Equity And Trust

Introduction

Quentin is a wealthy businessman. He is conscious, as he approaches his eighties, that he may be in his twilight years and that he has not yet made proper provision for his children Adam and Diane. He calls them together and declares: ‘From now on I am holding my house Green Fields and my holiday home in Donegal for Adam. He should regard these two properties as his. In addition, I am holding half my shares in Alpha plc for Diane’s benefit. The house in Donegal is legally owned by Quentin’s wife Ursula. Quentin continues to receive the benefit of dividends declared by Alpha plc. When Diane queries this, Quentin replies that everything belongs to him anyway. This causes a row between Quentin and both children and Quentin declares to Adam and Diane ‘forget about anything I have said in the past. I am not giving either of you anything and I am cancelling any prior arrangements I have made in your favor’. Advise Adam and Diane. Include all relevant law to Northern Ireland Illustrate using cases and journals.

In this essay, author will discuss the equity and trust laws regarding the case of Quentin. Quentin was a businessman and he had agreements regarding property with his children Diane and Adam. While discussion about division of property, Quentin declared that he is cancelling all the prior agreements although some of the properties are mutually shared like shares and house; Quentin was getting benefits from them. The cases are related to the trust creation, beneficiary ownership and legal ownership under Ireland laws of property, equity and trust.

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DISCUSSION

Creation of Trust:

The question rises here was the creation of trust. As per the details, formalities and constitution must be considered in creation of trust. The creation of trust includes; 1) a deed of the trust; and 2) transfer of the property following all formalities. The house and the shares are under creation of trust. As he has declared the transfer of property, he is binding himself in agreement that is creating trust (see Milroy v Lord [1862]). The case stated that declaration of transfer of property means that Quentin is now a trustee for the property stated.

Need for Formalities :

In Neville v Wilson, court stated that formalities of a trust are not required in writing if the owner declared and shows his intention. Problems are raised for Adam and Diane in showing the intention of Quentin, which is why the Statute of Fraud 1677 introduced the need formalities. In case of Walsh v Lonsdale [1882] court held that the formalities are required for all property under a trust. Section 53(1) (c) of Law of Property Act 1925 (LPA 1925) discussed the trust formalities that are written disposition, intention, and equitable interest. The shares are example of equitable interest but there are deficiencies in formalities for Adam and Diane. In this case, some of the property (holiday home in Donegal and shares in Alpha plc) have been adequately transferred through transfer deed. Questions are remained if they can be properly administered. The prima facie facts of the case must be in the initial trust deed.

The Shares and House :

In the case of shares, the equitable interest, Section 53 (1) (C) must be followed. It means that actions must be subject, writing, and books of the company to register to enter transfer. For Adam and Diane with certain formalities, it is very important, because as external legal procedures to reach property. In case of shares, it Quentin is beneficiary owner and Diane is legal owner. Therefore, if the Adam does not prove formalities for the transfer of house, the property may be put into the hands of the administrator. Similar approach has been taken up in Hunter v Moss Rose, where the transfer of the right to adequate person for administration, as it is in the hands of a third party. The problem here is that there is no formal written form, even if the shares are transferred. This means that the trust was not duly constituted in relation to behavior and back to the farm. For Adam and Diane, there is more than one element simply wrong, it is likely that their behavior would be classified as deliberate deception; the funds have not been transferred. They may be alleged with respect to the payment of the shares.

Beneficial ownership v legal ownership :

As the property is the name of a Quentin, there was no written declaration of the trust. Quentin is the beneficial owner of the shares. Beneficial owner is a person who receives benefits from a security or property (shares) because the use and title belongs to him. Quentin is the beneficial owner and Diane is the legal owner. As per law, legal owner is entitled to receive the benefits. Proving Beneficial Interest: Judicial opinions in this regard are quite difficult to understand, but a recent case Kernott v Jones [2010] EWCA Civ 58 will help to clarify the issue of light. In this case, there was a coexistence of the couple £ 30,000 to buy a family home in the common name. Women make a deposit of £ 6,000 and the rest was financed by interest-only mortgage. A year later, the man helped the pound under a 2000 loan, paid by the people is an extension of the main structure; relationships expansion and household spending increased by approximately 140,000 pounds of the property that the couple has two children together, including big mortgage payments, to share. After that, the couple has lived for more than eight years of ownership, the separation, the man left. But the woman who kept the features and support payments for all children with little or no support for human intervention. The two sides have agreed on a policy of life insurance, by product, in part so that people buy the property. In its initial decision, the woman said to enjoy the value of 90% of the co-owners of property on the basis that is fair and equitable. The man appealed to the Supreme Court, saying it was not legitimate; the court must consider what is right and just in this case. (Keane, 2011, p.36) The case will be against Quentin for breach of trust. Quentin personal wealth might be the case if all the losses can be trusted as a violation of individual action for recovery. However, because of wealth has been exhausted, it may be that not all funds can be recovered in this way. The Quentin has violated the requirements of the trust money, in case of consent of the settler is no longer available. In this case, it is not right to pursue an innocent third party. For house and shares, it may not be possible to monitor the portfolio, as opposed to an account. Adam and Diane are not registered as the legal owner of the property under the law. They have a beneficial interest in property. Adam and Diane can ask the rightful owner to capture the head as a legal usufruct of such cooperation. If this is not possible for some reason, Adam and Diane can consider breach of agreement.

Refrences

Books

• Keane R., (2011) Equity and the Law of Trusts in the Republic of Ireland, Bloomsbury Professional, pp. 34 – 37 .
• Pettit, P. H. (2012). Equity and the Law of Trusts. Oxford University Press, pp. 141 – 143 .
• Pearce, R., Stevens, J., & Barr, W. (2010). The law of trusts and equitable obligations. Oxford University Press.

Cases Cited

• Kernott v Jones [2010] EWCA Civ 578 .
• Milroy v Lord [1862] .
• Walsh v Lonsdale [1882].

Laws and Reforms

• Law Reform Commission Act 1975 .
• Trustee (Authorized Investments) Order 1998 (SI 2002, No. 595).
• Trusts of Land and Appointment of Trustees Act 1996 (c 47) .
• Law of Property Act 1925 .