Answer 2 of the following 6 questions.
- “Knowing receipt should be called dishonest receipt. No one will be personally liable for receiving money in breach of trust unless they choose to spend it with actual knowledge of the breach, and that is dishonest.” Discuss.
- Cian is a trustee of Green Family Trust, and the beneficiaries have come to you for advice on the following issues.
(a) Six months ago, Cian bought shares in Badgers plc for £30,000. To fund this she made an unauthorised withdrawal of £15,000 from Green Family Trust’s bank account and used this cash, together with £15,000 of her own money. The shares were registered in her name and are now worth £24,000.
(b) Four months ago, Cian made an unauthorised withdrawal of £200,000 from Green Family Trust’s bank account. She paid this sum into her own account at HMC Bank which had an existing balance of £150,000. Later, Cian withdrew £300,000 to buy an apartment. She then paid off some of her debts with the £50,000 remaining in the account. Last week, she paid in £4,000 which was a gift from her father. The apartment is now worth £360,000.
Last week Cian was declared bankrupt and the beneficiaries fears that her creditors will be able to claim all her remaining assets.
Advise the beneficiaries on their potential remedies.
- The Skim family trust was established 10 years ago by the will of Fred Skim. It left his (substantial) residuary estate to Jameel and Kat to hold on trust for his widow Gladys for life, remainder to his daughters Dee (now aged 21) and Elsa (now aged 15). The will contained no provisions varying the trustee’s powers. Gladys is unhappy about various matters, on which she seeks your advice.
In February of this year Jameel decided to leave the running of the trust to Kat as he was busy in his work. Kat appointed her accountant boyfriend Lee as a new trustee. Gladys does not like Lee and is surprised that neither she nor Dee and Elsa were consulted. Since his appointment, Lee has decided to review the trust investment policy. Gladys is worried that Kat and Lee are buying too many shares in eco-investments, they are both keen environmental advocates. Last month Gladys was horrified to learn that Kat and Lee had transferred £10,000 from the trust fund to Dee, to help pay off her substantial overdraft. Elsa has asked for money to fund a school year in Italy to help with her studies but Kat and Lee have refused and Gladys thinks that they should give her the money. Also Gladys needs £5,000 to repair the roof of her house, which she owns absolutely.
Gladys asks the following:
(a) Can she remove Lee as a trustee?
(b) Will she be able to sue the trustees should the new investment policies cause a loss?
(c) Were the trustees acting within their powers in paying the £10,000 to Dee?
(d) Can Kat & Lee refuse to give Elsa the money for the trip?
(e) Can Gladys can get trust money to help with the repairs to the roof? (f) Can she end the trust?
- “Liability for breach of a fiduciary duty is too strict and needs to accept that all fiduciaries should be judged by their motivation.”
Explain and critically evaluate the liability of a fiduciary in breach.
- In 2015 Wing, Xavier, Yvonne and Zian paid different amounts of the purchase price of
Bridge House. Title to Bridge House was conveyed to all four of them as ‘legal and beneficial joint tenants’. They acquired it as a holiday home. In 2017, when Wing’s wife died, he decided to move abroad and re-train as a nurse. He therefore agreed to sell his interest in Bridge House to Yvonne. However, a month later Wing was offered a place on a degree programme at a college situated a few miles away from Bridge House. The others agreed that Wing could move in and live in Bridge House, with his teenage daughter, Uma, who uses a wheelchair. In May 2018 Xavier decided that he preferred to take his holidays abroad. He therefore had his interest valued before calling a meeting with the others at Bridge House. He asked if any of them would be interested in ‘buying him out’. After discussing the matter at length they ended up arguing. The next day Zian left a note on the kitchen worktop at Bridge House. It explained that the arguments made him realise he wanted to sell his interest in Bridge House. Uma mistakenly put the note in a kitchen bin before anybody had a chance to read it. In December 2018 Xavier mortgaged his interest in Bridge House to the Coastal Bank so that he could buy a cottage in Spain. Last month Xavier defaulted on his mortgage repayments. The Coastal Bank now wants Bridge House to be sold, as do Zian and Yvonne. However Wing wants to continue living in the house with Uma because he has not yet completed his college degree course.
Advise the Coastal Bank:
(a) as to the allocation of beneficial ownership in Bridge House; and (b) on the likelihood of Bridge House being sold.
- Wal has just purchased Greenacre from Debbie, who was the sole registered owner. Before
Debbie sold the property to Wal, she gave Russ a written document that was headed ‘lease’. It provided that Russ could have sole use of the cabin in her grounds for five years in return for a payment of £150 per month. She had validly leased her garage to Efra for 5 years in 2015. Efra used the garage as a workshop for her repair business. Debbie had allowed Efra to store her excess materials in a shed next to Debbie’s house. When the lease ended in 2020 Debbie validly renewed the lease for 10 years. Also Debbie’s mother, Jackie, has returned from a long trip around the world and explains to Wal that she paid the deposit for the house when Debbie originally purchased it.
Wal has told Russ to leave the cabin. Wal has also refused to allow Efra to use the shed and has refused to permit Jackie to enter the property, even to collect her clothes and other belongings which are in the ‘spare room’.
Advise Wal on the rights of Russ, Efra and Jackie.
How would your answer be different if this fact situation was governed entirely by the principles in unregistered land?
Type Of Service: Academic paper writing
Type Of assignment: Essay
Number of sources: 1
Academic Level: Undergraduate
Paper Format: OSCOLA
Line Spacing: Single
Language style: UK English