the same as that operated at law. It is pertinent
to mention that the initial problem of lack of predictability and rule of law when equity did not operate on
maxims and system of precedent. Students are required to discuss the evolution to the greater desire that
equitable rules be more predictable which can be seen from the criticism to the concept of unconscionability-
Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2000] EWCA Civ 502, [2001]
Ch 437; Pennington v Waine [2002] EWCA Civ 227, [2002] 1 WLR 2075; Pitt v Holt [2013] UKSC 26,
[2013] 2 AC 108. Students are required to discuss some of the equitable maxims briefly with a case where
the decision is based on the maxim for instance ‘he who comes to equity must come with clean hands’ can
be seen in action in D & C Builders v Rees, ‘delay defeats equity’ was applied in Leaf v International
Galleries, ‘equity does not assist a volunteer’ in Milroy v Lord, and ‘equity looks upon as done that which
ought to be done’ in Re Rose [P1].
Students are then required to discuss the conflict that arose between common law and equity and how it was
resolved by the Earl of Oxford’s case in 1616. Discussion on the implication of it is required with specific
reference to Maitland’s Course of Lectures. Moreover, students are required to discuss how the courts of
equity and common law operated in different courts prior to the passing of Judicature Acts 1873-75 and
how now every High Court is empowered to administer the law of both jurisdictions. Students are required
to discuss the fusion debate here, i.e. whether the merger is administrative or of substance [P1].
b. Students are required to discuss the principal modern day use of trusts. Before that, they are required to define
the concept of trusts and how it works in practice. Device of trust allows the rights to be given to a person
who is incapable of managing rights e.g. a child or a mentally challenged person and assets may be left for
charitable purposes [P2].
Moreover, trusts provide flexibility since in a discretionary trust like the one in question, funds can be
released to those members of the society with greater needs. Also, trusts can provide for the enjoyment of
rights to be split on a plane of time. Students are required to apply the law to the present scenario. How trusts
will help Adam achieve this. Who will own legal title and equitable titles? [P2]
Trusts for instance can allow the pooling of assets and the appointment of expert trustees, such as accountants,
financial planners and lawyers [P2]. One might ask, after the global financial crisis, whether this rationale is
convincing, but the theory is clear. A critical analysis and evaluation of this use is required [M1, D1]
Finally, the commercial reality is that trusts are often used to lower taxation liability and to protect assets
from being claimed by creditors [P2]. This raises questions about the degree to which governments should
be sanguine about such activity, and the line between (permissible) tax minimisation and (impermissible) tax
evasion [M1. D1].
Q.2. Student is required to discuss whether the trust made by L in F’s favour is valid and enforceable. 3 conditions of
a trust must be stated briefly: valid declaration of trust meaning the 3 certainties and administrative workability, the
constitution of trust, and proof of trust. Here, there is a valid declaration since intention, subject matter, and object
was clear. But there was a problem with the constitution. The issue is whether delivery of the share transfer form and
the share certificates to E is sufficient to constitute the trust in F’s favour? Discussion on what steps are required to
transfer the legal title in shares/constitute the trust [P4]. Students are required to discuss the legal implication of
constituted and unconstituted trust by explaining the principles of Paul v Paul, Choithram v Pagarani, and Elison
V Elison. The important equitable maxim (rule) that ‘equity does not assist a volunteer’ and its two strands: ‘equity
will not enforce gratuitous promises’ and ‘equity will not perfect an imperfect gift’ need to be discussed in detail [P4]
Moreover, the students must discuss the general rule of Milroy v Lord (HL) and its extension by High Court in Khan
v Mehmood [P4] Students are required to apply the law to the facts presented. The facts are not similar to Pennington
so no unconscionability and hence the defect would not be cured. Extensive application is required here [M2].
Criticism that Khan v Mehmood can constitutionally not overrule the HOL’s decision of Milroy v Lord. Also,
Pennington v Waine, itself has been subjected to scathing criticism for instance the term unconscionability was not
properly defined, it is in direct conflict with Milroy, the reliance by the court on Choithram v Pagarani was
misplaced. Students are required to discuss all the criticisms and their counters in detail [D1]. Exception carved out in
Re Rose/Mascall v Mascall – where the donor has done everything in their power, the defect is cured, is relevant here.
