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Equity - Study Guide
Equity (Trinity College Dublin University of Dublin)
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Equity
Study Guide
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Topic One: Introduction and Historical Background
1.1.The Relationship Between Law and Equity
 Introduction
o Equity is the body of rules which evolved with the object of mitigating the severity of the
rules of the Common Law and its origin lay in the exercise by the Chancellor of the residual
discretionary power of the King to do justice in circumstances in which for one reason or
another, justice could not be obtained in a common law court.
o Equity is essentially a supplementary jurisdiction to that provided by the common law which
developed to provide remedies where the common law is deficient.
 It is difficult to define its scope and it is easier to define by examining the areas in
which an equitable jurisdiction has developed - the law of trusts, equitable interests in
land, discretionary remedies etc.
o Lord Millett, speaking extra-judicially, explained the supplementary nature of equitable
jurisdiction in these terms:
 ‘[T]he common law and equity are not two separate and parallel systems of law. The
common law is a complete system of law which could stand alone, but which if not
tempered by equity would often be productive of injustice; while equity is not a
complete and independent system of law and could not stand alone.’
o Tensions Between Doctrinal Principles and the Need to Ensure Fairness
 Virgo identifies unconscionability as an important characteristic of Equity. However, as
he points out,
 ‘Although doctrine and principle are vital to modern Equity, the very existence of
the most important equitable principle – [unconscionability] – might undermine
the doctrinal coherence of the subject
 Harding (2016) challenges the view that equity undermines the rule of law by arguing
that equity’s tolerance of indeterminacy constitutes a much smaller threat to the rule
of law than is commonly supposed and suggest that there are reasons to think that
equity makes a particular contribution to the rule of law by performing a function of
restraining unconscionable reliance on legal rights
 Historical Background and the Fusion Fallacy
o A major reform of the system of the administration of justice was affected by the Judicature
Acts 1873 and 1875 (followed in Ireland by the Judicature (Ireland) Act 1877 - based almost
entirely on the English equivalent) which established one Supreme Court of Judicature and
replaced the system of separate courts of common law and equity.
o The effect of the legislation was to establish one court system to apply the principles of
common law and equity.
 S.28(11) of the 1877 Act provided that where any conflict arose the equitable rule was
to prevail.
 The reason for that is that the reason for equity was that was a mechanism to
avoid the unfairness in common law, a gloss on the common law principles and
therefore should take priority. However, judges can vary on opinions and often
change their mind.
o Salt v Cooper (1880)
 Jessel MR remarked in relation to the issue of whether the Judicature Acts had affected
a fusion between law and equity: ‘But it was not any fusion, or anything of the kind, it
was the vesting in one tribunal the administration of law and equity in every cause,
action or dispute which should come before that tribunal.’
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 Biehler thinks that Jessel is right here
Walsh v Lonsdale (1882)
 However, this can be contrasted with the same judge’s remarks where Jessel MR
stated: ‘there are not two estates as there were formerly, one estate in common law
by reason of the payment of rent from year to year and an estate in equity under the
agreement. There is only one court and equity rules prevail in it.’
 Jessel saying the opposite here, caused enormous confusion
The generally accepted opinion at that time was that the result of this reform was to affect
a fusion of administration rather than a fusion of the substantive principles of the common
law and equity
United Scientific Holdings Ltd v Burnley Borough Council [1978]
 Lord Diplock put forward the view that the two systems had indeed been merged as
result of the Judicature Act.
 Lord Diplock stated at 925 that
 ‘the two systems of substantive law formerly administered by the courts of law
and chancery…. were fused’.
 Case about whether landlord had failed to fail to adhere to comply with a rent review
timetable was prevented from increasing the rent. Issue is that in equity time is not of
the essence. House of Lords had taken the view that principles had fused, and the rent
could be increased
Hynes v Independent Newspapers Ltd [1980]
 The findings of United Scientific Holdings appear to have been applied in the Irish
Supreme Court in this Case
 O’Higgins CJ spoke of the ‘fusion of common law and equitable rules’ being initiated by
the Judicature Act 1877.
 Tenant sought notice that rent review clause and run out of time, SC said that if a timestimulation wasn’t of the essence in essence before the judicature Act then that
prevails, and the rent could be increased
It is probably correct to say that the distinction between the two systems of law is still valid
and the dicta of the law lords in United Scientific has been criticised.
 Baker ‘The Future of Equity’ (1977) where he points out that ‘we may conclude that it
was the intention of the Judicature Acts to preserve the distinction between the rules
of law and equity’ and he comments that the dicta of Jessel MR in Salt v Cooper stated
the true position rather than his statement in Walsh v Lonsdale.
 Martin in ‘Fusion, Fallacy and Confusion’ [1994] argues that the view that flexibility and
capacity for development is best achieved by disregarding the legal or equitable origins
of causes of action, remedies or defences is misconceived. She asserts that it does not
seem that the fusion fallacy evidenced in cases such as United Scientific has become
established in England; on the contrary there has been a return to orthodoxy. Martin
concludes that while the two systems are working more closely together they are not
yet fused
Meagher v Dublin City Council [2013]
 Hogan J stated that insofar as the comments of both O’Higgins CJ and Kenny J in Hynes
suggested some form of substantive fusion – and it was far from clear that they do –
they must be regarded as obiter.
 He said that despite all the claims which have been made in respect of the fusion
of law and equity, there is no authority for the proposition that the court might
refuse to award damages for breach of contract or in tort on discretionary
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grounds such as undue delay per se or because the claimant has been guilty of
bad faith by, for example, exaggerating the nature of the claim, even though these
would be well established grounds for refusing any equitable relief which might
otherwise have been granted.
 He said that one may accordingly agree with the observations in Hanbury and Martin,
Modern Equity that while the two systems of law work ever more closely together and
draw mutual inspiration from each other, the two systems ‘are not yet fused’.
 Hogan J concluded that the doctrine of laches has no application to a claim at common
law for damages for breach of contract where that claim is not otherwise barred by the
Statute of Limitations.
 Equity more flexible, not barred by legislation but can be barred by doctrine of
laches (delay with other circumstances e.g. conduct, availability of alternative
remedies)
 Key point: in a perfectly common law standard claim wasn’t statute barred could not
equitable principles strike it out through doctrine of laches as held by Hogan J
In McGrath v Stewart [2016]
 Laffoy J referred to the conclusion reached by Hogan J in Meagher that the two
systems ‘are not yet fused’ and that in consequence, the doctrine of laches has no
application to a claim at common law for damages for breach of contract where that
claim is not otherwise barred by the Statute of Limitations. She stated that she agreed
with that conclusion.
1.2.Academic Commentary
Harding, 'Equity and the Rule of Law', (2016) 132 LQR 278
 Introduction
o Does equity undermine the rule of law?
 Critics argue that equity's tolerance of indeterminacy is anathema to rule of law values
and therefore should be abolished
 A notable exponent of this view is Peter Birks
 The view that equity and the rule of law are at odds with each other is not one limited
to equity's detractors - it is also a view expressed by those for whom equity is
defensible
 For most who think about the matter, that equity cannot be reconciled with rule of law
is simply assumed
 Equity's Tolerance of Indeterminacy and the Rule of Law
o Talk of equity’s tolerance of indeterminacy points to the fact that judges in equity respond
to legal indeterminacy in ways that do not attempt to resolve or overcome it. Thus, to the
extent that equity tolerates indeterminacy, judge deliberately decline to formulate and
follow determinate rules and principles when developing and applying equitable doctrine;
and they eschew determinate rules and principles when deciding on appropriate equitable
remedies
 However, it [indeterminacy] is commonly thought to be especially pervasive in equity,
largely due to two, related but distinct, phenomena: the commitment of judges to
developing equitable doctrine in terms of the ostensibly vague concept of conscience;
and the well-known fact that the availability of equitable remedies is never a matter of
right
o Indeterminacy in Equity
 We should note that there are large parts of equity in respect of which it is never
seriously suggested that indeterminacy obtains, at least to any non-trivial degree. The
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law relating to the recognition and enforcement of express trusts would appear to be
the clearest example
 Two practices where equity is characterised by indeterminacy
 The use of the ostensibly vague concept of conscience as an organising idea in
developing and applying equitable doctrine
 The award of equitable remedies
 Equity has been informed by the concept of conscience - a concept that is expressed
through the language of "unconscionability". The concept of "conscience" can be
understood in many different way
 Virgo - shows that conscience is used as an organising idea in contemporary equity
in at least two ways
 Liability rules that incorporate a test of subjective knowledge or objective
notice are presented in the language of conscience
 Judges in equity are directed to have regard to the demands of conscience in
a more general sense in deciding cases within a certain class in light of their
particualr facts
 It seems where conscience is deployed in describing liability rules based on tests
of subjective knowledge or objective notice, and also of cases where the
"conscience of the court" is directed according to principles articulated with some
degree of precision
 Even if it is accepted that much use of the concept of conscience as an organising
idea in equity is consistent with considerable doctrinal determinacy, it cannot be
denied that in some areas the use of conscience generates significant
indeterminacy in equitable doctrine
 In these areas, conscience is allowed to operate as a vague concept; judges
are given no specific guidance telling them how to understand the demands
of conscience from one case to the next and, to that extent, are presented
with doctrinal indeterminacy in ascertaining those implications.
 Arguably, judges, by repeatedly evaluating the facts of particular cases within
a certain class in light of the demands of conscience, may over time come to a
clearer understanding of those demands that in turn renders them more
determinate
Discretion in Equity
 In an important paper written in the 1950s but not published until late in 2013, H.L.A.
Hart gives an account of discretion that shows how it might be one way of tolerating
indeterminacy but not the only way
 The proposition that judges in equity—like judges in all types of case—make decisions
by exercising Hartian discretion in circumstances of indeterminacy seems not only
plausible, but compelling, given the way in which judges work
Equity, Discretion, and the Rule of Law
 Instead, we may pursue the suggestion that system-oriented practices entailed in
judicial decision-making affect the exercise of discretion in the sense that such
practices dispose judges to exercise discretion in system-oriented ways.
 Reasoning my analogy is a judicial method that is system-orientated.
 When deployed in the setting of an exercise of discretion, reasoning by analogy
does not aim to make analogies the basis for the application of some determinate
rule or principle to the case at hand; instead, analogies are sought so as to bring
into view, in the setting of the case at hand, patterns of reasoning that were
adopted in the exercise of discretion in past case
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 Still, it might be objected that, no matter how reliable a normative guide
discretionary decision-making in equity might be, that decision-making might be
reliable to a greater degree if equity were made more determinate.
 Surely, the thought goes, if indeterminacy were eliminated from equity
altogether, or at least rendered limited and interstitial across the board,
equity would be in better shape?
 There are reasons to be cautious about that proposition
 It is not obvious that indeterminacy in equity could be eliminated or
reduced significantly without unjust consequences
 At the same time, indeterminacy in equity may promote moral purposes of
other sorts. For example, by formulating doctrine according to the vague
concept of conscience, equity may demand of citizens that they sometimes
work out for themselves what conscience demands as they act and plan.
o Equity, Unconscionable Reliance on Legal Rights and the Rule of Law
 The argument of this part will be that there are reasons to think that insofar as equity
has this function it makes a particular contribution to the rule of law, understood in its
modal conception. That equity has a function of restraining unconscionable reliance on
legal rights is hardly a novel proposition.
 Canonical texts on equity often describe in their opening pages the historical role of
equity in preventing people from relying on their legal rights in unconscionable ways.
And the idea that equity restrains unconscionable reliance on legal rights forms part of
the self-understanding of contemporary equity, as evidenced in the reflections of
equity practitioners and theoreticians on the functions of equity today
Conclusion
o Does equity undermine the rule of law? This article has argued that, from one perspective
at least, there are reasons to think that the answer to that question is no. Equity’s tolerance
of legal indeterminacy, long the subject of rule of law-related anxieties, is often best
described as limited and interstitial
Summary
o Considers whether Equity undermines the rule of law
o Finds that it doesn’t and that it’s tolerance of indeterminacy (which has been argued it the
way it undermines rule of law) is limited
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Martin, ‘Fusion, Fallacy and Confusion’, [1994] Conv 13
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Martin in ‘Fusion, Fallacy and Confusion’ argues that the view that flexibility and capacity for
development is best achieved by disregarding the legal or equitable origins of causes of action,
remedies or defences is misconceived.
She asserts that it does not seem that the fusion fallacy evidenced in cases such as United
Scientific has become established in England; on the contrary there has been a return to
orthodoxy.
o This is apparent from decisions of the House of Lords which contain meticulous analysis of
the separate common law and equitable origins and principles in various areas e.g.
illegality in Tinsley v Milligan, which she argues does not seek to attribute substantive
effect to the Judicature Acts but to facilitate harmonious development of the common law
and equitable rules of illegality.
Martin concludes that while the two systems are working more closely together they are not
yet fused.
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
Topic Two: The Maxims of Equity
The maxims of equity constitute the general principles developed by the Court of Chancery over
the years.
o While they are not to be interpreted as positive rules of law which should always be applied
in their literal sense, they do reflect general trends which can be discerned from the
manner in which the equitable jurisdiction of the courts has been exercised.
o It is important to realise that some of these maxims overlap or may even appear to
contradict each other, and the purpose of examining them now is to provide a better
understanding of the operation of equitable jurisdiction generally
1. Equity Will Not Suffer a Wrong to be Without a Remedy
The reasoning behind this maxim is that equity will intervene to protect a recognised right which
for some reason is not enforceable at common law and it reflects the basis for the origins of the
equitable jurisdiction of the Chancellor.
 Re Diplock [1948]
o It should not be interpreted too literally
o Greene MR - 'if a claim in equity exists it must be shown to have an ancestry founded in
history and in the practice and precedents of the courts administering equity jurisdiction'.
o Always based on established principles, just because something is morally wrong there will
be an equitable intervention
 Holmes v Millage [1893]
o Lindley LJ said that: ‘It is an old mistake to suppose that, because there is no effectual
remedy at law, there must be one in equity’ must also be borne in mind in this context.
 This maxim is particularly with law of trusts and equitable remedies
 Keane, ‘Equity and the Law of Trusts in the Republic of Ireland’
o it’s the application of settled principals that gives equity its virtues of certainty and
consistency. If you abandon precedent completely to meet the demands of justice that will
only lead to greater uncertainty inconsistency this will lead to injustice at a much more
profound level
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2. Equity Follows the Law
This maxim should not be interpreted too strictly and although equity does not seek to question
the existence of legal rights it will attempt to mitigate the often-harsh results caused by their
strict enforcement.
o Equity sometime diverges from the common law but if you want to go back to the beginning
it usually starts from what the common law would say about the situation
 Easy to find examples of how this is not true
 Jones v Kernott [2012]
o Facts
 Two parties that weren’t married but were joint legal owners of the house, where one
contributed more than half of the purchase price. Woman had effectively paid the
mortgage for 20 years, eventually when they ended up in court there was a dispute
whether or not she would only get 50% share of the house or would she get more, based
on her increased interest in it.
o Held:
 Supreme Court said she should get 90% share in equity.
 Equity looked at common intention about the property and decided that it could be
inferred from their conduct that it was not their intention that should be 50/50
owners of the property
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Lord Walker and Baroness Hale in summarising the principles applicable in a case where a
family home is bought in the joint names of a cohabiting couple said that
 ‘[t]he starting point is that equity follows the law and they are joint tenants both in
law and in equity’.
However, that presumption could be displaced by showing that the parties had had a
different common intention at the time when they had acquired the home or that they
had later formed a common intention that their respective shares would change, and the
Supreme Court reversed the decision of the Court of Appeal and restored the order of the
trial judge that the claimant was the beneficial owner of 90% of the property
3. He Who Seeks Equity Must do Equity
 Equity will only grant relief on terms which ensure that a defendant is treated fairly and to
obtain equitable relief, a plaintiff must be prepared to act in an honourable manner.
o It complements the maxim that `he who comes to equity must come with clean hands' and
while the latter principle focuses on the past conduct of the party seeking the intervention
of the court, the maxim ‘he who seeks equity must do equity' is concerned with his likely
future conduct.
o Seen particularly in the context of equitable remedies – if you seek an injunction you have
to undertake the pay the defendant if you are found in court to be wrong
o With this maxim there is a focus on future conduct
 Chappell v Times Newspapers Ltd [1975]
o Facts:
 Plaintiffs applied for a temporary injunction to prevent the employers from terminating
their contract. The employers sought to terminate those contracts due to constant
disruptive behaviour. The employers were willing to keep the contracts if the plaintiffs
undertook an obligation not to act disruptively. The plaintiffs were not willing to
undertake that obligation
o Held:
 Court of Appeal refused to grant the relief sought on the grounds that the plaintiffs had
failed to establish that they intended to act equitably by abiding by the terms of their
contracts of employment.
 As Lord Denning MR said: ‘if one party seeks relief, he must be ready and willing to do
his part in it.’
4. He who Comes to Equity Must Come with Clean Hands
This maxim also reflects the discretionary nature of equity and requires that a person seeking
equitable relief must refrain from fraud, misrepresentation or any other form of dishonest or
disreputable conduct if he wishes to be granted a remedy.
o However, unlike the maxim just considered, it refers principally to the past conduct of the
plaintiff and the inequitable conduct must be connected in some way to the relief which the
plaintiff seeks.
o Arises most frequently in regards equitable remedies
 Overton v Banister (1844)
o Facts:
 Plaintiff frequently misrepresented she was 21 to the trustee and therefore became
entitled to the trust assets. When she was 21 she sued the trustees that she shouldn’t
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have received the trust at that time, and that they failed in their duties as trustees to
allow her access to the trust assets
o Held:
 Claim not allowed – would have made a nonsense of equitable principles
 Although at common law, the plaintiff’s fraudulent misrepresentation was ineffectual
to discharge the trustees of their duty, her claim was disallowed in equity because she
had misrepresented her age.
Smelter Corporation v O'Driscoll [1977]
o Facts:
 Plaintiff sought specific performance of a contract for land. Agent told defendant that
she had no choice to sell or it would be acquired on a depository basis. Court accepted
that it was an honest mistake and decided no remedy should be given.
o Held:
 The Supreme Court concluded that by reason of the plaintiff's misrepresentation, the
defendant was under a fundamental misapprehension as to the true facts and that it
would be unjust to grant specific performance in the circumstances.
 Equitable relief may be refused to a plaintiff where his conduct in relation to the
transaction at issue has been less than honest even where this conduct has not directly
prejudiced the defendant.
Parkes v Parkes [1980]
o Facts:
 Husband bought property and put it in his wife’s name. They ultimately divorced, there
was an argument over who owned the property. Presumption of trust was rebutted by
the presumption of advancement. It was assumed it was his intention to give the
property as a gift to his wife
o Held:
 Costello J stated that ‘the court should not grant relief to a purchaser who has placed
property in his wife’s name dishonestly and by means of an illegal act performed for
the purpose of evading the law relating to the transfer of land.’
Argyll v Argyll [1967]
o Ungoed-Thomas J stated that ‘a person coming to equity must come with clean hands but
the cleanliness required is to be judged in relation to the relief that is sought.'
o Must be sufficient cause or link to the wrong and the remedy being sought
Curust Financial Services Ltd v Loewe-Lack-Werk Otto Loewe GmbH & Co. KG [1994]
o Facts:
 Both parties had been involved in some form of impropriety and where only one party
has been guilty of this, the courts have not taken such a benevolent attitude towards
the wrongdoing.
o Held:
 Finlay CJ accepted that the court has a discretion, where it is satisfied that a person has
come to court otherwise than with ‘clean hands’ to refuse equitable relief in the form
of an injunction on that ground alone.
 However, he stated that ‘It seems to me that this phrase must of necessity involve an
element of turpitude and cannot necessarily be equated with a mere breach of
contract.’
Tinsley v Milligan [1994]
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This more flexible approach to the application of the maxim was also been adopted by the
majority of the Court of Appeal and the House of Lords in this case
o Facts:
 Two women, in a relationship, owned a house, in a relationship. They were both
involved in some element of illegality. Put house in the name of Tinsley in order to get
social benefits through fraud. Parties fell out and issue ended up in court. Tinsley
owned the house in name, but Mulligan paid half the purchase price. Presumption of
trust arose, Tinsley couldn’t rebut that because her reasons were illegal
o Held:
 Lord Browne-Wilkinson took the view that illegality might render a proprietary interest
unenforceable in certain circumstances but only where the claimant had to rely on the
illegality to prove the equitable right and this was not the case in this instance.
 However, note the views expressed by members of the Supreme Court in Patel v Mirza
[2017] to the effect that the approach towards illegality adopted in Tinsley should not
be followed.
Shiel v McKeon [2007]
o Clarke J referred to the principle that ‘he who seeks equity must do equity’ and said that he
must have regard to whether it would be inequitable to allow the plaintiff to benefit from
an arrangement entered into by him in circumstances where he was aware that the
defendant was under a misapprehension as to the plaintiff’s negotiating position. He
concluded that the plaintiff could not invoke equitable principles in the circumstances.
Halliwell has suggested [2004] that
o ‘the application of the unclean hands principle and the concept of illegality are producing
some very questionable outcomes with respect to equitable property rights and to
discretionary remedies.’
o
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5. Delay Defeats Equity
Whereas a legal claim will usually be governed by a period of limitation laid down by statute, the
type of delay which will be sufficient to defeat a claim for equitable relief is less clear cut. There
are two main concepts:
o Laches - where a party whose rights have been infringed has failed to pursue his remedy
with sufficient speed in the eyes of equity his inactivity may cause the right of action to be
barred where it is combined with prejudice to the other side.
o Acquiescence - where one party infringes another's rights and the other does nothing or
expressly or impliedly represents that he does not intend to enforce the claim - equity
infers that he has acquiesced in the other's actions and he may lose his right of action.
 Toal v Duignan (No.2) [1991]
o Finlay CJ said that the courts have an inherent jurisdiction to dismiss a claim in the
interests of justice where the length of time which has elapsed between the events out of
which it arises and the time when it comes for hearing is in all the circumstances so great
that it would be unjust to call upon a particular defendant to defend himself and that to
conclude otherwise would be to give the Oireachtas a supremacy over the courts which is
inconsistent with the Constitution.
 Allcard v Skinner (1887)
o Lindley LJ stated it was a case which by no means rested on mere lapse of time and the
plaintiff's conduct amounted in effect to confirmation of the gift.
 J.H. v W.J.H (1979)
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Keane J referred to the delay by the plaintiff for a period of four years in seeking to assert
her claim and the time and money invested in the running of the farm by the defendant
on the basis that she had abandoned her rights and concluded that the lapse of time
coupled with circumstances which made it inequitable to enforce the claim was sufficient
to bar the plaintiff's action.
McGrath v Stewart [2008].
o Facts:
 In the circumstances and given the large rise in the value of the properties since the
contract had been concluded, he was satisfied that the defence of laches had been
made out and that to make an order of specific performance against the defendant
would be inequitable.
o Held:
 However, it should be noted that on appeal [2016] 2 IR 704 Laffoy J concluded that the
trial judge did not have jurisdiction to award damages in lieu of specific performance
and the Supreme Court allowed the defendant’s appeal. She stated that the court had
jurisdiction to award damages in lieu of specific performance, but that where it had
determined that laches on the part of the plaintiff purchaser should operate as a bar to
entitlement to an order for specific performance, it could not award damages in lieu of
specific performance.
o
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6. Equality is Equity
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In circumstances where more than one person is entitled to property, equity favours a principle
of equal division. The most common illustration of the maxim in practice is equity’s dislike of
joint tenancy as a method of holding property.
o Equity tends to lean in favour of a tenancy in common and in certain circumstances even
where persons are joint tenants at law they may be regarded by equity as tenants in
common of the beneficial interest.
E.B. v S.S. [1998]
o Keane J commented that the maxim that 'equality is equity' should not necessarily apply
where an application is brought under s.117 of the Succession Act 1965 by a child claiming
that a parent has failed in his moral duty to make proper provision for the child in
accordance with his means – although here equal distribution was the fair solution.
7. Equity Looks to the Intent Rather than the Form
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While this maxim does not mean that legal formalities will not be required by equity, it looks to
the substance rather than the form of a transaction and does not require ‘unnecessary
formalities' to be observed.
o So, e.g., if by insisting on statutory formalities, fraud is likely equity will not insist on a note
or memo in writing in relation to a contract for the sale of land. However, it could be said
to conflict with the maxim that equity follows the law to some degree.
Parkin v Thororld (1852)
o Lord Romilly MR stated that ‘Courts of Equity make a distinction in all cases between that
which is matter of substance and that which is matter of form; and if it find that by
insisting on the form, the substance will be defeated, it holds it to be inequitable to allow
a person to insist on such form, and thereby defeat the substance.’
8. Equity Looks on that Done Which Ought to have Been Done
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Where a specifically enforceable obligation exists, equity regards the parties as already in the
position which they would be in had the obligation been performed and their legal rights and
duties are assessed by reference to this position.
Once a specifically enforceable contract for the sale of land is entered into, the equitable
interest passes to the purchaser and the legal title is held for him on trust by the vendor until
completion. See s.52(1) of the Land and Conveyancing Law Reform Act 2009 which was also the
minority view of Henchy J in Tempany v Hynes [1976] (The view of the majority - at 114 per
Kenny J - was that the equitable interest only passed to the extent to which the purchase price
was paid).
9. Equity Imputes an Intention in order to Fulfil an Obligation
Where a person is under an obligation to perform an act and does some other act which could
be regarded as fulfilment of that original obligation, it will be regarded as such. This maxim
forms the basis for the equitable doctrines of satisfaction (e.g. the satisfaction of a debt by a
legacy) and performance.
10. Equity Acts in Personam
This was originally one of the most fundamental equitable maxims that equitable jurisdiction
was exercised against the person of the defendant rather than against his property. The personal
nature of this jurisdiction is illustrated by the fact that failure to comply with an order e.g.
specific performance or an injunction constitutes contempt of court and is punishable by
imprisonment.
 While equitable relief may often be of a personal nature, equitable proprietary rights are also
increasingly being granted and this maxim must be treated with a degree of caution.
 FHR European Ventures LLP v Cedar Capital Partners LLC [2015]
o Lord Neuberger commented that ‘it is fair to say that the concept of equitable proprietary
rights is in some respects somewhat paradoxical. Equity, unlike the common law, classically
acts in personam; yet equity is far readier to accord proprietary claims than common law.’