Students are required to explain the decision in detail [P4]. Application of Re Rose and a definite conclusion are
required[M2]. Criticisms on Re Rose are central to discussion here. Two main criticisms must be discussed. Firstly,
the explanation as to why reliance in Re Rose on the maxim that equity sees as done that ought to be done from Land
Law (Walsh v Lonsdale) is misplaced. Secondly, how Robert Chambers ‘power analysis’ to explain Re Rose does
not justify Re Rose as per James Penner. Students are required to take a strong stance as to whose viewpoint is sound
[D1]. The formalities required to create a trust especially Paul v Constance, Re Kayford, and s.53(1)(b) of Law of
Property Act 1925 must be stated and application of it to the facts presented must be done [P3].
Another issue to be discussed here is whether F’s oral agreement amounts to a disposition of his subsisting equitable
interest and is therefore of no effect unless in writing? Discussion and application of s.53(1)(c) of LPA 1925,
Oughtred v IRC, and Neville v Wilson are required. There are no formalities required for F to make a contract to
sell his interest under the sub-trust to R and, because his interest relates to shares in a private company, the contract
will be specifically enforceable, meaning that there is a sub-sub-trust in favour of R, Oughtred v IRC notwithstanding
[P3]. Another issue here is whether, if F is indeed holding the shares on (vendor-purchaser) CT for R, he drops out of
the picture so that E holds directly on trust for R, and therefore whether F must nevertheless comply with s.53(1)(c)?
Grainge v Wilberforce, Re Lashmar, and Onslow v Wallis must be discussed and how Nelson v Greening & Sykes
has changed the law. Application of these cases is required [P3]. The next issue to be discussed here is whether R’s
declaration of trust in favour of Alia amounts to a disposition of his subsisting equitable interest and is therefore of no
effect unless in writing? As to R’s oral declaration of trust in favour of A, this will not amount to a disposition of
equitable interest and so will be valid, despite s.53(1)(c) LPA 1925 [P3]
PART B- GUIDANCE
(LO3)
Q.3.
a. Students must state that prima facie voluntary conveyance in the facts would mean a resulting trust would
arise [P5]. The subject matter in the facts being an interest in land might raise a problem with respect to the
interpretation of section 60(3) of the LPA1925. Conflicting cases of Ali v Khan and Lohia v Lohia on one
hand and Prest v Petrodel Resources (obiter of UKSC) and National Crime Agency v Dong (obiter dictim)
on the other hand must be discussed. Students must conclude that the effect of the transfer therefore depends
on what view one takes regarding the effect of section 60(3) [P5]. If the presumption of resulting trust arises,
the students are required to apply whether there is enough evidence to rebut it, especially in light of Hodgson
v Marks [M3]. Can Den in any way defend this by producing contrary evidence? [M3] Extensive discussion
on the academic debate is required as to why Resulting trusts arise or are created. Key players in the debate
are Williams Swadling, Robert Chambers, and Lord-Brown Wilkinson. Explain how they have explained
their viewpoints by citing case laws and analyse as to whose viewpoint is sound and closer to what the law
is. Whether Resulting trusts should arise in the situations they do arise? [D2] Moreover, discussion on what
are constructive trusts and when they arise, and how are they different from implied trust. Leading cases of
Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53 must be discussed to help explain
the distinction [P5]. Discussion on why do constructive trusts arise. Not simply by operation of law but very
good answers would discuss this with the help of distinction between institutional and remedial constructive
trusts. Whether they should arise in situations where they do arise [D2].
b. Students must identify the issue that who is entitled to the car. Identify the trust to be testamentary and what
are the conditions for it to be valid and enforceable under s.9 of the Wills Act 1837 [P5]. Identify it to be a
half-secret trust by applying the definition [M3]. Courts have tried to justify the enforcement of half-secret
trusts by fraud theory and Dehors the will theory (Blackwell v Blackwell) even though they do not comply
with s.9. Students are required to discuss that the fraud theory of Re Gardner is circular and did not cater to
the cases of half-secret trust & the expansion of fraud theory to cater to HST did not solve the problem of
fraud theory being circular. Moreover, ‘Dehors the will’ theory to justify the creation/enforcement of secret
trusts laid down in Blackwell v Blackwell is itself flawed. Students are required to explain and criticise this
theory in detail. Criticisms of Patricia Critchley that the theory wrongly characterises secret trusts as
intervivos and confuses the concepts of ‘Dehors the will’ and ‘Dehors the Wills Act’ are required to be
discussed in depth [D2]. Students must next move on to state the 3 conditions of Moss v Cooper that need
to be fulfilled to make secret trusts valid [P5]. Key cases Re Snowden, Kasperbauer v Griffith [2000],
Titcombe v Ison [2021] 1 WLUK 624), Re Keen must be cited with legal principles [P5]. Application of
these cases to the facts in a coherent way is required [M3].
Q.4. Student is required to discuss the validity of the three trusts over Adam’s entire residuary estate. Discussion on
when purpose trusts are valid and enforceable is required. Beneficiary principle of Morice v Bishop of Durham and
Re Endacott should be discussed. For part a and b, S.2(1) of Charities Act 2011, s.3(1) of CA 2011, s.4(2) of the
Act & Independent Schools Council v Charity Commission must be discussed. For part c, a discussion on private
purpose trust is required.
a. The issue is whether or not the trust to help needy actors, artists, and musicians is charitable under the head
of relief of poverty. Cite and apply S.3(1)(a), Re Coulthurst, Re Scarisbrick, and Dingle v Turner to
determine whether they are prima facie charitable. For the public benefit, cite and apply Verge v Somerville,
Dingle v Turner [P6, M3].
b. The issue in this part is whether or not the trust to help teach drama, arts, and music at Adam’s old school is
charitable under the head of the advancement of education. Cite and apply S.3(1)(b), Royal Choral Society
v IRC, Re Delius, and (s.3(1)(f)). Students are required to discuss whether the purpose is for the public
benefit. Cite and apply Re Pinion to determine whether it is beneficial or detrimental and Oppenheim v
Tobacco Securities to determine whether public or appreciably important section of public is in fact
benefiting. Application of legislation and cases to the facts is required [P6, M3].
c. This is not charitable but could be valid as an anomalous testamentary trust for the creation and maintenance
of a monument for a deceased person. Cite and apply Re Endacott and Musset v Bingle. The student needs
to state that trust for erection might be upheld but not for the maintenance since it goes against the perpetuity
period. Discuss and apply Lismore United Free Church Kirk-Session v M’Caig’s Trustees-if large
amount is given for this then it might not be upheld but state that this is only of persuasive value [P6, M3].
Students are required to explain why equity disallows the enforcement of private purpose trusts. A detailed
discussion of the beneficiary principle of Morice v Bishop of Durham and its two different interpretations
is important. The beneficiary principle being a ‘rights principle’ as propounded by Roxburgh J in Re Astor’s
ST or being an ‘enforcer principle’ is correct. Does any interpretation solve the problem of enforcement of
private purpose trusts [D2]?
Q.5. Explain that Vivienne is a beneficiary of a power of appointment and a discretionary trust and therefore she has
standing to sue the trustees and call for an account even though she might not receive any benefits from the trust. It
would explain that the investments in France and Germany were contrary to the terms of the trust and in breach of
trust; that the investment in Alex’s business was permitted by the terms of the trust but likely in breach of the trustee’s
duty of care and clearly in breach of Maggie’s fiduciary duty as a conflict of interest; that the payment to Florence
was unauthorised and in breach of trust. It would then explain that the account could be falsified to remove
unauthorised disbursements and surcharged to add income that should have been earned from proper investments; that
the beneficiaries could elect to adopt the successful investments in France and reject the German investments. Finally,
it would discuss whether the trustees are protected from personal liability by the exemption clause.
EVIDENCE
SUMMARY OF EVIDENCE REQUIRED BY STUDENT
CHECKLIST
Q.1. (1500-2000 words)
Q.2. (1800-2000 words)
PART A Q.3. (1800-2000 words)
Q.4. (1800-2000 words)
Q.5. (1800-2000 words)