11. /12. Where the equities are equal, the first in time prevails/ Where the equities are equal, the
law prevails
 These two related maxims refer to the question of priorities as between competing interests in
land. However, they cannot be looked at in isolation and it is necessary to examine the
distinction between equitable interests and mere equities, the effect of the doctrine of notice on
the operation of the maxims and the impact which registration has had on the question of
priorities
 Equitable interests are regarded as actual rights in property and include interests under trusts,
equitable mortgages, equities of redemption, restrictive covenants and contracts to convey or
create a legal estate in land. Mere equities are rights usually of a procedural nature which are
ancillary to a property right and include e.g. the right to have a transaction set aside for fraud or
undue influence or a right to have a document rectified for mistake.
o The most practical significance of this distinction can be seen in relation to priorities. While
a bona fide purchaser of a legal estate for value and without notice of an earlier equitable
interest may take the property free of that interest, a bona fide purchaser of an equitable
interest without notice of an earlier equitable interest will take subject to it on the basis of
the maxim that where the equities are equal the first in time prevails. However, while such
a purchaser does not take free of prior equitable interests, he will take free of any prior
mere equities on the basis that the ‘equities’ are not equal.
 There has been some dispute about the status of a beneficiary's equitable right to trace trust
property into the hands of third parties and specifically as to whether it can be categorised as an
equitable interest or as a mere equity.
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The position in England would appear to be that it is recognised as an equitable interest
(see Cave v Cave (1880)
o However, the opposite conclusion was reached by the Irish Court of Appeal in Re French’s
Estate (1887) which also concerned a contest as between the right of beneficiaries to trace
and that of an equitable mortgagee.
 While this approach to the status of a beneficiary's right to trace appears to be
established in Ireland, Wylie has questioned its soundness on the basis that it seems to
involve an ‘unjustifiable limitation' of the beneficiaries' interests.
 These maxims should not be interpreted too literally. As Lord Neuberger PSC noted in FHR
European Ventures LLP v Cedar Capital Partners LLC [2015]
o ‘given that equity is far more ready to recognise proprietary rights than common law, the
effect of having an equitable right is often to give priority over common law claims sometimes even those which may have preceded the equitable right.’
 Pettit [1990]
o The maxim seems to be a last resort defence where no other defences are available but
where it would be unconscionable for the plaintiff to have a remedy
 Halliwell [2004] Conv 439
o The unclean hands doctrine is no longer a suitable subject for weaker examination
candidates
o Based on improper conduct causing a plaintiff to be denied discretionary relief but not
illegal conduct
2.1 Academic Commentary
Pettit, 'He Who Comes into Equity Must Come with Clean Hands', [1990] Conv 416
 Balancing the Equities
o Is the doctrine of 'clean hands' necessary? Has it declined in recent years?
o Clean hands doctrine considered in judgement of Young J in Fai Insurances Ltd. V Pioneer
Concrete Services Ltd
 In his judgement Young J discussed the balancing of equities - where there competing
equities the primary rules are encapsulated in the maxim '“qui prior est tempore potior
est jure' (he who is earlier in time is stronger in law)
 Clean Hands – Introduction
o Young J considered different views of the doctrine
 The extreme view that the application of the maxim is limitless
 The more moderate view that the clean hands doctrine does not definitely govern
anything, it's not very helpful as a principle and can cause harm
 Qualification to Maxim
o Eyre C.B in Dering v Earl of Winchester said that the maxim “does not mean a general
depravity; it must have an immediate and necessary relation to the equity sued for; it must
be a depravity in a legal as well as in a moral sense."
o Young J cited Argyll v Argyll to support this qualification
 Status of the Maxim
o The maxim has been open to criticism, some saying that it is used more often in textbooks
than in judgments
o However, recent cases have continued to endorse the maxim
o Textbook writers tend to lean towards the extreme view of the maxim
 Conclusions
o The maxim seems to be a last resort defence where no other defences are available but
where it would be unconscionable for the plaintiff to have a remedy
o
Halliwell, 'Equitable Property Rights, Discretionary Remedies and Unclean Hands', [2004] Conv 439
 Introduction
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If someone's conduct is improper, but not illegal, the person will be denied discretionary
relief from the courts. However, if someone's conduct is illegal an equitable property right
asserted on their behalf will be upheld unless the presumption of advancement applies
o The Law Commission concluded that the unclean hands maxim should have no role to play
in relation to the effect of illegality on a trust
Property Rights and Unclean Hands Prior to Tinsley v Milligan
o It was recognised that the determination of property rights under the unclean hands
doctrine might be subject to a locus poenitentiae (opportunity to withdraw from a contract
or obligation before it is completed or to decide not to commit an intended crime)
 That position has survived the decision in Tinsley v Milligan
o The suggestion from Tinsley v Milligan that the presumption of advancement was
determinative in earlier case law is wholly unfounded
 First in earlier case law the conduct in question was considered illegal and not merely
reprehensible in an unclean hands sense
 Secondly, the participation of the other party was said to be irrelevant
 Thirdly, in Tinker v Tinker the husband was acting illegally but honestly on the advice of
a solicitor
 There was no consideration of the locus poenitentiae point in Tinker v Tinker
The Legacy of Tinsley v Milligan
o Judicial response to the decision in Tinsley v Milligan has been far from enthusiastic
 Largely based on the importance attached to the presumption of advancement
Conclusions
o The unclean hands doctrine is no longer a suitable subject for weaker examination
candidates
o



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Topic Three: Trusts
3.1 Definition of a Trust
General Principles
 The Origins of the Trust Concept
o The modern trust developed out of the medieval concept of the use whereby the owner of
land would give it to another to hold on his behalf
o The system of the use was adopted for a number of reasons
 Perhaps the most significant was that it facilitated the avoidance of certain feudal dues
and tax
 It also enabled property to be effectively to bodies corporate, usually religious
institutions
 Another advantage was being able to grant lands to the use of another to defeat claims
of a creditor or to delay actions for the recovery of land
o Uses became unpopular with feudal lords and as a result the Statute of Uses was passed in
England in 1535 and the equivalent legislation in Ireland in 1634
 The statute provided that where any person or persons were seized of any lands or
other hereditaments to use, confidence or trust of any person(s) or of any corporation,
the or corporation having such use, confidence or trust in fee simple, fee tail, for term
of life or for years, or otherwise, should be deemed in lawful seisin and possession of
the lands or hereditaments for the same estate as he or they had in the use,
confidence or trust
o Definition of a Trust
 Definition on Underhill and Hayton's, The Law Relating to Trusts and Trustees
 "[A]n equitable obligation, binding a person (called a trustee) to deal with
property (called trust property) owned by him as a separate fund, distinct from his
own private property, for the benefit of persons (called beneficiaries or, in old
cases cestuis que trust), of whom he may himself be one, and any of whom may
enforce the obligation"
 This definition is insufficient to cover trusts for various purposes other than for the
benefit of persons
 Perhaps the most comprehensive definition is that suggested by Keaton and Sheridan
in The Law of Trusts
 "A trust if the relationship which arises wherever a person (called the trustee) is
compelled in equity to hold property, whether real or personal, and whether by
legal or equitable title, for the benefit of some persons (of whom he may be one
and who are termed beneficiaries) or for some object permitted by law, in such a
way that the real benefit accrues, not to the trustee, but to the beneficiaries or
other objects of the trust"
Trusts Distinguished from Other Forms of Legal institution
 Trusts and Bailment
o Pettit suggests the following definition of bailment:
 "[D]elivery of personal chattels upon a condition, express or implied, that they shall be
redelivered to the bailor, or according to his directions, when the purpose of the
bailment has been carried out"
o There are certain similarities between the position of a trustee and bailee in that both are
subject to fiduciary functions, albeit of varying degrees, in relation to the property which is
within their control
o There are number of basic distinctions between concepts of a trust and a bailment
 Bailment is a creature of common law while trusts are equitable in nature and their
enforcement is based on equitable not common law principles
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



Bailment applies only to personal property while a trust can apply to any kind of
property
 While a bailor can enforce or vary the bailment, a settlor cannot carry out the same
function in relation to a trust unless he has specifically reserved such a power for
himself when setting it up
 A bailee merely has special property in the goods which constitute the subject-matter
of the bailment and generally cannot pass good title to the property which will be valid
against the bailor. On the other hand, a trustee can give good title in these
circumstances to a person who acquires the legal ownership bona fide for value
without notice of the trust
Trusts and Agency
o There are some similarities between the relationship of principal and agent and that of
trustee and beneficiary to the extent that both the agent and the trustee have fiduciary
obligations and must act in the interests of their principal or beneficiaries
o While the agency relationship is governed mainly by common law principles, equity will
intervene in certain circumstances
o However, there are a number of significant ways in which the relationships can be
distinguished
 The agency relationship is personal in nature, whereas the trust is proprietary
 There must be some form of agreement between an agent and his principal which
forms the basis of their relationship, whereas this will hardly ever be either necessary
or desirable between a trustee and the beneficiaries of a trust
 The agency arrangement is normally terminated by the death of either the principal or
the agent; this is not the case in relation to a trust
 A trustee cannot commit the beneficiaries of a trust to liabilities toward third parties
whereas an agent can commit his principal
 An agent is bound to carry out his principal's instructions, yet a trustee is not subject to
such control with either by the settlor or the beneficiaries
 While an agency may have his principal's property in his possession, he will usually not
have title to it
Trusts and Contract
o From one perspective trusts and contracts seems to have little in common: one is a creation
of the common law, an arrangement which requires valuable consideration for its validity
and which only one party can enforce, the other is an equitable creation which can be
perfectly valid without any consideration and which can be enforced by a beneficiary who is
not party to the originally agreement
o In practice it is often difficulty to draw distinction between these concepts and the same
transaction may even give rise to both a contract and trust
o The most far-reaching consequence of the distinction is that beneficiaries can enforce a
trust even though not party to its creation whereas only the actual parties to a contract can
enforce it
Trusts and Powers
o Whether an instrument is a trust, or a power is a question of the intention of the settlor
ascertained from the construction of the language of the instrument
o There is a fundamental distinction between trusts and powers; while trusts are of an
imperative nature, powers are discretionary.
 A trustee must carry out his functions according to the terms of a trust whereas the
donee of a power has considerable discretion as to the manner in which he exercises
his power, if he exercises it at all
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The most relevant power, is the power of appointment: authorises the creation or grant of
beneficial interests in property and which gives authority to the donee to nominate objects
of the power who will generally be chosen from a defined class
o While distinctions are clear in theory they are confused by the facts that a trust may confer
a measure of discretion to a trustee.
o There is also a concept known as a power in the nature of a trust or a 'trust power' - this
essentially denotes the situation which arises where a court infers the existence of a trust in
default of appointment being made by the donee of a power
o Burrough v Philcox (1840)
 Facts:
 Someone was given the power of appointment from a class, but they die in the
mean-time before they decide. Do the people in that class have any right to do
anything. If children of testators were to die before having children, the remaining
child would have a trust power to divide the estate between nephews and nieces.
The other child died before doing so.
 Held
 Court thought it would be better to divide the assets equally then to allow the
trust to fail
 Lord Cottemham stated: ‘When there appears a general intention in favour of a
class, and a particular intention in favour of individuals of a class to be selected by
another person, and the particular intention fails, from that selection not being
made, the court will carry into effect the general intention in favour of the class.’
o Re Kieran [1916]
 Facts:
 Trust powers where the trust power given that wasn’t exercised. Testator gave
property to brother and left it on trust to eldest son of the brother, if the child was
to die before he was 21 the brother would be given power of appointment.
Brother subsequently died before doing anything, he tried to give the property to
his daughter. Brothers brought the matter of court because the power of
appointment had not been exercised. Three brothers shared the property equally
 Held:
 Pim J stated, ‘it is the recognized duty of every court to carry out a trust if it is
possible to do so, and if it is possible, a court will avoid a construction which must
result in an intestacy and in the carrying of the property, possibly wholly, probably
largely, to persons whom the testator never meant to get it.'
Trusts and the Administration of a Deceased's Estate
o While the roles of a personal representative and a trustee are often confused in practice
they are quite distinct
 The task of the personal representative could be said to be limited to realising and
distributing assets and the trustee's function is ordinarily of considerably more lasting
duration in terms of administering the trust on an ongoing basis
 While trustees only have joint authority to deal with or dispose of personal property,
personal representatives have joint and several authorities to do so and the lawful
actions of one will be binding on all
 A personal representative holds his office for life except where the grant of probate or
letters of administration is for a limited period or the court releases him from such
duties whereas there will be at least two trustees remaining to administer the trust, a
trustee may be deed declare that he wishes to retire and if the consent of his cotrustees forthcoming, he will be permitted to do so
o Similarities
o

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
Both trustees and personal representatives are subject to fiduciary obligations in the
performance of their functions and often the same individual will fulfil both roles at
different stages
Classification of Trusts
 Public and Private Trusts
o This classification is based on the reason for the creation of a trust
 Private trusts are created for the benefit of an individual or a class of individuals
irrespective of the benefit they may confer on the public at large
 Public trusts, otherwise known as charitable trusts, are set up for the purposes
beneficial to the community in general, although in most cases they will incidentally
confer a benefit to a specific person or class
 Express Trust
o An express trust is one created by express declaration of the settlor or testator either by
instrument inter vivos or by will
o Certain formalities must be observed in the creation of express trusts, known as the three
certainties
 Resulting Trusts
o Is one which arises from the unexpressed but presumed intention of the settlor or testator
o They are known as resulting trusts because the beneficial interest in the trust reverts or
'results' to the settlor who transferred the property to the trustee in the first place
o Due to the informal manner in which they come into being, resulting trusts are exempt
from the formalities required in relation to the creation of express trusts
 Constructive Trust
o Is a form of trust which arises by operation of law and which comes into being irrespective
of the intentions of the parties concerned
o The main distinction between resulting and constructive trusts is that the courts presume
that resulting trusts were intended by the parties whereas constructive trusts are imposed
to satisfy the demands of justice and may often be imposed contrary to the intentions of
the individuals concerned
 Simple and Special Trusts
o This classification distinguishes between different types of trust according to the nature of
the duties which are imposed on the trustees in each case
 A simple trust is one in which property is vested in the trustee, but the trustee is given
no active duties to preform and merely holds the legal title to the trust property
 A special trust is one in which a trustee is required to carry out duties imposed on him
by the settlor or testator which necessitates him taking an active as opposed to a
passive role in administrating the affairs of the trust
 Fixed and Discretionary Trusts
o In a fixed trust each beneficiary has a fixed current entitlement to a specific share or
interest in the trust property
o In discretionary trusts, a beneficiary has no actual entitlement to any part of the trust
property; instead the trustees are given discretion to apply the property to the benefit of a
specified person in a class of persons
 Protective Trusts
o The essence of such a trust is that the interest of a beneficiary is made determinable on the
happening of certain events, usually bankruptcy. This determinable trust is then followed by
the establishment of a discretionary trust, usually in favour of the beneficiary and members
of his family or some other class of persons
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3.2 Express Trusts
3.2.1. Formalities
 Creation of Trusts Inter Vivos
o Primarily to prevent fraud, legislation has intervened to provide that in specific cases certain
formalities must be observed in the creation of express trusts
 However, no formalities are required for the creation of an inter vivos express trust of
personalty and provided that the settlor manifests the intention of creating such a trust
it may be established orally
 In relation to the creation of express trusts of land, whether freehold or leasehold it is
required that the trust must be evidenced in writing and signed by a person able to
declare the trust, or by his will
 Statute Not to be Used as an Instrument of Fraud
o Notwithstanding the statutory requirements, the courts will not always insist on strict
compliance with the provisions in the Statute of Frauds
 The principle has been established that equity will not permit the statute to be used as
an instrument of fraud
 McCormick v Grogan [1869]
 Lord Westbury - "The Court of Equity has, from a very early period, decided
that even an Act of Parliament shall not be used as an instrument of fraud"
 So, the court will not permit a beneficiary to be deprived of an interest in land
under a trust in absence of written evidence of the trust if such a result would
amount to a fraud providing that there is some other evidence to establish
the existence and nature of the trust
 The most frequently cited example of the operation of this doctrine is the decision of
the CoA in Rochefoucauld v Boustead [1897]
 Facts:
 The plaintiff was the owner of mortgaged property which was sold by the
mortgagee to the defendant. The defendant had orally agreed to hold the
property on trust for the plaintiff subject to repayment to the defendant for
the purchase price and other expenses incurred in the transaction. The
defendant subsequently sold the land and the plaintiff, who claimed the land
had been conveyed to the defendant as a trustee for her, was held to be
entitled to obtain an order for an account
 Held:
 Lindley LJ stated: ‘It is a fraud on the part of a person to whom land is
conveyed as a trustee, and who knows it was so conveyed, to deny the trust
and claim the land for himself. Consequently, notwithstanding the statute, it
is competent for a person claiming land conveyed to another to prove by
parole evidence that it was so conveyed upon trust for the claimant, and that
the grantee, knowing the facts, is denying the trust and relying upon the form
of conveyance and the statute, in order to keep the land himself.’
 The principle was applied in Ireland in McGillycuddy v Joy [1959]
 Facts:
 The plaintiff and the defendants agreed to purchase a farm jointly and he
contract was signed by one of the defendants. The plaintiff paid 1/3 of the
purchase price and the defendants then reneged on the agreement. The
plaintiff sought a declaration that the defendant, who signed the contract,
held the benefit of the contract in trust for him.
 Held
 Budd J held that the principle in Rochefoucauld applied even though there
was only a contract for sale, as opposed to conveyance
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
Where a trust is created by will, the testator must comply with the statutory
requirements laid down by s.78 of the Succession Act 1965 in relation to the making of
statutory dispositions.
 However, as with trusts created inter vivos, equity will not always strictly enforce
the statutory formalities required where the statute is being used as an
instrument of fraud and it was in obedience to this principle that so called ‘secret
trusts' (considered below) came to be recognised.
3.2.2. Essential Elements
 Essential Elements of a Trust
o Apart from ensuring compliance with the formalities outlined above, no technical language
is necessary to create a valid express trust, however, certain elements (known as the three
certainties) must be present if such a trust is to be created
o The three certainties are:
 Certainty of intention
 Certainty of subject-matter
 Certainty of objects
o These requirements were laid down in Chambers v Fahy [1931]
 [I]t has been established that, in order that a trust may be created, the subject matter
must be certain, the objects of the trust must be certain, and the words relied on as
creating the trust must have been used in an imperative sense so as to show the
testator intends to create an obligation

Certainty of Intention or Words
o The requirements that the words used to create a trust be imperative does not mean any
precise form of wording must be used, a trust can validly be created with using the word
'trust', and the use of the word 'trust' does not conclusively indicate the existence of a trust
o The words must be examined with a view to ascertaining whether the intention was to
make an absolute gift to the donee, or whether the intention was that the donee would
hold the property on trust
 The question of construction arises most frequently in relation to wills and historically
the courts readily inferred the existence of a trust where the words used were hardly
of an imperative nature, for example where a gift was made by a testator who
expressed the hope, wish, expectation or desire that the donee would deal with the
property in a particualr manner
 However, more recently the use of these precatory words has usually been
interpreted as being insufficient to create a trust
o Re Hamilton [1895]
 Be careful with precatory words.
 Facts:
 A testator gave legacies to her two nieces, she said she wished the nieces would
divide what was left to two families. The court said no trust was created – it was
an absolute gift
 Held:
 Lopes LJ stated ‘it seems perfectly clear that the current of decisions with regard
to precatory trusts is now changed and that the result of the change is this, that
the court will not allow a precatory trust to be raised unless on a consideration of
all the words employed it comes to the conclusion that it was the intention of the
testator to create a trust.’
o Re Humphrey's Estate [1961]
 Facts
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o
o
o

 A testator devised and bequeathed all his property, real and personal, to his wife
and added that he wished that she would leave by will or transfer during her
lifetime a house and demesne to his son and that the remainder of his property
should be left or transferred to his daughters.
 Held:
 Ross J held that in the circumstances, the wife took absolute interest
Re Sweeny [1976-77]
 Facts:
 The testator devised and bequeathed all his assets to his wife for her own
absolute use and benefit 'subject to the express wish' that she makes provision for
the payment of certain legacies after her death
 The question arose whether the words of the gift to the wife of all the testator’s assets
could be cut down by the subsequent words
 Held:
 Hamilton J commented that while they were capable of being imperative if he
were to hold so he would be cutting down considerably the clear words of the gift.
He quoted and approved Re Humphrey's Estate. He concluded that it was the
testator's intention that his wife should enjoy the assets for her own absolute
benefit and the words were not intended to create any trust
Despite the general trend illustrated by these decisions, precatory words may be sufficient
to create a trust if it is clear from the language used in the will as a whole that this was the
testator's intention.
Comiskey v Bowring -Hanbury [1905]
 Facts:
 A testator devised and bequeathed all of his real and personal property to his wife
absolutely 'in full confidence' that she would make such use of it as he would have
made himself and that at her death she would devise it to one or more of the
testator's nieces as she might think fit.
 Held:
 The majority of the House of Lords held that on the true construction of the will
there was an absolute gift of the testator's estate subject to an executory gift of
the same at her death, either in accordance with the shares provided for in the
wife's will or otherwise equally.
Certainty of Subject-Matter
o To ensure the creation of a valid express trust, the subject-matter of the trust must be
defined with sufficient certainty
o As Arden LJ stated in Lenham Brothers International (Europe) v CRC Credit Fund Ltd. "[w]here there is no property which is sufficiently identified to form the subject-matter of a
trust, no trust is created"
o While a testator may leave his residuary estate on trust, where a phrase such as 'the bulk of
my…residuary estate' is used no trust shall be created
o Where an objective criterion which can be applied by the court is provided by the testator a
failure to quantify precisely the extent of the subject-matter will not prove fatal to its
validity
o In Re Golay's Will Trusts [1965]
 Ungoed-Thomas J upheld the validity of a gift directing the testator's executives to
allow a beneficiary to use a flat during her lifetime and to receive a 'reasonable income'
from his other properties'
 The question which the courts had to consider was 'whether the testator by the words
'reasonable income' given sufficient indication to provide an effective determinant of
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o
o

what he intends so that the court in applying that determinant can give effect to his
intentions'
 Ungoed-Thomas J concluded that the yardstick indicated by the testator was what has
been objectively identified as a 'reasonable income' and as the court was constantly
involved in making such objective assessments, the direction in the will, in his view,
could not be defeated on the grounds of uncertainty
Where the assets are of an intangible nature, the courts in England have accepted that a
trust may arise in these circumstances
Hunter v Moss [1993]
 It was confirmed that the requirements of certainty of subject-matter in relation to a
trust of intangible assets is not based on any immutable principle which demands
segregation or appropriation of the specific property which is to form this subject
matter
 The trust was compromised of shares in a company which were of their nature
indistinguishable from other shares in the same company - they were all equally
capable of satisfying the trust and it was unnecessary to identify any particular shares
before determining that the subject-matter requirement was satisfied
 Hayton (1994) is particularly critical of the reasoning employed by Dillon LJ and
suggests that the latter's judgement 'should not be regarded as the last word on the
subject.' He suggests that Hunter should not be followed and that there is no sound
reasoning for distinguishing trusts of goods and trusts of intangibles
 Martin [1996] submits that the solution achieved in Hunter is 'fair, sensible and
workable' and welcomes the decision as an example of the court's policy of preventing
a clearly intended trust from failing for uncertainty
Certainty of Objects
o The general principle that 'in order to be valid, a trust must be one which the court can
control and execute' has led to the development of a considerable body of case law and
academic criticism in relation to the objects of a trust
 The rule is that objects or beneficiaries of a trust must be defined with a sufficient
degree of certainty to enable trustees to administer the trust according to the
testator's intentions
o Test for Fixed Trusts
 Under the terms of a fixed trust, the interest which each beneficiary is to take is
specified in the trust instrument and the trustees have no discretion to determine who
will benefit or the extent of that individuals share
 Clearly where property is to be held on trust to be divided amongst the members of a
class, this task cannot be carried out unless it is possible to draw up a complete list of
the members of that class
o Test for Mere Powers
 The donee of a power of appointment is under no duty to exercise it in a particualr
manner, if indeed he exercises it at all
 Such a donee can only make a distribution amongst the classes of individuals
specified by the settlor and the validity of the special powers of appointment
relies on the objects of the power being defined with sufficient certainty
 Re Gulbenkian Settlements [1970]
 Lord Upjohn - "A mere or bare power of appointment among a class is valid if you
can with certainty say whether any given individual is or is not a member of the
class; you do not have to be able to ascertain every member of the class."
 A settlement contained a power of appointment in favour of an individual 'any
wife and his children or remoter issue…and any person or persons in whose house
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or apartments or in whose company or under whose care and control or by or
with whom [he] may from time to time be employed or residing"
 The validity of this power was unanimously upheld by the House of Lords
Test for Discretionary Trusts
 In the case of a discretionary trust, trustees are under an obligation to distribute the
trust property to the beneficiaries, although they have a discretion to select which
members of the class should benefit and to what extent
 The test originally applied in IRC v Broadway Cottages Trust [1955]
 Jenkins LJ formulated the test that 'a trust for such members of a given class of
objects as the trustees shall select is void for uncertainty unless the whole range
of objects eligible for selection is ascertained or capable for ascertainment
 The rationale being such an approach was two-fold
 First, that a trustee's duty to distribute could only properly be carried out if
he had before him a comprehensive list of beneficiaries
 Second, that if the court was required to make a distribution where the
trustees failed to act, it could only do so on the basis of equal division and
this would not be possible without a complete list of beneficiaries
 This test was reformulated in McPhail v Doulton [1971]
 A deed executed by the settlor provided that a fund was to be held on certain
trusts for the benefit of the staff of a company and their 'relatives and
dependants'
 The House of Lords held that the deed created a trust rather than a power and
Lord Wilberforce concluded that the test for discretionary trusts 'ought to be
similar to that accepted in Re Gulbenkian's Settlements for powers, namely, that
the trust is valid if it can be said with certainty that any given individual is or is not
a member of the class
 Re Parker [1966]
 The testator's will provided that certain income from a trust was to be divided
amongst his 'necessitous nieces and nephews' and their children in such manner
as his executors might think fit
 Budd J, in holding that the trust was void not for uncertainty, stated that where
trustees have a duty to distribute income under a trust it is essential that they
know before performing this duty who the beneficiaries are
 "‘[A]n imperative trust for the division of income between such members of the
class as the trustees may select is invalid unless the whole class of potential
beneficiaries can be ascertained."
 This view was approved in O'Byrne v Davoren [1994]
 The testatrix's will provided that the residue of her estate should be held on trust
for the post-primary education of such members of a class consisting of the
children, grandchildren and direct descendants of named persons whom the
trustees in their discretion should decide would be most likely to benefit
therefrom
 Murphy J was satisfied that the gist was sufficiently certain but held it was void
because it infringed the rule against perpetuities and the rule against perpetual
trusts
 It can be argued that from a global perspective the McPhail approach is much more
likely to lead to at least partial fulfilment of a testator's intentions in these
circumstances, for the alternative is that the trust will fail for uncertainty
 It can also be said that the approach adopted in this jurisdiction, provided an
effort is made to give effect to a testator's intentions in as liberal a manner as
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possible, is more likely to lead to a division in the trust property or income in
equal shares amongst all beneficiaries
Conceptual and Evidential Certainty
 Irrespective of the nature of the trust or power involved, the description used to define
the class of potential beneficiaries must be conceptually certain
 So, as a general rule, whether one is dealing with a fixed or discretionary trust, the
class must be defined with sufficient conceptual certainty to enable the trustees, if
necessary the court, to determine theoretically whether any given individual is or
is not a member of that class
Administrative Unworkability and Capriciousness
 Even where a class is defined with sufficient conceptual certainty a trust may still fail
for uncertainty 'where the definition of the beneficiaries is so hopelessly wide as not to
form "anything like a class" so that the trust is administratively unworkable' - McPhail v
Doulton
 R. v District Auditor ex p West Yorkshire Metropolitan County Council [1986]
 A discretionary trust in favour of 'any or all or some of the inhabitants of the
County of West Yorkshire' was found to be invalid on the grounds that the
definition of beneficiaries as the class was to wide
 Re Manisty's Settlement Trusts [1974]
 Templeman J said that "a power cannot be uncertain merely because it is wide in
ambit" found favour with Megarry VC in Re Hay's Settlement Trusts [1982], where
the latter concluded that he did not see how mere numbers could inhibit the
donees of a power from considering whether or not to exercise it
3.2.3. Academic Commentary
Martin, ‘Certainty of Subject Matter: A Defence of Hunter v Moss’, [1996] Conv 223
 Chattels
o Where purchasers have paid for goods but have not taken delivery prior to the seller's
insolvency, they may seek to gain priority over general creditors by claiming a trust of the
goods in their favour.
 Where the goods have not been segregated but form part of a bulk, these claims failed
(prior to a legislative reform mentioned below) on the ground that there cannot be a
trust of unidentified chattels
o The leading authority on chattels is Re Goldcorp Exchange Ltd, where purchasers of gold
bullion, who had paid but had not taken delivery, asserted proprietary rights on the
insolvency of the company.
 Save for a group of customers whose bullion had been segregated, these claims were
rejected by the Privy Council. Legal title had not passed, nor was there any trust, as there
was no identifiable property to which any trust could attach. Thus, the customers were
unsecured creditors.
o Now, however, the Sale of Goods (Amendment) Act 1995 provides that purchasers who
have paid for unascertained goods forming part of an identified bulk (where the goods are
interchangeable) acquire property rights as tenants in common of the bulk, subject to any
contrary agreement
 Choses in Action
o In Hunter v Moss an argument for tenancy in common interest in the whole was rejected
and it was held that they were the equitable owner
 Critics of Hunter v. Moss obviously do not claim that there is any difference between one
pound and another pound or one ordinary share in M Co. and another. Rather, they
point to the difficulties which could arise on subsequent dealings with the shareholding
or bank account of which an unsegregated part is subject to a trust.
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 Before any such dealings, an adult beneficiary could call for a transfer of the money
or shares. But what would happen if, after declaring a trust of 50 out of 950 shares,
the settlor then sold 50 shares and invested the proceeds (disastrously or
profitably)? Whose 50 shares were they? There seems no reason why the tracing
rules relating to mixed assets should not apply
 Tracing will not work, on the other hand, in a case like MacJordan because there is
no identifiable mixed fund
Conclusion
o It is submitted that the Hunter v moss solution is fair, sensible and workable
 Unlike the other cases, it did not involve a claim by unsecured creditors to gain priority
on insolvency
 To uphold a declaration of trust of part of a shareholding or bank balance would not
prejudice creditors, as such a trust could be set aside in the same way as a trust of the
whole shareholding or bank balance on the settlor's insolvency.
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3.3 Secret Trusts
Introduction
 Equity will not always insist on strict compliance with the statutory formalities required when
this would result in a statute being used as an instrument of fraud.
 The statutory formalities which must normally be complied with to create a valid trust which is
to take effect after a testator's death may in some circumstances be waived to give way for what
is known as a secret trust
o A fully secret trust usually arises where a testator makes a gist of property to a named
person in his will, without expressly stating that the latter is to gold it on trust, but during
his lifetime he informs the legatee that he wishes him to hold the property for a third party
or for a particualr purpose
o A half secret trust is said to exist where it is clear from the will that the legatee is to hold the
property on trust but neither the terms of the trust nor the identity of the beneficiaries is
disclosed in the will.
3.3.1. Fully Secret Trusts
 Historically, the dilemma faced by the courts in deciding whether to enforce a fully secret trust
was the question if it should be permissible for a testator to disregard or bypass statutory
formalities laid down or should a legatee be permitted to take a gift beneficially when it was
clear intended by a testator to be held on trust?
o The conclusion was that equity should intervene to prevent the perpetration of fraud and
the practice of giving secret trusts was developed to create a valid fully secret trust, the
testator must intend to create a trust and its terms must be communicated to the legatee
and accepted by him during the testator's lifetime
 Ottaway v Norman [1972]
 Brightman J - "The essential elements which must be proved to exist are: (i) the
intention of the testator to subject the primary donee to an obligation in favour of
the secondary donee; (ii) communication of that intention to the primary donee;
and (iii) the acceptance of that obligation by the primary donee either expressly or
by acquiescence
o Any attempt to communicate the testator's intention after his death, for example by written
instructions, will be ineffective as the legatee's conscience will not be affected by the trust
at the time the will becomes effective
 However, where a testator gives the legatee a sealed envelope during his lifetime
containing precise instructions about the terms of the trust and it is not opened until
after the testator's death, this will be sufficient to give rise to a trust provided that the
legatee agrees in principle to carry out its terms during the course of the testator’s life
 The onus lies on the person seeking to show the existence of a secret trust to establish this on
the balance of probabilities
o While earlier authorities suggested that a higher standard of proof would be required, it
was stated in Re Snowdon [1979] that the ordinary civil standard of proof applies. In this
case Megarry VC suggested obiter that this standard might be higher if any question of
fraud arose.
o Although in Banco Ambrosiano v Ansbacher & Co [1987] the Supreme Court rejected the
suggestion that any higher burden of proof should be placed on a plaintiff where an
allegation of fraud is made in a civil case.

Secret Trusts Involving Joint Tenants and Tenants in Common
o Question that must be addressed is whether a secret trust will arise and who will be bound
by it where a testamentary gift is made to more than one person but the testator's
intentions with regard the creation of a trust are not communicated at all
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Traditionally the view taken has been that where the legatees are tenants in common
only those to whom the trust is communicated are bound by it - the others take the gift
beneficially
Re Stead [1900]
 Farwell J - " If A induces B, either to make, or to leave unrevoked, a will leaving
property to A, and C, as tenants in common, by expressly promising or tacitly
consenting, that he and C will carry out the testator’s wishes, and C knows nothing of
the matter until after B’s death, A is bound, but C is not bound"
 On the basis of this statement it seemed that in the case of tenants in common, only
those to whom the testator's intentions were communicated during his lifetime were
bound and that any other person took free of the trust and was entitled to share
beneficially
Geddis v Semple [1903]
 Facts:
 At the time the testator in Geddis executed his will, the effect of s 16 of the
Charitable Donations and Bequests (Ireland) Act 1844 was to render void all gifts
of land for charitable purpose unless the testator's will had been executed at least
three months prior to his death. With the intention of avoiding this statutory
restriction, the testator devised certain houses and pecuniary legacy charged on
land to three individuals as tenants in common, although at the time the will was
executed only one of the three was aware that the testator's intention was to
create a secret charitable trust
 Held:
 The Irish Court of Appeal held that while the gift to the individual who knew of the
testator's wishes must fail, the other tenants in common, who knew nothing until
after the testator's death, became beneficiaries entitled to their shares
 There is a suggestion in the judgement that an 'innocent' tenant in common might
be bound in such circumstances if it could be established that the testator was
induced to make the gift by the promise of a co-tenant on the basis of the
principle that 'no man may profit by the fraud of another'
This inducement theory was developed by Perrins who has suggested that Farwell J in re
Stead misinterpreted the authorities relied on to support the general theory set out above
 He has suggested that the only question to which the court should address itself in
such circumstances is whether the gift to the legatee who was unaware of the
testator's intention to create a secret trust was induced by the promise of the legatee
who knew of his intentions in this regard to carry out his wishes.
 If this approach is accepted, issues such as whether the legatees take as joint tenants
or tenants in common and whether the promise was made prior to or after the
execution of the will are merely matters of evidence which may be of assistance to the
court in deciding on the question of inducement but will not of themselves determine
the issue - although clearly if there is a promise made before the will an inducement is
likely.
3.3.2. Half Secret Trust
 A half secret trust arises where a testator leaves property to an individual in a will and expressly
directs this individual to hold the property on trust without specifying the terms of the trust.
Such a trust is treated as arising independently outside the will based on an undertaking by the
legatee to hold the trust property in accordance with the testator’s instructions.
o The principal advantage to be gained from employing this form of secret trust is that the
possibility of the legatee taking the property beneficially and successfully perpetrating a
fraud is avoided as it is clear from the fact of the will that a trust is intended
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However, where a testator manifests his intention to create a trust in this way the historical
justification for non-compliance with the statutory formalities required in the case of secret
trusts, namely the prevention of fraud, does not apply as it is clear from the face of the will
that a trust is intended
Riordan v Banon (1876)
o Facts:
 The testator's will directed that a legacy be disposed by the legatee 'in a manner of
which he alone shall be cognizant, and as contained in a memorandum which I shall
leave with him'. Prior to executing his will the testator had verbally informed the
legatee that he intended to leave the legacy to named person whom he did not which
to identify in his will and it was accepted that the legatee had agreed to carry out his
obligation.
o Held:
 Chatterton VC held that a valid secret trust had been created:
 ‘The result of the cases appears to me to be that a testator cannot by his will
reserve to himself the right of disposing subsequently of property by an
instrument not executed as required by the statute, or by parole; but that when,
at the time of making his will, he has formed the intention that a legacy thereby
given shall be disposed of by the legatee in a particular manner, not thereby
disclosed, but communicated to the legatee and assented to by him, at or before
the making of the will, or probably according to Moss v Cooper, subsequently to
the making of it, the court will allow such trust to be proved by admission of the
legatee, or other parole evidence and will, if it be legal, give effect to it.’
 Chatterton VC acknowledged that the same kind of fraud cannot operate in the case of
trusts which appear on the face of the will, he was prepared to extend this principle to
half secret trusts as the result of a refusal to enforce such trusts would be to defeat the
intention of the testator
To be a valid half secret trust, like a fully secret trust, must be communicated and accepted by
the legatee prior to the testator's death
Re Watters' Will Trusts (1928)
o Facts:
 A testator directed that his property should be applied for 'charitable purposes and
objects known to my executors'. After executing his will but during his lifetime, the
testator had a number of general conversations with one of his executors about the
manner in which he wished his assets to be applied but failed to specify precisely the
particualr purposes or objects which he intended to benefit.
o Held:
 A memorandum found after his death which contained such specific directions was
held not to be admissible as there had not been sufficient communication and
acceptance of the trust prior to the testator's death
An area of controversy and divergence in Irish and English law is whether there can be effective
communication and acceptance of a half secret trust after the execution of the testator's will
o In Riordan v Banon Chatterton commented that such subsequent communication was
'probably' acceptable
 That principle was reiterated by Monroe J in Re King's Estate (1888)
 Further confirmation that communication and acceptance of a half secret trust may
validly occur after the execution of a testator's will is found in Re Browne [1944]
o The Courts in England have not accepted the principle of subsequent communication
 Blackwell v Blackwell [1929]
 Facts
o




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o
 A testator gave a sum of money on trust to legatees to apply the income
thereof 'for the purposes indicated to me by them' in a codicil in his will.
Detailed instructions were given to one of the trustees and the others
accepted these terms in outline before execution of the codicil.
 Held:
 Viscount Sumner recognised that a half secret trust existed which arose
independently of the will
 ‘it is communication of the purpose to the legatee, coupled with
acquiescence or promise on his part, that removes the matter from the
provision of the Wills Act and brings it within the law of trust
 In the course of his judgement he laid down the following fundamental
principle:
 ‘A testator cannot reserve to himself a power of making future
unwitnessed dispositions by merely naming a trustee and leaving the
purposes of the trust to be supplied afterwards, nor can a legatee give
testamentary validity to an unexecuted codicil by accepting an indefinite
trust, never communicated to him in the testator’s lifetime.’
 This has subsequently been interpreted in England as authority for the
proposition that the communication and acceptance cannot be effective if
made after the execution of a will.
 Re Keen [1937]
 Facts:
 A testator gave a legacy to trustees 'to be held upon trust and disposed of
among such person, persons, or charities as may be notified by me to them or
either of them during my lifetime'. Before executing this will the testator had
given a sealed envelope to one of his trustees containing the name of the
intended beneficiary which the court accepted as 'notification'. The provision
in the will was interpreted as the reservation of a power which would be
contrary to Section 9 of the Wills Act 1837
 Held:
 In the view of Lord Wright MR, even if such subsequent communication had
been permitted, the trust would have failed on the ground of inconsistency
 Communication and acceptance had taken place prior to the execution
of the will, when the envelope was handed over, but the will provided
that communication would be in the future
 The Court of Appeal held that on the true construction of the will it reserved
power to the testator to dispose of property by future unattested disposition
contrary to the Wills Act 1837.
 In addition, the clause in the will referred to future definitions of trust
subsequent to the date of the will whereas the notification of the
directions had been communicated and accepted prior to the will.
 Re Keen was reaffirmed in Re Bateman's Will Trusts [1970]
The opportunity to end the confusion on communication and acceptance was presented to
the court in Prendiville v Prendiville [1995]
 Facts:
 The testator left his estate to his wife 'to be used by her according to my wishes as she has been advised'. Before he died the testator had told one of his sons that
he had written his wises out as to the passing of his estate after his wife's death
and had shown him a document containing those instructions which included a
property to be sold to the son at a reasonable price. Following the testators death,
his wife made a statutory declaration acknowledging his husbands instructions
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
had been communicated and accepted by her. After her death a dispute arose
between the next of kin of the testator and the son whose favour the opinion to
purchase had been made
Held:
 Barron J said that Re Keen had been relied on as an authority that a half secret
trust cannot be established unless its terms had been communicated and
accepted prior to the execution of the will - he felt that, that principle could not be
taken from that case as the case turned on inconsistency
 He applied the principles set out in Re King's Estate (1888) finding that a trust
existed on the face of the will and there was sufficient evidence that the
terms in relation to the option of purchase had been communicated the
testator’s wife during his lifetime
Prendiville v Prendiville is not entirely satisfactory as Barron J failed to point out at
which point the communication and acceptance occurred (before or after the
execution of the will)
 The use of the words ‘as she has been advised' would suggest that such
communication was intended to take place either before or at the time of
execution of the will and yet one must ask why Barron J took the trouble to refute
the suggestion that Re Keen was authority for the proposition that communication
must occur prior to the will, unless on the facts of the case before him,
communication did not take place until after its execution. Because of his failure
to be more specific about the timing of these events, it is therefore still not clear
whether Barron J's rejection of the need for prior communication forms part of
the ratio of the case.
 A further possible flaw in his judgment is the failure to address the potential
problem of inconsistency. Barron J appeared to endorse this ground of
inconsistency as being the basis for the decision in Re Keen and yet, if as his
rejection of the wider ground for that decision suggests, communication in the
case before him took place after the execution of the will, this would itself lead to
inconsistency with the terms of the instrument.
3.3.3. Academic Commentary
Mee, ‘Half-Secret Trusts in England and Ireland’, [1992] Conv 20
 [In Prendiville v Prendiville] …Irish Courts rejects "the prior acceptance rule" favoured in English
cases
o …this analysis [of English case law] is seriously flawed
 ON this basis [approving prior Irish case law] he was satisfied that there were no differences in
the rules applicable to fully secret and half-secret trusts
o Unfortunately, Barron J. embarked on an all-advised attempt to demonstrate that, far from
opposing his own conclusion, the English cases in fact supported it
 Barron J asserted that there was "nothing" in the judgement in Re Keen to indicate that
communication subsequent to the will was unacceptable and explained that case as turning
entirely on the fact that the communication which took place was inconsistent with the wording
of the will
 What is even more remarkable is that, having treated the inconsistency point as the sole basis
for the decision in Re Keen, the learned judge ignored that issue as it related to the facts before
him. It will be recalled that the will in Re Prendiville required the wife to deal with the property
“as she has been advised,” so that there would have been an inconsistency if communication
had taken place after the execution of the will. Yet, without adverting to this question, Barron J.
felt able to conclude that it was immaterial whether the communication and acceptance of the
instructions had taken place before or after the execution of the will
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Critchley, ‘Instruments of Fraud, Testamentary Dispositions, and the Doctrine of Secret Trusts’ (1999)
115 LQR 631
 Introduction
o One of the maxims of equity which has proved to have a long shelf-life is that ‘equity will not
allow a statute to be used as an instrument of fraud’
 The usage of this maxim has gradually shifted from interpretation to circumvention of
statutory provisions when oral evidence of trusts was allowed so as to prevent fraud,
specifically going against the Statute of Frauds 1677
 Statutory formality provisions have been favourite targets for this newer, more
radical application of the maxim
 What is a Secret Trust?
o The doctrine has three essential elements: 1. The intention to create a trust, 2.
Communication of that intention and the terms of the trust to the secret trustee, 3.
Acceptance of that trust by the secret trustee
o Where a fully secret trust fails the legatee may keep the property beneficially
o Where a half-secret trust fails the legatee may hold for the testator’s estate
 The Dehors the Will Theory
o Secret trusts have always been seen to be infringing on the provisions surrounding the
formalities of making a will
 However, this is traditionally justified by saying that secret trusts arise ‘dehors the will’ –
outside the will – and therefore are not subject to the requirements of the provisions
o This is problematic since any testamentary document must follow those provisions
 Academics who favour the dehors theory state that secret trusts are not testamentary
but are in fact inter vivos express trusts, declared by the testator when he communicates
them to the trustee, but only fully constituted when the property is transferred on the
testator’s death
 This seems a little implausible since the average secret trust testator believes he is
stating the trusts which is property will be held on after death, rather than declaring
an immediate trust. This is not a conclusive argument
 More problematic is that a further declaration should theoretically have to be made
when the property is acquired to comply with this theory, but this does not happen
o The real root of the problem with this theory is it dependent on a certain definition of
testamentary and inter vivos which may not be the most applicable
 It confuses outside the will with outside the wills act
 Incorporation by Reference as a Basis for Half-Secret Trusts?
o It has been argued by Matthews that half secret trusts, despite their superficial similarity to
fully secret trusts, are actually based upon the separate doctrine of incorporation by
reference.
 This doctrine permits part of a testamentary disposition to be expressed in a document
which does not comply with the testamentary formality requirements.
o For incorporation by reference to operate, four requirements must be satisfied.
 First, the desired disposition must be expressed in writing.
 Secondly, that document must be in existence at the date of execution of the will, or of
its republication by a later codicil.
 Thirdly, the will itself must refer to the document as being one which is in existence.
 Finally, the document must be referred to in the will in such a manner as will enable it to
be clearly ascertained
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Claims that half-secret trusts are actually based on incorporation by reference may not
sustainable
 However, if the matter is approached as a question of analogy rather than unity there is
more scope for argument
o There are important differences between the two doctrines in the current forms
 Firstly, in half-secret trusts the wishes of the testator can be made known orally while
for incorporation by reference there must be a written document
 Secondly, a greater degree of specificity is required for the incorporation by reference to
be successful
 Thirdly, incorporation by reference is usually done for efficiency while secret trusts for
secrecy
 Finally, the elements of communication and acceptance inter vivos which are essential to
half-secret trusts are missing from incorporation by reference
 Assessing the Fraud Argument
o The fraud maxim can be seen as a very specific argument based on legal policy
 The reasoning behind seems to be that although legal formality rules have beneficial
effects, their strict enforcement in some circumstances can be harmful
o The Legal formality rules can be abused
 By the personal moral wrongdoing of the trustee who denies the existence of the trust
 Or harming the beneficiary who fails to get the interest the testator intended him to
have
 Harm to the testator who loses his interest in the property and fails to have intentions
carried out
 This is the strongest argument
o On balance, therefore, where a fully secret trustee actively seeks to deny the trust and keep
the property beneficially, the fraud maxim may present a fairly good argument in favour of
enforcing the informal trust, provided that the standard of conduct required to show fraud is
maintained at a sufficiently high level
 Conclusion
o This article reaches two principle conclusions
 First, that the dehors the will theory, and similar arguments, cannot justify the
informality of secret trusts
 Secondly, the fraud maxim may possibly justify such informality
o
Kincaid, ‘The Tangled Web: The Relationship Between a Secret Trust and the Will’, [2000] Conv 420
 Secret Trustee is a Witness
o A trustee who does not take a beneficial interest can be a witness without affecting the
validity of the bequest
 Therefore, it does not matter if the secret trustee witnesses the will
 Hayton says if a fully secret trustee happened to attest the will then the secret trust
would fail since a beneficial interest is given to the trustee in the will
o The secret beneficiary who does have a beneficial interest may well not be aware of it at
the time of witnessing the will.
 It would be unjust to deprive the beneficiary of that interest when at the time of
witnessing the will he or she was completely unaware of it
 Revocation of a Secret Trust
o When one looks at the question of revocation of secret trusts, one comes up against an
inconsistency.
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



One of the basic characteristics of wills is that they are revocable and can be revoked at
any time until the death of the testator
 However, the basic characteristic of a trust is that once it is created it cannot be revoked
o Can we say that a secret trust does not share the revocable characteristics of the will under
which it is made but is governed by the rules relating to trusts because it is a separate
creation and is outside or dehors the will?
 Case law does not support this view
 However, in a case of a half-secret trust where the letter containing the details was lost
it was doubted that the secret trust could only be revoked by revoking the will itself
o There appears to be two different rules in play.
 The normal rule in equity is that a trust once fully set up cannot be undone by the settlor
unless the settlor has reserved that right, even though the settlor's wishes and intentions
have changed.
 The more specific rule, which Starke J. puts forward, is that equity would not allow the
donee to set up trusts contrary to the settlor's changed intentions.
Alteration of the Secret Trust
o It has been held that where there is an alteration of a secret trust but no communication or
acceptance of the secret trust on the new arrangements then the alterations are not held to
be enforceable
o Kincaid suggests that if there is to be an emphasis on the need for communication and
acceptance, this emphasis is equally valid for a trust which is reduced in value
o A secret settlor who wants to have some flexibility would be advised to specify a proportion
of the estate or the residue to be covered by the secret trust. Thus, if the estate increases,
the secret trust fund will also increase (although the opposite will also apply).
Death of the Secret Beneficiary
o If the secret trust only operates from the death of the will maker when there is property to
which it may attach, then if the secret beneficiary has died before the trust became
operative, the expectation would be that the gift would lapse, and the secret beneficiary's
estate would not take
Conclusion
o There is logic to the remark that as one can have a secret trust without a will, then it must
be possible to have a secret trust outside a will
 However, a secret trust does not operate completely independently and to say that it
exists outside the will gives a false impression
Perrins (1972) 88 LQR 225:
 Suggested that the only question to which the court should address itself in such circumstances
is whether the gift to the legatee who was unaware of the testator's intention to create a secret
trust was induced by the promise of the legatee who knew of his intentions in this regard to
carry out his wishes.
 If this approach is accepted, issues such as whether the legatees take as joint tenants or tenants
in common and whether the promise was made prior to or after the execution of the will are
merely matters of evidence which may be of assistance to the court in deciding on the question
of inducement but will not of themselves determine the issue
Berger Textbook
 States that the law in England should be simplified. Broader rationale of preventing
unconscionable conduct should be the key principle. Both should be recognised as a means of
avoiding fraud and in both cases requirements (communication and acceptance) should be the
same.
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3.4. Constitution of Trusts
Introduction
 A trust is said to be completely constituted when the trust property has been vested in the
trustees for the benefit of the beneficiaries
o A trust remains incompletely constituted until this is done
 The importance of the distinction between completely and incompletely constituted
trusts lies in the fact that once a trust is completely constituted it can be enforced by
any beneficiary, whether he has given value or is a mere volunteer.
 However, if a trust is incompletely constituted, subject to certain exceptions, only
beneficiaries who have given value can enforce it and volunteers cannot enforce the
trust. Generally speaking, equity will not enforce or perfect an incomplete or imperfect
trust in favour of a volunteer.
 Milroy v Lord (1862)
 Turner LJ - ‘In order to render a voluntary settlement valid and effectual, the
settlor must have done everything which, according to the nature of the property
comprised in the settlement, was necessary to be done in order to transfer the
property and render the settlement binding upon him.’
o Equity will not enforce or perfect an incompletely constituted trust in favour of a volunteer
Complete Constitution of a Trust
 Transfer of Trust Property
o There are two main ways in which a trust may be completely constituted
 (1) by transferring the trust property to the trustees inter vivos or by will or
 (2) by declaration of trust, i.e. the settlor may declare himself to be a trustee either
expressly or by implication.
 In order to completely constitute a trust by method (1), there must be an effective
transfer of the property to be included in the trust and an intention on the settlor’s
part to bring about such a transfer will generally not suffice
o In order to completely constitute a trust by this method, there must be an effective transfer
of the property to be included in the trust and an intention of the settlor's part to bring
about such a transfer will not suffice
o McArdle v O'Donohoe [1999]
 Facts:
 The settlor purported to execute a deed of settlement to make provision for his
adopted daughter and her children
 Held:
 O'Donovan J stated he was satisfied that at the time the deed was executed, it
was the settlor’s intention that money invested in a bond would form part of the
trust fun. However, he concluded that the settlor never effectively transferred any
monies or property which might be included in the 'trust fund' as defined in the
deed of settlement and that the trust created by deed of settlement was not
completely constituted
o Milroy v Lord (1862)
 Facts:
 A settlor executed a voluntary deed purporting to transfer shares in a bank to be
held on trust for the plaintiff. Such a transfer could only be properly affected by
registration of the name of the transferee in the bank's records. While the trustee
held the power of attorney to act on the shareholders behalf, he failed to register
the transfer
 Held:
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
 The Court of Appeal held that no enforceable trust in favour of the plaintiffs had
been created
o Re Rose [1952]
 Facts:
 A settlor executed a voluntary deed which purported to transfer shares in a
private company to trustees but died before the transfer was registered by the
company's directors.
 Issue:
 The question arose whether the settlor was still the owner of the shares at the
time of his death
 Held:
 The Court of Appeal held that as the settlor had done all in his power to divest
himself of the shares, although he remained in law the owner until the transfer
was registered, in equity to transfer was regarded as being effective from the date
of the deed
o Pennington v Waine [2002]
 The Court of Appeal took the opportunity to consider the exception to the principle in
Milroy v Lord set out in cases such as Re Rose in some detail
 Facts:
 The donor wanted to transfer shares in a company to her nephew, the second
named defendant, and to make him director of it. The articles of association of
this company required that in order for an individual to become a director he
must at least hold a share in it. The company's auditors informed the second
defendant of the share transfer and he signed a form of consent to act as a
director which was countersigned by the donor. The donor signed a share transfer
form, but it was retained by the company's auditors and was not sent to the
second defendant. Following the donor’s death, the residuary beneficiaries under
her will sought a determination of whether there had been a valid transfer of her
shares
 Held:
 Howarth J held that the gift had become effective once the share transfer form
was signed
 Arden LJ stated that there was a clear finding that the donor intended to make an
immediate gift and that a stage had been reached when it would have been
unconscionable for her to recall it.
 In her view delivery of the share transfer before the donor’s death was
unnecessary so far as the perfection of the gift was concerned and it was not
a case of equity being asked to complete an imperfect gift.
 The Court of Appeal agreed that the delivery of the share transfer certificate was
not required and there had been a valid equitable assignment of shares
The alternative method of completely constituting a trust is for a settlor to declare himself a
trustee of property for the benefit of third parties.
o T. Choithram International SA v Pagarani [2001]
 Lord Borwne-Wilkinson highlighted the contrast between the maxims that equity will
not aid a volunteer and that it will not strive officiously to defeat a gift. In his view, if
equity refused to help the second defendant in the case before the court, it would be
preferring the former maxim to the latter in a situation where all circumstances of the
case led to the conclusion that it should give effect to the gift which the donor
intended
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
The decision of the Privy Council makes it clear that where the settlor is one of a
number of co-trustees the trust may be completely constituted by a declaration of
trust made by him even though the property has still to be vested in the co-trustees.
Exceptions to the Principle that Equity will not Perfect an Incompletely Constituted Trust in Favour of
a Volunteer
 The Rule in Strong v Bird
o The effect of the rule in Strong v Bird [1999] is that where an incomplete gift is made during
a donor's lifetime and the legal title to this property subsequently becomes vested in the
donee, the donor's prior intention to make the gift is regarded as having been perfected
provided that the intention has continued up until the date of the donor's death
o This was extended to a positive application of the principle in Re Stewart (1874)
 A finding that an imperfect gift made by the testator inter vivos to his wife was
subsequently perfected by her appointment as one of his executors
 Donatio Mortis Causa
o A donatio mortis causa is the delivery of property to a donee in contemplation of a donor's
death which is conditional on this event occurring and the gift is not regarded as complete
until the donor dies
o Sen v Headley [1991]
 It was held by the Court of Appeal that a gift of land by the delivery of deeds should
not be excluded from the doctrine of donatio mortis causa.
o Bentham v Potterton [1998]
 Facts:
 The deceased in her will bequeathed cash legacies in varying amounts to nine
beneficiaries, including the first and second plaintiff (her grandnieces), and a
residuary clause provided for the division of the remainder of her estate equally
between all but one of her named beneficiaries. The deceased was hospitalised
two months before her death
 Barr J was satisfied that there was no evidence that she has ever been told
that her condition was terminal, and it was not until a week before her death
that she told her niece that she knew she was dying.
 Three and a half weeks before her death the deceased asked the first plaintiff to
retrieve bank books from her house and put them in a safe in the niece's home.
The deceased told her to keep the contents and give her sister a few bobs out of it
 Issue:
 Did this interaction amount to donatio mortis causa?
 Held:
 Barr J found that the plaintiffs had failed to prove that on the balance of
probabilities that the gift was made in contemplation of death
o King v Dubrey [2016]
 The Court of Appeal suggested that the doctrine of donatio mortis causa serves little
useful purpose today and that the courts should not permit any further expansion of it.
 Jackson LJ stated that the doctrine paves the way for all of the abuses which legislation
such as the Wills Act is intended to prevent, and he added that in his view it was
important to keep donatio mortis causa within its proper bounds.
 Patten LJ stated that ‘the paramount principle is that the law’s recognition of a donatio
mortis causa as a valid means of transferring property on death operates as an
exception rather than an alternative to the requirements of the Wills Act or any other
statutory provisions governing the valid transmission of interests in property.
o The Law Commission in its Consultation Paper, Making a Will, has examined the future of
the donatio mortis causa doctrine.
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

It noted the danger of abuse presented by the doctrine, in particular the risk of fraud
and dispute. However, it also expressed the view that the doctrine may continue to
serve a useful purpose, ‘because it “softens” the hard edges of formalities law.’
 Taking that into account the lack of evidence either way as to problems caused by
donatio mortis causa in practice, and the arguments that in principle could be made
both for and against abolition, it asked for views on whether the doctrine should be
abolished or retained.
Proprietary Estoppel
o Where an imperfect gift has been made and the donor knowingly allows the donee to
improve the property or to act to his detriment in some manner, equity may compel the
donor to perfect the gift even where the donee is a volunteer
3.4.1. Academic Commentary
Delany and Ryan, ‘Unconscionability: A Unifying Theme in Equity’, [2008] Conv 401
 Introduction
o The article is concerned with considering one fundamental question: can the principle of
unconscionability provide a unified interpretative framework through which equitable
jurisdiction generally can be explained, measured and evaluated?
o Halliwell identified as the “essence” of the principle of unconscionability that:
 “[A] party in either a social or commercial relationship with another person will not be
allowed to take unconscientious advantage of that other person.”
 Unconscionability as a constituent ingredient in a cause of action
o Unconscionability as a basis for a cause of action in estoppel
 The principle of unconscionability has only relatively recently become recognised as the
‘organising concept’ for estoppel. This change began with Taylors Fashions Ltd v Liverpool
Victoria Trustees Co Ltd
 In Lim Teng Huan v Ang Swee Chuan Lord browne-Wilkinson referred to the decision
in Taylors Fashion and said that it showed that in order to found a proprietary
estoppel: “… it is enough if, in all circumstances, it is unconscionable for the
representor to go back on the assumption which he has permitted the representee to
make.”
 Here the principle of unconscionability was elevated above all else and acknowledged
as the axis on which proprietary estoppel revolved
 Until very recently there has been a definite lack of consistency in the approach adopted
by the courts in regards unconscionability
 One of the most important decisions dramatically displaying this centrality of
unconscionability is Gillet v Holt
 Robert Walker L.J. in his judgement stated “… the fundamental principle that equity is
concerned to prevent unconscionable conduct permeates all elements of this
doctrine, In the end the court must look at the matter in the round”
 Some years ago, Pawlowski commented that while “… the modern approach is to explain
the doctrine in terms of a general concept of unconscionability, the courts do require the
estoppel claimant to prove the three essential elements (i.e. assurance, reliance and
detriment) as a prerequisite to a successful claim”
 This raises a key issue, namely the relationship with the three traditional elements of
proprietary estoppel and the concept of unconscionability
 One interpretation of the approach in Gillet v Holt is that unconscionability is
simply a function of the three elements and has no independent existence outside
them
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 However, unconscionability does not invariably arise where the elements are
present
 It is correct to assert that the notion of unconscionability does lie at the heart of the
doctrine of proprietary estoppel and that it is the essential ingredient in the cause of
action
o Unconscionability as a basis for determining the extent of the remedy in estoppel
 There has always tended to be a degree of uncertainty about what the doctrine of
proprietary estoppel should seek to achieve. Ascertaining the objective(s) of the doctrine
is of course fundamental to any appraisal of the role played by unconscionability in this
area.
 Is proprietary estoppel designed to fulfil the expectations of a party which have
arisen as a result of his dealings with another, or is its role the more limited one of
reversing any detriment suffered as a result of reliance on the promise of another
 The growing prominence of the unconscionability paradigm is also to be witnessed, both
in Australia and in England, in the increasing importance of the principles of
proportionality and unconscionability in determining how to satisfy the equity which
arises where an estoppel is raised
 Gardner, in his analysis of Jennings, puts forward the view that the aim of the jurisdiction
is to rectify unconscionability and that the claimant's expectations and reliance are
relevant because they are the essential ingredients of the unconscionability
 Delany and Ryan submit that an approach based squarely on the notion of
unconscionability should be preferred to one founded either on an expectation or
reliance-based model which focus almost exclusively on the claimant's expectations and
actions
 Unconscionability as a springboard for the fashioning of new remedies in equity
o Outside the context of proprietary estoppel, the conception of equitable intervention being
premised on unconscionability perhaps finds clearest expression in the context of the
constructive trust
o The acceptability of the constructive trust mechanism for deploying the principle of
unconscionability has been readily accepted by many jurists
 The virtues of flexibility and malleably personify the type of judicial intervention being
triggered to fashion a new remedy in this regard. However, the deployment of the
unconscionability paradigm in an effort to fashion new remedies will not be met with
universal judicial support (e.g. new model constructive trust)
o The use of unconscionability in making new remedies have sometimes been reluctantly
embraced for fear of it leading to a form of palm-tree justice
o It has been generally acknowledged that the concept of ‘justice’ is too uncertain a basis on
which to found a constructive trust that will create proprietary rights which may operate in a
wider context than anticipated or required
 Lord Denning pioneered just such a development in Hussey v Palmer saying a constructive
trust will be imposed “whenever justice and good conscience require it”
o More recently debate has developed about the potential of a remedial constructive trust ti fill
the gap left by Lord Denning’s creation
 There has been some case law supporting its imposition
 However, there has also been commentary that it may not take root in England
 In Canada the new model constructive trust has met with a limited degree of approval in
a “much modified and more acceptable form” that has sought to control the breadth of
the unconscionability principle.
 But this is primarily to prevent unjust enrichment but still may occur where no such
enrichment has occurred
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
Unconscionability as a yardstick for assessing whether defendants have adhered to certain
expected standards of conduct
o Considers in particular commercial fraud cases involving the potential imposition of liability
upon accessories for assistance in a breach of trust or for receipt of trust property
 Two arguments are advanced:
 The first is that the importance of the distinction between social and commercial
relationships can be scarcely over-emphasised in so far as the application of the
unconscionability principle is concerned;
 The second is that in this commercial context, a nuanced and discerning application
of the unconscionability principle can in fact serve to illuminate the true nature of
liability in a given substantive sphere: in this case, accessorial liability in equity.
 Unconscionability as a vehicle for arriving at a desired result
o Must consider Pennington v Waine
 The approach taken by Arden L.J. to the application of the principle of unconscionability
has been strongly criticised
 Garton commented that it should not be seen as introducing a new exception to the
rule against perfecting imperfect gifts, but it recast Re Rose to shift the focus away
from the extent the formalities were completed and into the conscience of the
transferor
 It is difficult to accept that this use of unconscionability is theoretically sound
 Halliwell critiques it saying it represents unfettered judicial discretion and that
unconscionability mist be based on principled reasoning
 Conclusion: A unifying theme?
o At the lower end of the spectrum, the principle can be deployed as a substantive cause of
action since it is at the very core of that cause of action (proprietary estoppel).
 But as the degree of judicial intervention needed in order to engage the principle of
unconscionability increases, concerns about its legitimacy and sustainability begin
tomount
o it seems fittingly ironic that a unifying theme of the use of the unconscionability principle
across a wide spectrum of very different contexts is that this allegedly impenetrable and
hopelessly obscure principle should itself emerge as a clarifying force, casting fresh light upon
and signalling new directions in equitable relief.
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3.5. Resulting Trusts
Introduction
 General Principles
o Resulting trusts can be said to arise by implication and are founded on the unexpressed but
presumed intention of the settlor
 This label is used to describe such trusts because the beneficial interest in the property
in question comes back or results to the settlor or, if he is dead, those entitled to his
estate, where the law presumes this was the settlor's intention
 Due to the informal manner in which they come into being, such trusts are exempt
from the formalities required in relation to the creation of express trusts
o There are lot of possible bases for the rationale behind resulting trusts, in practice they tend
to give rise to two distinct factual situations:
 Where there has been an apparent gift of property
 Where an express trust has failed to dispose of the trust property
o Traditionally, resulting trusts can be categorised in accordance with a distinction made by
Megarry J in Re Vandervell’s Trusts (No.2) [1974]
 Automatically resulting trusts. Where a trust has been declared but the beneficial
interest fails for some reason or the entire beneficial interest is not disposed of.
 Presumed resulting trusts. Such trusts arise where property is transferred to a grantee
who gives no consideration, so as a result of voluntary dispositions of property or the
purchase of property in the name of a third party. In certain circumstances the
presumption of a resulting trust can be displaced, e.g. by the presumption of
advancement or by showing an intention to benefit the transferee.

Theoretical Basis for Resulting Trusts
o A number of potentially unifying theories have been put forward to challenge the
orthodoxy of Megarry J's distinction between presumed and resulting trusts
o In Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996]
 Lord Browne-Wilkinson queried whether Megarry J was correct in his assumption that
some trusts do not depend on intention but operate automatically.
3.5.1. Automatically Resulting Trusts
 Failure of the Trust
o Where an express trust fails completely for any reason, a resulting trust of the trust
property will arise in favour of the settlor or his estate. This may occur for a variety of
reasons
 e.g. there may have been a total failure of the beneficiaries; where it is sought to
create a half secret trust but the nature of the trust or the beneficiaries are not
specified; the settlement deed defining the scope of the trust may have been lost, the
trust may be void for uncertainty, or may fail to qualify for charitable status in
circumstances where it cannot operate as a valid purpose trust.
o Vandervell v IRC [1967]
 Facts:
 The appellant transferred shares in a private company to a college which he
wished to endow with the intention of declaring dividends on the shares. The
effect of the arrangement was that the college would grant an option to a
company which acted as a trustee for various family trusts enabling the shares to
be acquired by the company, although it was not stated on what trusts these
shares were to be held
 Held:
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 The House of Lords held that the option was held on a resulting trust for the
appellant with the result that not having divested himself completely of his
interest in the shares, he as liable for surtax on the dividends paid to the college
 Lord Wilberforce stated
 ‘the conclusion on the facts found, is simply that the option was vested in the
trustee company as a trustee on trusts, not defined at the time, possibly to be
defined later. But the equitable, or beneficial interest, cannot remain in the
air: the consequence in law must be that it remains in the settlor'

Failure to Exhaust the Beneficial Interest
o In practice a trust does not often fail completely but a situation may quite frequently arise
where there has been an incomplete disposal of the beneficial interest under a trust. Even
though it may appear at the time a trust instrument or will is executed that this interest has
been fully disposed of, subsequent events may occur, or fail to occur, which may change
this position.
o It may be difficult to distinguish a gift to a trustee on a trust solely to carry out a specified
purpose, the implication being that any remaining surplus will be held on resulting trust,
from a situation where a gift is made to a donee, subject to the carrying out of some
obligation in which the case he will be permitted to keep whatever remains after this
obligation has been filled
 Re West and Re Ford
o A number of cases have dealt with the circumstances where property is given on trust for
the maintenance or education of specified persons and the difficulties which arise when
these purposes are fulfilled. Where the specified purposes can be regarded as merely
constituting the testator's motive for making the gift, the donee will be permitted to retain
the property, but this may be difficult to establish particularly where it is the donee's estate,
rather than the donee personally, who stands to benefit.
 Re Trusts of the Abbott Fund [1900]
 Facts:
 Contributions were made to a fund to be used for the maintenance of two
distressed ladies. No provision had been made in relation to the disposal of
the fund on the death of the survivor
 Held:
 Stirling J held that on her death the balance of the fund should be held on a
resulting trust for the subscribers
 Re Andrew's Trust [1905]
 A fund was subscribed to by the friends of a deceased clergyman for the education
of his children
 Kekewich J held that when the children’s formal education was complete, no
resulting trust of the remaining balance should arise and that it should
instead be divided equally amongst them
 He quoted with approval a passage from Wood VC's judgement in Re
Sanderson's Trusts:
 "If a gross sum be given, or if the whole income of the property be given,
and a special purpose be assigned for that gift, this Court always regards
the gift as absolute, and the purpose merely as the motive of the gift,
and therefore holds that the gift must take effect as to the whole sum or
the whole income, as the case may be."
 He felt that he was entitled to construe 'education' in the broadest
possible manner and even if a narrow interpretation were to be placed
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on the meaning of that word, it could be interpreted as being merely the
'motive of the gift'
3.5.2. Presumed Resulting Trusts
 As a general principle, where the ownership of property is transferred to a grantee who gives no
consideration, an inference arises that the grantee holds the property by way of a resulting trust
for the grantor where there is (1) voluntary conveyance or transfer and (2) purchase in the name
of another.
o However, it must be stressed that is only a presumption which can be rebutted by evidence
that a contrary result was intended. It can also be displaced by the presumption of
advancement, which involves the inference being drawn that a gift of property was
intended rather than that it should be held on a resulting trust because of the relationship
between the parties.
 Voluntary Conveyance or Transfer
o Where the owner of property makes a voluntary transfer of it to another person, a
presumption of a resulting trust arises unless there is sufficient evidence of a contrary
intention to rebut the presumption or the presumption of advancements dictates otherwise
o Conveyance of Land
 The law relating to the transfer of freehold land is now affected by statute in Ireland
and England.
 Ireland - Section 62(3) of the Land and Conveyancing Law Reform Act 2009
provides that in a voluntary conveyance a resulting use for the grantor is not
implied merely because the land is not expressed to be conveyed for the use or
benefit of the grantee.
 England - Section 60(3) of the Law of Property Act 1925 is in similar terms but
refers to a ‘resulting trust’. The effect of these provisions would appear to be that
a voluntary conveyance of land takes effect as expressed unless there is evidence
of a contrary intention.
 There has been considerable debate about the effect of Section 60(3)
 Mee is correct in suggesting that 'the majority view is that s.60(3) must be taken
to eliminate the pre-1926 presumption of resulting trust, although a resulting trust
can still arise if the grantee can adduce evidence showing that this was the
intention'
 Where the owner of personal property makes a voluntary transfer of it to another
person, a presumption of a resulting trust arises unless there is sufficient evidence of a
contrary intention to rebut the presumption (evidence of an intention to benefit the
transferee as in Standing v Bowring (1885)) or the presumption of advancement
dictates otherwise.
o Transfer Personalty
 Where there is a voluntary transfer of personalty, the transferee is presumed to hold
the property on a resulting trust for the transferor
 This presumption will arise most often where there is a voluntary transfer into the
joint names of the transferor and transferee, but it may also be raised where the
transfer is made solely to the transferee
 Re Vinogradoff [1935]
 Facts:
 A testatrix had transferred an £800 war loan into the joint names of herself
and her four-year-old granddaughter but continued to receive the dividends
until her death
 Held:
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 Farwell J held that after her death, the granddaughter held the loan on
resulting trust for the testatrix's estate
 The decision illustrates well that presumed resulting trusts often arise in
circumstances where it is highly questionable whether it would actually
reflect the settlor's real intentions
Standing v Bowring (1885)
 Facts:
 The plaintiff widow transferred stock into the joint names of herself and her
godson, the defendant, having been warned that if she made the transfer she
could not revoke it.
 Held:
 It was held that the plaintiff could not claim a re-transfer on equitable
grounds because she had not intended to make the defendant a mere trustee
except in relation to the dividends payable on the stock
 On the contrary, there was ample evidence to suggest that at the time of
the transfer she intended to benefit the defendant and the presumption
of a resulting trust was therefore rebutted
 Cotton LJ stated:
 ‘[T]he rule is well settled that where there is a transfer by a person into
his own name jointly with that of a person who is not his child, or his
adopted child, then there is prima facie a resulting trust for the
transferor. But that is a presumption capable of being rebutted by
showing that at the time the transferor intended a benefit to the
transferee
The manner in which the presumption may be rebutted was also considered by the
Supreme Court in Stanley v Kieran [2011] considered below in the context of rebutting
a resulting trust where property is purchased in the name of another.
Joint Deposit Accounts
o One of the most common situations in which a transfer of property takes place into the
joint names of the transferor and transferee is where a joint deposit account is opened.
 This is usually done in a manner which allows the transferor or depositor alone to
retain dominion over the money in the account during his lifetime, but which displays
the intention that the balance should go to the other party should he survive him.
 Where such an arrangement is put in place the question arises whether the money
which remains in the account on the depositor's death should be subject to a resulting
trust in favour of his estate or whether it can be paid over to the other party.
o The main policy argument against allowing the survivor or transferee to take a beneficial
interest in circumstances where he has made no contribution to the monies in the account
is that such an interest arguably passes as a form of testamentary disposition which has not
complied with the formalities required by the Succession Act 1965.
 As we have seen above in relation to secret trusts, the courts in this jurisdiction have
not always taken such a strict approach to this issue.
 It is ironic then that in the area of presumed resulting trusts, which are in theory
supposed to give effect to a settlor or testator's intentions, the judiciary in this
jurisdiction had until the recent Supreme Court decision in Lynch v Burke [1995]
adopted a more restrictive approach to this policy question and often succeeded in
arriving at a result which might be quite contrary to the transferor's actual intentions.
o Owens v Greene [1932]
 Decline to follow the Lynch v Burke approach
 Facts:
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 The deceased kept sums of money on deposit in the joint names of himself and a
nephew, and of himself and a distant relative. He retained control over these
funds during his lifetime but made clear that he wished the money to go to the codepositors in the event of his death
 Held:
 The Supreme Court held that these persons, who were volunteers, had failed to
rebut the presumption of a resulting trust in favour of the deceased's personal
representatives
 Kennedy CJ stated that whole it was open to the plaintiff's to seek to rebut the
presumption which arose in the circumstances this could only be done by
establishing that it was the deceased's intention when putting the money in the
accounts to give to the plaintiffs ‘then and there and by that act, a right, that is to
say an immediate present right to take the monies with which he associated their
respective names by survivorship’
Lynch v Burke [1990]
 Facts:
 The deceased open a joint deposit account in the names of herself and the first
defendant, her niece. The latter had travelled from Scotland, at her aunt’s request,
and both signed the necessary documentation for opening the account. All
lodgements were made by the deceased and the account deposit book was
endorsed payable to the deceased only or survivor. The deceased bequeathed all
her property to the plaintiff
 Held:
 O'Hanlon J held that a resulting trust arose and therefore the plaintiff was entitled
to the money remaining in the joint account
 O'Hanlon J arrived at this conclusion by stating that the general principle
where money is deposited in a joint account by a person who subsequently
dies, is an equitable presumption of a resulting trust against the survivor in
favour of the estate of the deceased
 On the facts he held that the deceased had intended that the first defendant
be entitled by right of survivorship to the beneficial interest in the money but
felt obliged to follow the authority in Owens
 O'Hanlon favoured the approach in Russell v Scott
Russell v Scott (1936) – Australian
 Facts:
 An elderly woman transferred money into an account in the joint names of herself
and her nephew
 Held:
 Dixon and Evatt JJ found that she did not intend for the nephew to benefit during
her lifetime they concluded that:
 "by placing the money in the joint names, the deceased did then and there
and by that act give a present right of survivorship"
 The court interpreted her actions as giving the nephew an immediate beneficial
interest which however, did not fall into possession until her death and which
might be revoked up until that time
 This approach was a plausible alternative to the reasoning in Owens
Lynch v Burke [1995]
 Supreme Court decision
 O'Flaherty J considered the legal effect of opening a deposit account in joint names.
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
 He said that by her presence and signature, it was manifest that the first named
defendant was a party to the contract from the outset and she must be entitled to
claim as a party to the contract under its terms.
 He stated that since historically, the concept of a resulting trust was an invention
of equity to defeat the misappropriation of property as a consequence of
potentially fraudulent or improvident transactions, it would be paradoxical if the
doctrine was allowed to defeat the clear intention of the donor as found by the
trial judge.
 O'Flaherty J commented that if the arrangement in the case before him was not
testamentary, which in his view it was not, the statutory requirements relating to
testamentary dispositions had no application.
 O'Flaherty J also stated that Owens had given cause for unease on a number of
grounds and concluded that it was wrongly decided and should be overruled.
 One cannot but agree with O'Flaherty J in Lynch and the decision has laid to rest the
paradoxical decision in Owens
However, as Capper points out (1996) 'the underlying doctrinal principles remain very
unclear' and there are conceptual difficulties with both the 'gift theory' and the 'contract
theory'. Capper suggests that the 'contract theory' is preferable, and on this basis provided
that the survivor has signed the necessary contractual documents and there is sufficient
evidence of the donor's intention to rebut the presumption of a resulting trust, the
outcome in similar cases in the future should be the same as in Lynch.
See also Woods (2002) who points to a number of potential flaws in the contract theory and
favours the conditional gift theory
O'Meara v Bank of Scotland plc [2014]
 Facts:
 Court had to determine the beneficial ownership of monies in two joint deposit
accounts in the names of the plaintiff widow and her late husband which the
defendant bank claimed to be entitled to set off against monies owed to it by the
deceased
 Held:
 In relation to the money lodged in the first account, a presumption of
advancement applied which Laffoy J was satisfied had not been displaced
 She therefore found that the parties were the joint beneficial owners of the
money in the first joint deposit account
 She said obiter:
 ‘"[on the authority of [Lynch v Burke], the legal effect of the opening of that
account in the joint names of [the deceased] and the plaintiff on foot of the
application signed by both of them was that the defendant became
contractually bound to both account holders and, as a matter of contract
between the plaintiff, as surviving joint account holder, and the defendant,
she became entitled to the balance in the account on the death of [the
deceased]."
 Laffoy J found that there was no contractual relationship between the parties in
relation to the monies in the second deposit account
 She found that the ‘plaintiff was not a party to it at any time’ and commented
that ‘therefore the decision of the Supreme Court in Lynch v Burke, in my
view, does not assist the plaintiff.
Purchase in the Name of Another
o A variation of the principle of voluntary co
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Conveyances or transfers of property applies where property is purchased in the name of
another
 So, where a person provides the purchase money for property, whether real or
personal, which is conveyed or transferred to another person or to himself and another
person jointly, it is presumed that the latter hold the property on a resulting trust for
the person who provided the purchase money
The principle was set out in Dyer v Dyer (1788)
 Eyre CB - "The clear result of all the cases, without a single exception, is that the trust
of a legal estate…whether taken in the names of the purchasers and others jointly, or
in the names of others without that of the purchaser; whether in one name or several;
whether jointly or successive, results to the man who advances the purchase money."
Rebutting the Presumption of a Resulting Trust
o Evidence of Intention to Benefit
 Where evidence establishes that the transferor or purchaser intended to benefit the
donee, no resulting trust will arise
 Standing v Bowring (1885)
 See above
 The Court of Appeal makes it clear that at the relevant rime for establishing
evidence of intention to make a gift is the time of the transfer and once this is
shown, a donor cannot subsequently change his mind and withdraw this intention
 Stanley v Kieran [2007]
 Facts:
 Plaintiff sought a declaration that the was the beneficial owner of certain
property which was as 'a matter of convenience' had been acquired in the
first defendant's name
 Held:
 In the High Court Laffoy J accepted that evidence of the fact that the plaintiff
had provided the purchase money on its own would tend to give rise to a
presumption of a resulting trust.
 However, she concluded that as a matter of probability the plaintiff
intended to benefit the defendant
 IN the Supreme Court Denham J stated that on the facts the presumption of a
resulting trust in favour of the appellant arose and that the respondent had
not discharged the burden of rebutting this presumption.
 In her view the inferences drawn in the High Court that the appellant
intended to benefit the respondent were contrary to the evidence.
 Denham J stated that she would not accord weight to the inferences
drawn by the High Court and in her view these inferences did not
discharge the onus or displace the presumption.
 Thus, Denham J concluded in allowing the appeal that she was satisfied
that the property was held on a resulting trust for the appellant.
o Where Fraud or Illegality Exists
 Where a trust is created for an illegal purpose, a resulting trust in favour of the settlor
will not arise unless there is a failure to carry out this illegal purpose
 Patel v Mirza [2015]
 Court of Appeal decision that the reason for a party's withdrawal from an illegal
arrangement is irrelevant and that he is not required to be genuinely repentant
about entering into the agreement.
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 So, in that case where a party had withdrawn from an illegal agreement
because it could no longer be performed did not prevent him from relying on
it to recover his property
Tinsley v Milligan [1994]
 Facts:
 Two women purchased a house in the plaintiff's sole name but on the
understanding that they would be the joint beneficial owners of the property
in order to assist in the perpetration of a fraud on the Department of Social
Security. When the parties quarrelled, the defendant disclosed the fraud to
the department and the plaintiff moved out and brought proceedings against
the defendant claiming possession and sole ownership of the property. The
defendant counter-claimed and sought declaration that the property was
held on trust for the parties in equal shares
 Held:
 The majority of the House of Lords held that a party to an illegality can
recover by virtue of a legal or equitable interest in property provided that he
can establish his title without relying on his own illegality
 In these circumstances, it was held that the defendant had establishes a
presumption of resulting trust by showing that she had contributed to
the price of the house and that there was a common understanding
between the parties that they owned it jointly
The Presumption of Advancement
o The presumption of advancement arises where because of the relationship which exists
between the parties, the donor or purchaser is under an obligation recognised in equity to
provide for the person to whom the property is given
 Just as a presumption of a resulting trust can be rebutted so to can the presumption of
advancement be rebutted by evidence which establishes that the donor did not intend
to benefit or make provision for the donee
o The manner in which these presumptions operate was summarised by Viscount Simonds in
Shephard v Cartwright [1955]:
 ‘The law is clear that on the one hand where a man purchases shares and they are
registered in the name of a stranger there is a resulting trust in favour of the
purchaser; on the other hand, if they are registered in the name of a child or one to
whom the purchaser then stood in loco parentis, there is no such resulting trust, but a
presumption of advancement. Equally it is clear that the presumption [of
advancement] may be rebutted but should not … give way to slight circumstances.’
o Husband and Wife
 The presumption of advancement arises where a husband transfers property to his
wife or purchases it in her name
 However, traditionally where a wife transfers property to her husband, this did
not give rise to a presumption of advancement but rather a resulting trust is
presumed instead
 Parkes v Parkes [1890]
 Facts:
 The defendant husband wanted to but land and arranged for it to be
conveyed in his wife's name to obviate the need for Land Commission
consent, which would have been necessary if he had purchased the property
in his own name as he was not an Irish citizen. After the parties divorced the
husband resisted an inhibition on the land and the wife instituted
proceedings, claimed that the land had been wrongly registered. The
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husband counter claimed that he was entitled to beneficial ownership in the
property. It was claimed on behalf of the wife that the husband should not be
allowed to obtain relief in equity 'by setting up his own illegality or fraud.'
 Held:
 One might have assumed a resulting trust in favour of the husband as it was
him that paid for the house. However, he came up against the presumption
of advancement. The husband could not rebut the presumption of
advancement which existed his wife's favour because to do so he would have
had to rely on his own illegality.
 The defendants in Tinsley and Parkes had the same problem- that the property in
question had been conveyed in the name of their partner for tax evasion reasons.
However, due to the nature of their relationships (Parkes was married to his wife and
Milligan was not married to her partner) the two cases had very different outcomes.
This has received a great deal of criticism.
 R.F v M.F. [1995]
 Facts:
 Concerns a dispute about ownership of property purchased by a husband in
the parties' joint names. The evidence established that the wife had refused
to live in the house unless it was in their joint names and despite her promise
to live there she had never done so
 Held:
 Henchy J appeared to accept the relevance of the presumption of
advancement but went on to hold that it had clearly been rebutted in the
circumstances of the case
Father and Child
 Where a father purchases property in the name of his child or transfers it into the
child's name, the presumption of advancement will apply
 Hepworth v Hepworth (1870)
 It was held that the voluntary transfer of stocks into his son's name by a father
operated as an absolute gift to the son
 Dowling [1996] suggests that the distinctions between father and mother should be
abandoned, a view shared by Carolan (2008) who points out that this change may also
be constitutionally necessary in this jurisdiction.
 Argument based on Canadian case saying that the presumption should apply
equally to fathers and mothers
Persons in Loco Parentis to a Child
 The presumption also applies where the donor or purchaser of property stands in loco
parentis to the person in whose name this property is held or bought
 Bennet v Bennet (1879)
 Jessel MR:
 "nothing is better established then this, that as regards a child, a person not
the father of the child may put himself in the position of one in loco parentis
to the child and so incur the obligation to make a provision for the child"
 But you must prove that the person in loco parentis took the obligation upon himself
Does the Presumption Apply in Other Circumstances?
 The position in relation to gifts made by a mother to her child is still not settled in this
jurisdiction
 Elsewhere in the common law world the general trend is towards recognising that
relationship giving rise to the presumption of advancement
Rebutting the Presumption of Advancement
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
There has been an erosion of judicial confidence in the concept of the presumption of
advancement due in part to the rather anomalous results which it may produce and to
significant constitutional developments in the area of equality. In circumstances where
the presumption has traditionally been held to exist, it has generally become easier to
rebut.
 In addition to this general development, it is still important to note the
circumstances in which the presumption has traditionally been rebutted
Evidence that no Gift was Intended
 The Presumption of advancement will be rebutted if evidence is adduced to show
that no gift was intended by the donor or transferor
 R.F. v M.F. [1995]
 Henchy J:
 "If the circumstances show that the benefit contended for by the wife
was not intended, the court will hold the presumption of advancement
to be rebutted."
 Anson v Anson [1953]
 Facts:
 A husband guaranteed his wife's bank account and was obliged to pay a
sum of money to the bank on foot of this guarantee
 Held:
 It was held that the husband could recover this amount from the wife
and that there was no presumption of advancement in a transaction of
this nature
Trusts of Family Property
 Introduction
o The circumstances which give rise to a resulting trust when property is voluntarily conveyed
into the name of another or where it is purchased in another party’s name have been
outlined above.
 A common application of these principles occurs in relation to the question of
ownership of family property when recourse to equitable principles is still necessary in
the context of property disputes involving spouses, civil partners, cohabitees and other
third parties, often financial institutions.
o While the enactment of legislation in the form of the Family Law Act 1995, the Family Law
(Divorce) Act 1996 and the Civil Partnership and Certain Rights and Obligations of
Cohabitants Act 2010 has considerably reduced the circumstances in which resulting and
constructive trusts continue to play a role in this field, they nevertheless remain significant
in some situations

The Operation of Equitable Principles in Ireland
o Direct Contributions
 Where property is purchased in one spouse or partner's name, but the other party has
made direct contributions to the purchase price or the payment of instalments on the
mortgage, the property will be held on a resulting trust to the extent of these
contributions in the absence of any agreement to the contrary
 C v C [1976]
 Facts:
 The spouses purchased a family home in the husband's sole name although
the wife made a direct contribution to the purchase price by paying the
deposit and some of the mortgage repayments. When the parties' marriage
broke down, the wife made an application pursuant to s 12 of the Married
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Women's Status Act 1957 claiming that she was entitled to half the beneficial
interest in the house
 Held:
 Kenny J said that the correct approach was to apply the concept of a trust to
the legal relationship that arises when a wife makes payments towards the
purchase of a house or the repayment of mortgage instalments when the
house is in the sole name of the husband
 When this is done, the husband then becomes a trustee for her of a
share in the house proportionate to the size of her contributions.
 W v W [1981]
 Finlay P.
 "Where a wife contributes [either directly to the repayment of a mortgage or]
to a general family fund thus releasing her husband from an obligation which
he otherwise would have permitting him to discharge liabilities out of that
fund and permitting him to repay mortgage instalments, she will in the
absence of proof of an inconsistent agreement or arrangement be entitled to
an equitable share in the property which had been mortgaged and in respect
of which the mortgage was redeemed approximately proportionate to her
contribution to the mortgage repayments, to the value of the mortgage thus
redeemed and to the total value of the property at the relevant time."
 McC. V McC [1986]
 Position of C v C and W v W was confirmed in the Supreme Court by Henchy J
 Hickey v O’Dwyer [2006]
 Facts:
 Husband and wife, but husband had child from another relationship. Wife
had contributed to a house that was in her husband’s name, she try to argue
for the interest in the house after his death.
 As the decision of Laffoy J illustrates, evidence of an agreement to the effect that
no beneficial interest should arise may be found and a spouse or partner may
acquire no such interest as a result even where she has made financial
contributions.
Indirect Contributions
 The issue of whether contributions of an indirect nature, either to the purchase price
of the property or to the mortgage repayments, can give rise to a beneficial interest is
one which was the subject matter of considerable uncertainty for a time but now
appears to be fairly settled
 M.G v R.D (1980)
 Facts:
 The family home had been purchased in the sole name of the husband and all
mortgage repayments and other expenses directly referable to the house
were paid by him. The wife used her salary to purchases items for the house
and a car which was used by both parties
 Held:
 Keane J could find no evidence of an agreement of any kind that these
outgoing should give her an interest in the property
 He concluded that there must be evidence of a common intention that
indirect contributions will give the contributor a share in the beneficial
interest in property before the court could make such an order
 IN the circumstances of the case he dismissed the claim
 W v W [1981]
 Facts:
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 The wife claimed a beneficial interest in the family farm on the basis of the
fact that the mortgages to which the property was subject had been paid off
partly as a result of her contributions and she had also contributed to the
carrying out of improvements on the property
 Held:
 Finlay P directed an issue to be tried as to the extent to which the wife had
contributed to the repayments of the mortgages but rejected a claim to
equitable interest relating to improvements to which she had contributed
after the property had been acquired
 This approach of assuming that the wife should be entitled to a beneficial interest
proportionate to the extent of her indirect contributions ‘in the absence of proof of an
inconsistent agreement or arrangement’ was also applied by the Supreme Court in
McC. v McC. [1986].
 Series of houses were bought, she had contributed over the years to general
outgoings
Improvements to Property
 W v W [1981]
 Finlay P stated that where a wife expends monies or carries out work in the
improvement of a property, the legal ownership of which is vested solely in the
husband, she will have no claim in relation to this contribution unless she can
establish that it was specifically agreed or that she was led to believe by virtue of
the surrounding circumstances that she would be recompensed for it. In addition,
he stressed that any claim which she might have was limited to a right to
monetary compensation and could not give rise to any beneficial interest.
 N.A.D v T.D. [1985]
 Barron J applied the dictum of W. v W. in a case which shows the limitations of the
device of the resulting trust in circumstances where a house is built on land which
is solely the property of one partner
 Despite the fact the wife contributed over 1/3 of the building costs of the
family home, it was held that she was not entitled to a beneficial interest in
the property
 E.N. v R.N. [1992]
 A slightly less restrictive attitude was adopted by Finlay CJ when he said ‘I do not
consider ... that a direct contribution, even in money's worth, to an improvement
made on a family home by a wife, where the husband is the sole owner of it, can,
in the absence of express or readily implied agreement, constitute a claim for a
beneficial interest in it.
 However, it should be noted that in C.F. v J.D.F. [2005] McGuinness J, referring to McC.
v McC. and N.A.D. v T.D. stated that ‘the making of improvements to property cannot
establish any form of beneficial title’.
Other Forms of Contribution
 Traditionally, the courts in this jurisdiction refused to accept that a partner's
contribution by working in the home, whether performing housework or looking after
the children, may give rise to a beneficial interest
 B.L v M.L [1992]
 Facts:
 The plaintiff wife had made no direct contributions to the purchase of the
family home and her only indirect contribution was to its refurbishment and
redecoration, However, she spent most of her time running the household
and looking after the children of the marriage
 Held:
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 Barr J said that it was well settled that a wife's work in the home and in the
care of her children did not amount to an indirect contribution entitling her
to a beneficial interest in the family home, nor the work done by her in the
maintenance or enhancement of the property
 Finlay CJ concluded that to allow the courts to extend the circumstances in
which a wife may claim a beneficial interest in the family home to a situation
where she has made no direct or indirect financial contribution to the
acquisition of the property or to a family fund but has performed the
constitutionally preferred role of wife and mother in the home would not be
to develop any principle known to the common law but rather would involve
the creation of an entirely new right. As he said unless this result was
 "clearly and unambiguously warranted by the Constitution or made
necessary for the protection of a specified or unspecified right under it, it
must constitute legislation and be a usurpation by the courts of the
function of the legislature"
 IN these circumstances it was held that the wife was entitled to a 50%
beneficial interest in the family homes and its contents
E.N v R.N. [1990]
 Barron J said that while he could see the equity in recognising the contribution
made by the plaintiff towards the welfare of the family, he did not see Art 41.2.2
as supporting her claim to a share in the family home and said that in so dar as
that provision might be construed as a guarantee of financial reward to mothers
working in the home, it seemed to him that it be construed as 'a guarantee of
reward from outside the family rather than a re-distribution within the family'
Mee has commented [1993] that it is difficult to justify an approach which
differentiates between unpaid work in the home which will not give rise to an interest
and unpaid work in the legal owner's business which may be recognised
The potential of the constructive trust as a device which will provide a remedy where
'justice and good conscience' demand it was explored by Barron J in Murray v. Murray
[1996] where he stated: 'It is I think quite clear that the law will impose a constructive
trust in all circumstances where it would be unjust and unconscionable not to do so.'
The Position in England - the Common Intention Constructive Trust
o Background to the Position in England
 The principle of proportionate interest which derives from the rationale behind the
resulting trust applies in this jurisdiction and has ensured a degree of consistency in
decision-making although perhaps at the expense of an element of flexibility which
might be preferable in certain circumstances. In England, the resulting trust analysis
has largely been rejected in favour of an approach which involves the imposition of a
constructive trust based on the parties’ common intentions, and a claimant’s share will
be measured by reference to such intentions and may give rise to a share in excess of
the actual financial contributions made.
 Lloyds Bank plc v Rosset [1993]
 It seemed clear from the House of Lords decision in this case that difficulties
would arise where contributions of a purely indirect nature were relied upon to
find a claim in circumstances where there was no evidence of an agreement to
share the property
 Lord Bridge stated that the fundamental question was whether, independently of
any inference which might be drawn from the parties’ conduct, there had been at
any time prior to the acquisition of the house, or exceptionally at a later date, any
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agreement, arrangement or understanding reached between them that the
property was to be shared beneficially.
 Alternatively, where there was no evidence to support a finding of an
agreement or arrangement to share the property, Lord Bridge stated that the
court must rely on the conduct of the parties and he said
 "direct contributions to the purchase price by the partner who is not the legal
owner, whether initially or by payment of mortgage instalments, will readily
justify the inference necessary to the creation of a constructive trust"
 In determining quantum if a common intention constructive trust can be said to arise,
in Midland Bank plc v Cooke [1995] the Court of Appeal took into account ‘the whole
course of dealing between the parties’
 Oxley v Hiscock [2004]
 The two categories in Lloyds Bank were labelled as being based on express
common intention where the parties have reached an agreement or
understanding that the beneficial ownership in the property will be share, and on
implied common intention, where this is founded on a direct financial contribution
to the purchase
 IN cases such as Midland Bank plc v Cooke [1995] and Oxley v Hiscock, a direct financial
contribution triggered consideration of 'the whole course of dealing' between the
parties, and contributions of an indirect nature were taken into account by the court in
assessing what it considered to be fair terms of the respective beneficial interest
 However, in the absence of evidence of an agreement as to the proportions in
which the respective beneficial interest should be held, it will be based on what
the court considers fair having regard to all the dealings between the parties in
relation to the property
The Current Approach
 In relation to the question of what circumstances may a common intention constrictive
trust arise, Baroness Hale made clear in Stack v Dowden [2007] that the onus lies on
the person seeking to establish the beneficial ownership in property is different from
the legal ownership
 In relation to property which is jointly owned, as Lord Neuberger pointed out in Stack v
Dowden
 "in the absence of any relevant evidence other than the fact that the property…
acquired as a home for the legal co-owners is in joint names, the beneficial
ownership will also be join, so that it is held in equal shares"
 This is called the 'default option'
 Baroness Hale made it clear in Stack at that cases in which joint legal owners are
to be taken to have intended that their beneficial interests should be different
from their legal interests will be very unusual
 However, in both Stack v Dowden and Jones v Kernott a different apportionment of the
beneficial interest was recognised.
 In Stack the House of Lords agreed with the finding of the Court of Appeal that the
proceeds of the sale property should be divided 65% and 35% in the defendant's
favour
 In Jones the Supreme Court allowed the appeal and restored the order of the trial
judge that the claimant was entitled to 90% beneficial share.
 Jones v Kernott [2012]
 Lord Walker and Baroness Hale clarified that the search was primarily to ascertain
the parties' actual shared intentions, whether expressed or to be inferred from
their conduct. However, where it was clear that the beneficial interests are to be
shared, but it is impossible to divine a common intention as to the proportions in
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
which they are to be shared, the court might be driven to impute an intention to
the parties which they may never have had.
 Mee [2012] suggests that ‘[t]he decision appears to limit the imputation of openly
fictional common intentions to the relatively uncontroversial context of
quantifying the parties' shares under a constructive trust in cases where a
common intention has been found to exist which does not specify precisely the
respective shares.’
Marr v Collie [2017]
 Lord Kerr JSC expressed the view that the principle that ‘the starting point where
there is joint legal ownership is joint beneficial ownership’ (Stack v Dowden per
Baroness Hale) should not be confined exclusively to the domestic setting and
stated that ‘there is no reason to doubt its possible applicability to property
purchased by a couple in an enterprise reflecting their joint commercial, as well as
their personal, commitment.’
3.5.3 Academic Commentary
Capper, ‘Survivorship Rights in Joint Deposit Accounts’, (1996) 47 NILQ 281
 The phenomenon of a depositor placing money in a bank deposit account in the joint names of
him and another has troubled the courts in Ireland for well over a century
o The reasons for making this deposit usually owe something to the depositor’s wish to benefit
the other person on his death
 This is advantageous as it can prevent the depositor making a will at all, and can allow
the him to avoid taxes on his estate, and he retains the right to make withdrawals from
the account
 Recent Irish cases
o AIB Finance ltd v Sligo County Council [1995]
 Facts:
 The deceased depositor placed the sum of £25,000on joint depositor in the names
of himself and the local council to be used for urban renewals. Only the depositor
was authorised to make withdrawals from the account during his lifetime and the
council was entitled to receive only the balance after his death. After his death both
his executor and the council laid claim to the balance
 Held:
 Morris J found for the executor on the basis that the council had no interest in the
account during the depositor’s lifetime and their entitlement to succeed to the
balance was void as a nuncupative will
o Lynch v Burke [1996]
 O’Hanlon J found for the executor, he held that he was bound by Owens v Greene to
gold that the aunt’s absolute control over the account during her lifetime meant that the
niece had no interest in it until after the aunt’s death, and that her right of succession
was void as a nuncupative will.
 On appeal the Supreme Court overruled Owens v Greene and decided that the absolute
control by the depositor during her lifetime did not prevent the niece taking the balance
by survivorship
 The Nuncupative Will Theory
o This theory owes its origins to the decision in Owens v Greene
 In overturning the decision of Owens in Lynch the Supreme Court were much persuaded
by the High Court of Australia decision in Russel v Scott
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 “At law, of course, it was joint property which would accrue to the survivor. In
equity, the deceased was entitled in her lifetime to deal with the contractual rights
conferred by the chose in action as to destroy all its value, namely, by withdrawing
all the money at credit. But the elastic or flexible conceptions of equitable
proprietary rights or interests do not require that, because this is so, the joint
owner of the chose in action should in respect of the legal right vested in him be
treated as a trustee to the entire extent of every possible kind of beneficial interest
or enjoyment… In the contingency of his surviving the donor and of the account
then containing money, his legal interest was allowed to take effect unfettered by a
trust…”
 This was accepted and approved in Lynch
 This decision in Lynch is welcome, it brings Ireland in line with other common law
jurisdictions and gives effect to the intentions and expectations of the parties
 There is no policy objection to the right of survivorship
 Death duties and other inheritance taxes have usually be avoidable by timely
inter vivos transfer
 Legal principle presents no obstacle and this analysis of the joint deposit accounts
supported by the concept of the revocable trust, not is there any problem with the
Wills Act
 The Gift Theory
o It may be settled now that the survivors right of survivorship is by way of an inter vivos
disposition on the part of the depositor, but what kind of inter vivos disposition is it?
 On suggestion is by analogy to the purchasing of property by one individual in the name
of them self and another. The other person is deemed to get beneficial interest when
the presumption of a resulting trust is rebutted, and it is shown the deceased intended
to a gift in favour of the survivor
 A considerable body of case-law appears to assume the correctness of this line of
analysis
 There is a flaw with this analysis
 Opening a join deposit account is not the same as purchasing property in joint
names – in the latter the property being acquired exists independently of the
contract creating and can be conveyed, delivered or assigned into joint names
 The joint deposit account is created between the depositors and the bank,
unless the survivor is a depositor and a party to the contract he acquires no
rights in the account unless the depositor makes himself a trustee for the
survivor or validly transfer rights to them
 However, in the end there is probably too much authority supporting the view that the
opening of a joint deposit account is much the same as the acquisition of other property
in joint names for it to be rejected now
 The Contract Theory
o What is the position where the depositor and the survivor contract together with the bank
o The analysis in terms of the survivor acquiring contractual rights against the bank was only
really adopted in McEvoy v Belfast Banking Company Ltd [1935] and Lynch v Burke
 Facts:
 Deceased placed £10,000 in joint names of himself and his son. The deposit receipt
acknowledged receipt of this sum from father and son and stated that it was
payable to either or the survivor. After the father’s death his executors used the
money to pay the debts of his business, the son brought an action against the bank
seeking an account of the money which the executors exhausted
 Held:
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 Lord Atkin said that the son’s rights against the bank depended on whether he was
party to the contract with it. The father had not acted as agent for the son in
opening the account and the latter had not subsequently ratified his conduct, the
son could not sue the bank
 The other members of the House of Lords decided against the son on different
grounds but did not query Atkin’s argument
o The position seems to be that if the survivor is party to the contract with the bank the legal
title to chose vests in the depositor and the survivor. The survivor is able to show that he has
privity of the contract with the bank but does the requirement that consideration must move
from the promisee undermine the survivor’s position?
 Street suggests that consideration may be found in the survivor allowing the use of his
name, but this may be too nebulous
 Cullity suggests that consideration may exist where the survivor undertakes
responsibility for overdraft
 A better view is that the survivor need supply no separate consideration
 Assignment of Deposit Accounts
o Another way in which the depositor can grant rights in a deposit account to the survivor is if
the depositor assigns an interest in the account to the survivor
 The cases on this do not provide a clear picture on the law, so it is best to avoid this
method
 Problems may be avoided if the depositor simply withdraws a deposit in his own name
and redeposits in the names of himself and the survivor
 Conclusions
o The recent decisions of the Irish courts suggest that the subject of joint deposit accounts has
more than just academic interest
 While the destruction of the nuncupative will theory is welcomed the underlying
doctrinal principles remain very unclear
Woods, ‘Joint Deposit Accounts and the Conditional Gift Theory’, (2002) 37 Ir Jur 281
 Woods points to a number of potential flaws in the contract theory and favours the conditional
gift theory
 If each party is contributing to the account and withdrawing from it, a presumption of a
beneficial joint tenancy arises. Thus, on the death of one account holder, the others become
entitled to the money in the account under the right of survivorship
 Simple enquiries such as whether B has a legal and/or a beneficial interest in the property and
how he acquired such an interest give rise to a number of potential approaches.
o In this paper, the two main approaches taken by the courts, the contractual approach and
the conditional gift theory, are examined by considering two questions.
 Is B entitled to a legal interest?
 In whom does the beneficial interest vest?
 The Contractual Approach
o The contractual approach assumes that the opening of a joint bank account creates a
contract between A, B and the bank. B acquires a legal interest in the property under this
contract. Therefore, on A's death, B has a right to enforce the contract, which provided for
payment to the survivor
o Difficulties with this approach
 B provided no consideration and thus should not be able to enforce the contract. The
consideration for the contract with the bank was provided by A
 Where B is not party to the contract and therefore fails to acquire contractual rights
(McEvoy v Belfast Banking Company Ltd)
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

Who is entitled to the beneficial interest in the property? Does the presumption of a
resulting trust apply to vest the beneficial ownership in A, until his death, and
thereafter in A's heirs? Is there sufficient evidence to rebut the presumption so that B
takes absolutely? A clearly intended B to take the property on his death.
o According to Owens v Greene the court held that in order to rebut the presumption of a
resulting trust it was necessary to prove:
 That it was the intention of [the deceased] when putting the monies in the deposit
accounts in the Bank,
 to give the plaintiffs respectively, then and there by that act, a right, that is to say an
immediate present right to take the monies with which he associated their respective
names by survivorship (should they survive him), for their own respective use and
benefit as surviving joint beneficial owners with him.
o Thus, an interest which does not vest in possession until sometime in the future, such as a
right of survivorship, does suffice to rebut the presumption
o It is submitted that the right of survivorship is invalid and thus the intention to confer it
cannot be used as evidence to rebut the presumption of a resulting trust that arises
 The central feature of a joint tenancy is the right of survivorship or the jus accrescendi.
However, it is axiomatic that the four unities must be present before a joint tenancy
can be said to exist: unity of time, title, possession and interest
 The intention of A was to exclude B from control of the account until his death and
thus there is no unity of possession
 An intention to create a valid joint tenancy where the four unities are present would
clearly be sufficient to rebut the presumption of advancement
The Conditional Gift Theory
o The conditional gift approach avoids the rules of privity and the necessity for consideration.
 Under the conditional gift theory B acquires his interest in the property by virtue of a
gift by A subject to a condition precedent, the condition being the death of A.
Throughout his lifetime, A retains a complete power of disposition over the property
although there has been a complete gift by him in his lifetime
o The main challenge to this approach arose in Owens v. Greene when Kennedy CJ held that
such a gift would be invalid “as an attempt to make a testamentary disposition otherwise
than by will
 Lynch overruled Owens but decided the case on a contractual analysis but left open the
possibility that B could have acquired his legal interest in the property by virtue of a
'gift subject to a contingency viz. that of the death of the donor which contingency
does not disqualify it as being a proper gift'
o One objection which could be made to a gift conditional on the death of the donor is that a
gift is not truly conditional if the condition is bound to be fulfilled. However, in the context
of the donatio mortis causa it has been pointed out that these gifts are conditional not just
upon the donor's death, but upon the donee surviving the donor
o The conditional gift theory can easily be applied to the case of a joint deposit bank account.
 The effect of the arrangement is to grant B a gift subject to a condition precedent and
also expressly to vest the account in A and B as trustees to hold it for the benefit of A.
 This trust comes to an end on satisfaction of the condition and the beneficial
ownership vests in B at that point.
 The circumstances, prima facie, give rise to the presumption of a resulting trust but this
is rebutted before A's death by the express declaration of trust and after his death by
the intention to grant a gift.
 The resulting trust device is not necessary in order to vest the beneficial interest in the
account in A prior to his death as he intended to create an express trust in his own
favour.
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o
Both Capper and Montrose point out what they claim to be the main flaw with the gift
theory. They note that opening a bank account is not the same as a transfer of property into
joint names. In the latter case the legal interest passes under a deed or by delivery.
 Montrose notes that the creation of the property interest occurs upon opening a joint
account and unless B is a party to the contract with the bank (by virtue of signing it
himself or under agency principles) he acquires no interest in the account unless A
either declares himself a trustee for B or otherwise validly transfers rights to B. Putting
B's name on the deposit receipt, he argues, will not, on its own, operate to transfer a
legal interest to him under the conditional gift approach
 This argument can be countered by pointing out that the wording of the deposit
receipt can be construed as not only creating the account, but also effecting an
assignment of the account to A and B to be held on trust for A absolutely until the
condition precedent to the gift is satisfied and B becomes entitled to the beneficial
interest
Mee, ‘Jones v Kernott: Inferring and Imputing in Essex’ [2012] Conv 167
 While Jones does clarify a number of aspects of Stack v Dowden, it also raises new concerns
o References to imputed common intention in Stack had raised hopes in some observers that
English law was moving towards some great leap forward. However, Jones is no Pettkus v
Becker
o The decision appears to limit the imputation of openly fictional common intentions to the
relatively uncontroversial context of quantifying the parties' shares under a constructive trust
in cases where a common intention has been found to exist which does not specify precisely
the respective shares.
o While not signalling any radical new departure in terms of claimants' prospects, Jones also
fails to deliver in terms of doctrinal coherence
 The wrong result?
o The actual decision in the case is open to criticism on two grounds:
 The basis for the trial judge’s crucial inference appear rather to be intentions related the
planned use of the land, rather than to the question of beneficial entitlement
o There is also suspect mathematics underlying the decision
 Imputation
o The conventional view of the distinction between inference and imputation was stated by
Lord Neuberger in Stack
 “An imputed intention is one which is attributed to the parties, even though no such
actual intention can be deduced from their actions and statements, and even though
they had no such intention. Imputation involves concluding what the parties would have
intended, whereas inference involves concluding what they did intend.”
 However, Lord Walker and Lady Hale appeared to envisage the imputation of common
intention
o Lord Walker and Lady Hale say Jones as providing an opportunity to revisit Stack and to
provide some clarification
 They conceded to Lord Neuberger’s distinction
 Inference
o While all the judges in Jones appeared to accept Lord Neuberger’s statement in Stack of the
distinction between imputed and inferred common intention, differing opinion were
expressed as to the practical significance of the distinction
 Lord Walker and Lady Hale suggested that “while the conceptual difference between
inferring and imputing is clear, the difference in practice may not be so great”.
 Lord Collins accepted this point
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The version of inference favoured by Lord Walker and Lady Hale seems to involve introducing
more than one further level of “objectivity”. Instead of looking at what the claimant actually
(and reasonably) took the defendant to intend, the test seems to look at what a reasonable
person in the position of the claimant would have taken the defendant, in light of his conduct
and all the surrounding circumstances, to have intended
 Conclusion
o The future of the purchase money resulting trust seems to be in some doubt. All of this
suggests that, even after Jones, there is much more to come from the common intention
constructive trust. This does not seem an appetising prospect.
o
Mee, ‘Trusts of the Family Home: Social Change, Judicial Innovation and Legislative Reform’, (2016)
56 Ir Jur 161
 The focus on disputes over the beneficial ownership of the family home, the most important
asset owned by many families, will allow a consideration of the evolution of an aspect of the law
of resulting and constructive trusts, set against the background of relevant legislative
developments.
 The most common trigger for disputes over the beneficial ownership of the family home is the
breakdown of an intimate relationship, whether a marriage, a civil partnership, or a
cohabitation. However, the trigger could also be the death or bankruptcy of one of the parties,
or a dispute with creditors.
 Initially, disputes between married couples were the primary focus of the case law; however, the
attention of commentators and law reformers has more recently shifted to those arising in the
context of unmarried cohabitation
 It is now possible to offer some general observations prompted by the foregoing review of the
development of this area of Irish law over the last half-century.
o The first point to note is that, although relatively unsophisticated in theoretical terms, the
Irish approach is not without its virtues.
 The Irish courts have simply modified the ancient purchase money resulting trust so that
a wider range of conduct on the part of the claimant can now be regarded as
representing a contribution to the purchase price.
 While it has been pointed out above that some aspects of the modified Irish doctrine can
be criticised as socially unjust or doctrinally misguided, the Irish approach does appear
to have had the important advantage of being relatively certain
o A second observation relates to the change that has occurred, over the last 50 years, in the
background against which disputes over the family home occur.
 At the start of our period, the practice of putting the matrimonial home into the sole
name of the husband, combined with the absence of legislation allowing for the
adjustment of the property rights of spouses upon marital breakdown, created very
clear potential for injustice (of a gendered nature, given that women were normally the
ones who suffered).
 As a result, the idea became entrenched that it would be appropriate to increase the
rights of claimants to the greatest extent possible, with developments in equity being
necessary to address the unfairness to vulnerable members of society. After legislation
transformed the position in the matrimonial context, the focus of concern switched to
the position of cohabitants, who fell outside the legislative framework
 However, this is becoming less of a problem as its no longer the social norm to
unthinkingly put property in the mans name. Furthermore, there has been legislative
intervention
 This means that there is a strong argument that it would not be democratically
legitimate for our courts to take any of the radical approaches favoured in Canada,
Australia and New Zealand, which involved developing a wide-ranging judicial
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o
o
discretion to adjust property entitlements on the termination of an intimate
cohabitation
Thirdly, it is necessary to comment on the challenge to the current law presented by cases
involving joint ownership at law.
 The current equitable rules were originally developed, as has been mentioned, on the
basis of an assumption that it would not be fair to allow the defendant (generally a
husband) to insist that the legal ownership of the property should dictate the beneficial
ownership, in a context where the legal ownership tended, on the basis of a sexist social
practice, to have been put into his sole name.
 This tendency to second-guess the legal ownership leads to problems in the modern
context.
Finally, it is possible to identify a wider challenge which is hinted at by the difficulty that
arises in joint names cases.
 This is the fact that the Irish approach is founded on the purchase money resulting trust,
an ancient doctrine which assumes that the parties did not intend to give any real weight
to the legal ownership of the property being acquired
The Adequacy of Joint Deposit Accounts as Will Substitutes’ Brady (1990) 12 DULJ 155
 Deposit allows for evasion of death duties and avoidance of formalities of making a will. The lay
person of the law assumes that the remaining money will accrue to the survivor if the intention of
the deceased is clearly laid out as such.
 Brady argues that the Irish policy of discouraging joint deposit accounts as will substitutes sits
uneasily with the rationale of the resulting trust which is dais to depend on the implied intention of
the donor. Argues that O’Hanlon J was correct in viewing that the presumption of the resulting trust
was rebutted by the deceased’s intention and that it is time for the law on Owens to be reviewed.
Despite this, it appears the court will continue looking at these as contractual arrangements rather
than testamentary dispositions.
‘Explaining Resulting Trusts’ Swadling (2008) 124 LQR 72
 Swadling notes that the presumption of a resulting trust exists because equity is suspicious of gifts;
yet almost nowhere is this suspicion justified. There is a suggestion that it is to prevent the
unintended transfer of assets. There is another suggestion that it is similar to the doctrine of undue
influence, that a presumption arises that the deceased has been influenced to make this transferral.
However, Swadling notes that this is not the case, in undue influence there is a requirement for a
category of relationship where the donor conveys trust and confidence in the donee and in undue
influence proof of intention will not stop the presumption arising.
 Swadling says there needs to be a proper understanding of the presumption that arises in resulting
trusts and that there should only be one true presumption, ‘the presumption of law, where proof by
evidence of one fact generates proof of a second fact without need for evidence.’
 Concludes that while there is some explanation for what a presumed resulting trust is, the automatic
resulting trust defies legal analysis.
Carolan (2008) 26 ILT 26
 Looks at decision in Canadian case Pecore v Pecore.
o Facts: Dispute arose out of the opening of a joint bank account in name os ageing father and his
daughter. She was the child he was closest to and the only one in financial trouble. Father
controlled the account and paid income on it. Daughter was required to notify him before
making withdrawals. Also made declaration that it was not a gift to avoid capital gains tax.
Father commented to third parties that the system would take care of her husband too. After
father’s death, daughter got divorced.
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Held in favour of the daughter and conducted a radical overhaul of the Canadian law on this
issue.
o Judgment:
 Stated presumption of advancement would not equally apply to mothers and fathers.
 Carolan notes that this type of change may be constitutionally necessary, equality
between spouses is established in Art 40.m
 Held that the normal presumption of a resulting trust should apply to transfers between
elderly parents and their children. This would reflect the social practice and protect the
elderly against exploitation.
 Argues that the logic is not directly applicable to Irish law. The majority based their
conclusions on the absence of any continuing parental obligation. Their decision to
presume that a transfer from an elderly parent to an adult child was intended not as a
gift but as a means of assisting in the management of the parent’s affairs was partly
based on the fact that Canadian law obliges adult children to provide for their ageing
parents. Under the equivalent Irish statute, the reverse is true.
 Stated that the normal civil standard of the balance of probabilities should apply; no
reason to depart from this in cases of advancement.
 Stated rule expressed in RF v MF’s counterpart in Canada about statements was too
restrictive. Subsequent evidence should not automatically be excluded. In Pecore the
father’s subsequent statements to his lawyer when drafting his will were regarded as
substantial evidence as to his intention to gift the assets to his daughter.
 Concluded that control of the account was not decisive and was not inconsistent with the
intention to transfer the assets as a gift.
Carolan warns that any judicial reform of a long-standing presumption has the potential to
retrospectively alter the way in which a transaction will be treated. Such changes should not be
taken lightly. Carolan states that the issue should best be dealt with by legislation so as to avoid ‘the
twin dangers of uncertainty and retrospective effect by providing individuals with sufficient advance
notice to allow them to arrange their affairs accordingly.
o

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3.6. Constructive Trusts/ Liability of Third Parties to Account
 General Principles
o A constructive trust is one which arises by operation of law and which comes into being
irrespective of the intention of the parties. It has been described as a trust which is imposed
by equity in order to satisfy the demands of justice and good conscience.
 A distinction is drawn between institutional and remedial constructive trusts. The
former arises by operation of law on the occurrence of a certain event and the court
simply recognizes that such a trust exists whereas the latter is a remedy which may be
awarded by a judge where he considers it appropriate that a defendant should hold
property on trust for a claimant
o There can be some degree of overlap between the circumstances in which resulting and
constructive trusts can arise
 From a practical perspective it makes little difference whether a trust is described as
constructive or resulting
o A trustee or other party in a fiduciary position will not be permitted to take advantage of his
position to make a personal profit and any profit which he makes in this manner will be held
by him as a constructive trustee for the benefit of the persons equitably entitled to the
property. In addition, in this jurisdiction it has been recognised that a remedial constructive
trust may be imposed by the court in order to meet the demands of justice and good
conscience.
 Where there is no existing relationship of trustee and beneficiary or any type of
fiduciary relationship, liability to account ‘as a constructive trustee’ may arise because
of the circumstances in which the property is held. However, the phrase liability to
account ‘as a constructive trustee’ is somewhat misleading in this context and it might
be better described as an equitable liability to account as the defendant’s liability is
personal not proprietary in nature
o Obligations and liabilities imposed on a constructive trustee will not necessarily be as
extensive as those demanded of the trustee of an express trust
o It would appear that a constructive trust will take effect from the moment the conduct
giving rise to the need for its imposition occurs
 There is a distinction between institutional and remedial trusts
o This distinction is not addressed in Irish courts.
 IN the UK they don’t recognise remedial trusts.
o AN institutional constructive trust is triggered by some event.
o Remedial constructive trust is about imposing some kind of remedy after an event, a lot
more flexible.
 Not so much something that arises through operation of law
 Institutional Constructive Trusts
o Advantages of constructive trusteeship (proprietary remedy) over liability to account
(personal remedy) appears:
 Where the fiduciary is bankrupt – where a constructive trust arises, the principal will
take in priority to the general creditors
 Proprietary remedy advantageous where assets are profitability invested and increase
in value
 Also opens up the possibility of tracing remedy against an innocent volunteer which
does not depend on fault
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3.6.1. Where There is a Fiduciary Relationship
 Introduction
o A useful description of a fiduciary relationship and the key attributes of this relationship is
set out by Millet LJ in Bristol and West Building Society v Matthew [1998]
 "A fiduciary is someone who has undertaken to act for or on behalf of another in a
particular matter in circumstances which give rise to a relationship of trust and
confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The
principal is entitled to the single-minded loyalty of his fiduciary. This core liability has
several facets. A fiduciary must act in good faith; he must not make a profit out of his
trust; he must not place himself in a position where his duty and his interest may
conflict; he may not act for his own benefit or the benefit of a third person without the
informed consent of his principal. This is not intended to be an exhaustive list, but it is
sufficient to indicate the nature of fiduciary obligations. They are the defining
characteristics of the fiduciary."
 Summary:
 Must act in good faith
 Must not make a profit out of the trust
 Must avoid conflict between duty and self-interest
 Must not act without fully informed consent
 The primary feature of the fiduciary relationship is that a fiduciary 'undertakes or
agrees to act for or on behalf of the interest of another person in the exercise of a
power or discretion which will affect the interests of that other person in a legal sense'
 There is more than one type of fiduciary relationship and the each possess different
characteristics and obligations
 The Key Obligations –
o The No-Conflict and No-Profit Rules
 Avoiding a conflict between duty and self-interest has been referred to as the
'irreducible core of the fiduciary obligation'
 An aspect of the no-conflict rule is that a fiduciary should avoid placing himself in
a situation where his duty to one principal will conflict with his duty to another
principal
 The fundamental principle that a trustee or other party in a fiduciary position will not
be permitted to take advantage of his position to make a personal profit was laid down
in the following terms in this jurisdiction in Gabbet v Lawder (1883)
 Chatterton VC - "The fundamental position upon which the doctrine of
constructive trusts proceeds is, that no person in a fiduciary capacity shall be
allowed to retain any advantage gained by him in his character as trustee. His
cestuis que trusts (beneficiaries) are entitled to the benefit of any advantage so
gained by him, to any addition or accretion to the trust estate which he may have
acquired, and to all profit which he may have made by any dealing with it."
 Charleton J explained that the ‘fundamental position’ referred to by Chatterton VC
in Gabbett v Lawder applies strictly to trustees and personal representatives.in the
following terms in Greene v Coady [2015]
 ‘Since trusts deal with other people’s property and since trustees must be
faithful to deal properly with trust funds, trustees owe to the trust, and thus
to the beneficiaries, a duty of good faith and fidelity. Trustees are not entitled
to put themselves into a situation of conflict of interest whereby they may be
influenced by how they themselves may profit from any decision which the
body of trustees may make.’
o Fully Informed Consent
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o
o
o
Where fully informed consent has been given to a transaction, a fiduciary’s actions are
regarded as authorised and he will not be liable to account.
 Boardman v Phipps [1967]
 Lord Hodson stated that nothing short of 'fully informed consent' could aid a
fiduciary who had taken advantage of the opportunity provided by the position to
make a profit
 Greene v Coady [2014]
 Facts:
 A trustee held the lease of a market in a trust. He tried to get a renewal of the
lease for the benefit of the trust, but the landlord would not renew the lease.
Having tried his best, he took the renewal in his own name – this was not
allowed lease could only be in the beneficiary’s name
 Held:
 Charleton J said that that it is clear that a trustee may proceed to act in a
situation where there is a potential conflict between duties or between duty
and interest, provided fully informed consent is given by the principals
 He added that '[t]his does not require the disclosure of all information which
is material to the transaction and the conflict, provided that the consenting
party is aware of all material facts and is enabled to make a decision to retain
the trustees notwithstanding"
 The question of whether a trustee or other person in a fiduciary position may purchase
the reversion of a lease held in trust or for his principal for his own benefit has been
the subject of some controversy.
 Traditionally, the rule in Keech v Sandford was applied in a limited way to such a
purchase and a constructive trust would arise if the lease was renewable by
contract or custom or where the trustee obtained the reversion by virtue of his
position as lessee.
 This principle was applied by the Irish Court of Appeal in Gabbett v Lawder (1883)
where the administrator of the estate of an intestate held lands under a lease as
trustee.
Strict Application of the Rules
 Both the no-conflict and no-profit rules are strictly applied
 A fiduciary may be held liable to account for profits made as a result of his
fiduciary position even where he has been acting in good faith and where the
principal would also not have benefitted without the fiduciary's actions
Commercial Relationships
 As Virgo commented '[t]he identification of fiduciary duties, especially in a commercial
context, can have profound consequences on the risks inherent in such relationships,
since the characterisation of the defendant as a fiduciary will often mean that he or she
bears the risk of things going wrong'
 Certainly, in England and Australia there have been signs of a reluctance on the part of
the judiciary to extend the application of fiduciary obligations beyond their recognised
categories more broadly to commercial relationships
Liability for Breach of Fiduciary Duty
 Summary of the extent of a fiduciary's obligation to account – Conaglen
 "It is well-settled that a fiduciary must account for profits that have been
generated from his fiduciary position or in circumstances involving a conflict
between the fiduciary's duty and his interest. The fiduciary need not account if the
profit or conflict was properly authorised, in which case there was no breach of
fiduciary duty. Nut in the absence of such authorisation, the fiduciary must
account for all of the profit that has been made in breach of fiduciary duty, other
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than insofar as the court grants an equitable allowance to the fiduciary for work
done in generating the profit"

The Fiduciary Position of Trustees
o Not all duties of a trustee are fiduciary in nature, but express trustees are regarded as being
in a fiduciary relationship with the beneficiaries they ow fiduciary duties
o Renewal of a lease
 A common situation which will give rise to the creation of a constructive trust is where
a trustee of a leasehold property obtains a renewal of the lease in his own name
 Keech v Sandford (1976)
 Facts:
 A trustee held a lease of the profits of Romford Market on trust for an infant.
Before the expiration of the lease he applied for a renewal for the infant's
benefit, but the lessor refused to renew on the grounds that the infant could
not enter into the usual covenants. The lessor indicated that he would be
willing to give the trustee the lease instead and the latter accepted the
renewal in his own name.
 Held:
 It was held despite the trustee's attempt to obtain a renewal for the infant's
benefit, he must be regarded as holding the lease for the latter's benefit and
was obliged to pay over to the infant the profits which he had received
 The precise principle as outlined in Gabbet v Lawder (1883)
 Chatterton VC - "It has long been settled by current authorities that a trustee of a
leasehold interest who obtains a renewal of a lease, whether by covenant or
custom, or by the voluntary act of the reversioner, comes within this principle,
and that he cannot hold the interest he so acquired for his own benefit, but as a
constructive trustee of it for his cetuis que trusts."
o Competition with Trust Business
 A fundamental principle exists which prevents a trustee or another party in a fiduciary
position from taking advantage of his position to make a personal profit and he will be
required to hold any profit which he makes in this manner in a constructive trust for
the benefit of the person equitably entitled to the property
 In addition, a trustee must not place himself in a situation where his duty to the trust
and his own personal interest may conflict
 One obvious situation which will give rise to concern is where a trustee derives
profit from a business which is in competition with any business carried on by the
trust
 Moore v McGlynn [1894]
 Facts:
 The testator, who was a shopkeeper and postmaster, bequeathed all his
property to his brother and son to be held and managed by them for the
benefit of his wife and children, and he directed that his brother be entitled
to a salary for managing the business. Subsequently, the brother set up his
own business in the same town and opened the post office there
 The question to be determined by the courts was whether a trust could be
imposed for the benefit of the testator’s estate in relation to the new
premises and business carried out by the testator's brother
 Held:
 Chatterton VC rejected this argument:
 "I am not prepared to hold that a trustee is guilty of a breach of trust in
setting up for himself in a similar line of business in the neighbourhood,
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provided that he does not resort to deception, or solicitation of custom
from persons dealing at the old shop"
 But added,
 "‘[h]e should not be continued in a position where his duties and his selfinterest may conflict"

Other Types of Fiduciary Relationships
o As noted above there is more than one type of fiduciary relationship
o The Liability of a Fiduciary to Account for Secret Commissions and Bribes
 As a general principle, a fiduciary may not accept secret commissions or bribes arising
out of a transaction in which he is acting on behalf of a principal without the
knowledge and consent of his principal
 Attorney General for Hong Kong v Reid [1994]
 Facts:
 An application to renew the caveats lodged against the titles to properties
bought by the first named respondent with bribes which he had accepted in
breach of his fiduciary duty was refused by the Court of Appeal of New
Zealand but allowed on appeal by the Privy Council
 Held:
 It was held that when a bribe is accepted by a fiduciary in breach of his duty
he golds it on a constructive trust for the person for whom that duty is owed
 Lord Templeman
 "The rule must be that property which a trustee obtains by use of
knowledge acquired as trustee becomes trust property. The rule must, a
fortiori, apply to a bribe accepted by a trustee for a guilty criminal
purpose which injures the cestui que trust. The trustee is only one
example of a fiduciary and the same rule applies to all other fiduciaries
who accept bribes."
 Added that if the property representing the bribe decreases in value the
fiduciary must pay the difference between that value and the initial value of
the bribe. If the value increases, the fiduciary is not entitled to any surplus
because he is not allowed to make a profit out of a breach of duty
 The decision was welcomed in some quarters, but it was argued that while it may
be reasonable that a fiduciary should not profit from a breach of duty even if this
means the principal receives a windfall, it is not so obvious that a windfall is
justified where the contest is between creditors who have given and value and a
principal who has not
 Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd [2012]
 Facts:
 A director had made a secret profit on the sale of shares in a company in
circumstances where he had breached fiduciary duty by entering into
fraudulent transactions
 The question was whether he was personally accountable only
 Held:
 The fiduciary was insolvent and the contest as between the principal and the
fiduciary's creditors, the Court of Appeal declined to follow Attorney General
for Hong-Kong v Reid and held that the beneficiary of a fiduciary's claim could
not claim a proprietary interest and was limited to a personal claim in equity
 FHR European Ventures LLP v Cedar Capital Partners LLC [2015]
 Facts:
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 The claimants sought recovery of a sum of €10 million which is was alleged
had been paid as commission pursuant to an exclusive brokerage agreement
made between the second defendant and the vendor of a hotel, whereby the
defendant agreed to act as a facilitator in relation to the sale of the hotel by
introducing prospective purchasers, and to disclose its appointment to such
purchasers. Following the sale of the hotel to the claimants, the second
defendant was paid the commission.
 The claimants asserted that this sum was a secret profit received by the
defendants in breach of their fiduciary duty to the claimants
 Held:
 At first instance it was held that the second defendant was liable to account
for the sum of the commission but declined to grant the claimants a
declaration that they were entitled to a proprietary remedy against the
second defendant
 The Court of Appeal allowed the claimants' appeal and varied the order,
granting a declaration that the second defendant had received the
commission on constructive trust for the claimants. The Supreme Court
rejected the second defendants appeal
 Lord Neuberger stated where an agent acquired a benefit which came to
his notice as a result of his fiduciary position, or through an opportunity
resulting from that position, the general equitable rule was that he was
to be treated as having acquired the benefit on behalf of his principal, so
that the benefit was owned by the principal who had a proprietary as
well as personal remedy against the agent
o
The Position of Agents
 FHR European Ventures LLP v Cedar Capital Partners LLC [2015]
 Lord Neuberger PSC noted "The position adopted by the respondents, namely that
the rule applies to all unauthorised benefits which an agent receives, is consistent
with the fundamental principles of the law of agency. The agent owes a duty of
undivided loyalty to the principal, unless the latter has given his informed consent
to some less demanding standard of duty. The principal is thus entitled to the
entire benefit of the agent's acts in the course of his agency. This principle is
wholly unaffected by the fact that the agent may have exceeded his authority"
 Where an agent puts himself in a position where his duty to his principal and his own
interests may conflict and makes a profit out of his fiduciary position, he will be liable
to account for this
 Sherrard v Barron [1923]
 Moore LJ - "There is no dispute about the law, which is that an agent cannot
without the knowledge of his principal make any profit for himself out of services
rendered to his principal. Should he do so, he must account. It is equally settled
law that it is the duty of the agent to make the fullest disclosure to his principal of
all transactions in which the agent is making, directly or indirectly, a profit out of
his principal. If this is done and the principal, expressly or by course of conduct,
impliedly assents, the agent can retain his profit."
 The best illustration of the rigour with which these principles are applied is Boardman v
Phipps [1962]
 Facts:
 Assets were held on trust for the benefit of a testator's children, the trustees
being his widow, who was senile, his daughter, and his account. The trust had
a sizable minority holding in a textile company and with the consent of the
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two active trustees, Boardman, the trustee's solicitor, and one of the
beneficiaries set about acquiring a majority shareholding in the company in
order to make it more profitable. By purporting to act on behalf of the trust
they obtained detailed information about the company and succeeded in
gaining control of it, making a considerable profit as a result
 Held:
 The House of Lords held that Boardman and the beneficiary were liable to
account to the trust for the profits which they had made, although it was held
that they were entitled to payment for the work that they carried out
 The majority view was that the defendants had placed themselves in a
position in which their duty and self-interest might conflict and had
abused their fiduciary position by utilizing information acquired in a
fiduciary capacity.
 It was agreed that information could be characterised as trust property
o
The Position of Company Directors
 Company Directors are treated as being fiduciaries in so far as they owe a duty to their
company and they will not be permitted to place themselves in a position where their
duty to the company and their personal interests will conflict or to derive profit from
their fiduciary relationship
 Even where a director has acted in an honest and bona fide manner in what he
believes are the best interests of the company, he will nevertheless be liable to
account for any personal profit made as a result of his fiduciary relationship
 Regal (Hastings) Ltd. V Gulliver [1967]
 Facts:
 A company which owned a cinema formed a subsidiary to take up the lease of
two additional cinemas so that they might all be sold as a going concern, The
landlord insisted on the subsidiary company having paid up share capital of
5,000 ordinary £1 shares and as the parent company had insufficient
resources to subscribe for more than 2,000, the directors if the company
agreed to take up the remainder. When the business was transferred to new
controllers the directors made a personal profit on the transaction.
 The purchaser successfully brought an action in the company's name to
account for this profit on the grounds that the directors derived such profit
by virtue of their office
 Held:
 Lord Russell stated:
 ’The rule of equity which insists on those, who by use of a fiduciary
position make a profit, being liable to account for that profit, in no way
depends on fraud, or absence of bona fides; or upon such questions or
considerations as whether the profit would or should otherwise have
gone to the plaintiff, or whether the profiteer was under a duty to obtain
the source of the profit for the plaintiff, or whether he took a risk or
acted as he did for the benefit of the plaintiff, or whether the plaintiff
has in fact been damaged or benefited by his action. The liability arises
from the mere fact of a profit having, in the stated circumstances been
made. The profiteer, however honest and well intentioned, cannot
escape the risk of being called upon to account.’
 The decision seems unfair as the company would not have obtained the
benefit of the transactions without the actions of the directors
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


 Jones has commented that while the policy issues in Regal Hastings were finely
balanced, the unquestioning adherence to the inexorable rule of equity by the
House of Lords meant that these factors were never properly weighted against
each other
Liability will also be imposed where the company itself was not in a position to take on
a contract secured by a director where he takes advantage of his fiduciary position to
achieve this.
Industrial Development Consultants v Cooley [1972]
 Facts:
 Came by info as role of the director, gas bill had big job but didn’t want to
eploy a company they wanted to employ an individual. When he took up the
job, pretending he was ill to take leave from the company to do this job
 Held:
 Roskill J stated: 'if the defendant is not required to account he will have made
a large profit, as a result of having deliberately put himself into a position in
which his duty to the plaintiffs who were employing him, and his personal
interests conflicted'.
CMS Dolphin Ltd v Simonet [2001]
 Facts:
 The first defendant, who as the director of an advertising agency, resigned
and set up a new business, recruiting all the agency's staff which resulted in
its principal clients also switching their business to his new venture
 Held:
 Liability to account was imposed
 Lawrence Collins J acknowledged that a director is not precluded following his
resignation from a company from using his general fund of skill and
knowledge or his personal connections, he also made it clear that where he
exploits a maturing business opportunity liability will be imposed
3.6.2. Mutual Wills
 Prerequisites for the Imposition of a Constructive Trust
o Where two people, usually although not necessarily husband and wife, make an
arrangement concerning the disposal of their property and execute mutual wills which are
intended to be irrevocable and the survivor subsequently alters his will, his estate will be
held by his personal representatives on a constructive trust to give effect to the
arrangement provided for in the mutual wills.
o In determining whether the necessary agreement exists, the court will have regard to the
terms of the wills but may also infer evidence of an agreement from the conduct of the
parties and the surrounding circumstances.
 The mere fact that the wills were made simultaneously and in substantially similar
terms is not of itself sufficient proof that the parties have entered into a legally binding
agreement not to revoke them
 Re Cleaver [1981]
 Facts:
 A husband and wife made similar wills at the same time and subsequently
altered them in the same manner.
 Held:
 It was held that the trusts set out in these wills would be enforced rather
than those set out by the survivor, the wife, in a will made subsequent to her
husband's death
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

 Nourse J was satisfied that there was sufficient evidence of an agreement
shown by the similarity of the provisions and the fact that the changes were
made simultaneously
Re Goodchild [1996]
 Distinguished Cleaver and the importance of having specific evidence as to the
testator's mutual intentions at the same time of the execution of the will was
stressed
 Facts:
 The testator and his wife both simultaneously executed wills in identical
terms leaving their estates to each other and after their deaths their first
named plaintiff, their only son. After his wife's death, the testator married
the defendant and six weeks after making a new will in which he left his
entire estate to her he died.
 The plaintiff brought an action seeking a declaration that after the death of
the first wife the testator held her estate on trust for the plaintiff and the
death of the testator the defendant held his estate similarly on trust
 Held:
 Carnworth J accepted that where there was clear evidence that the wills were
intended to be mutually binding, the law will give effect to that intention by
way of a floating trust which crystallises on the death of the second testator
 Held in the present circumstances the evidence fell short of establishing such
an agreement between the testator and his first wife, the wills were not
mutually binding
Olins v Walters [2009]
 Mummery LJ stated:
 "The obligation on the surviving testator is equitable. It is in the nature of a
trust of the property affected, so the constructive trust label is attached to it.
The equitable obligation is imposed for the benefit of third parties, who were
intended by the parties to benefit from it. It arises by operation of law on the
death of the first testator to die so as to bind the conscience of the surviving
testator in relation to the property affected."
 He concluded that since there had been ample evidence before the trial
judge to show on the balance of probabilities that the intention of the
defendant and the deceased had been to enter into a contract to create
mutual wills, a constructive trust had arisen
3.6.3. The Remedial Constructive Trust
 The Remedial Constructive Trust
o The institutional constructive trust is a device which arises in certain defined situations, for
example where there has been a breach of fiduciary duty or the defendant has acted
unconscionably. It arises by operation of law and the court’s role is to effectively recognise a
trust which has already arisen. On the other hand, a remedial constructive trust is one
which is imposed by the court in the exercise of its discretion as a remedy in circumstances
where it considers that fairness requires it.
o Institutional Constructive Trust v Remedial Constructive Trust
 Institutional Constructive Trust
 Device with arises in certain defined situations, for example where there has been a
breach of fiduciary duty
 Arises by operation of law and the court’s role is to effectively recognise a trust
which has already arisen
 Remedial Constructive Trust
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

 Imposed by the court in the exercise of its discretion as a remedy in circumstances
where it considers that fairness requires it
 Unpredictable but flexible
o The distinctions between the institutional and remedial constructive trust were set out in
Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996]
 Lord Browne-Wilkinson - "under an institutional constructive trust, the trust arises by
operation of law as from the date of the circumstances which give rise to it: the function
of the court is merely to declare that such a trust has arisen in the past' whereas a
remedial constructive trust was that 'it is a judicial remedy giving rise to an enforceable
equitable obligation'
New Model Constructive Trusts
o Hussey v Palmer [1972]
 Lord Denning MR stated that a constructive trust would be imposed ‘whenever justice
and good conscience require it'.
The Attitude of the Irish Courts to the New Model Constructive Trust
o N.A.D v T.D. [1985]
 Case concerned a claim relating to contribution allegedly made by the plaintiff towards
the building of a house on a site bought in her husband's name
 Barron J concluded that there was no evidence on the part of the husband which could
make it inequitable to deny the wife's claim and her claim to a share in the house
therefore failed
 Barron J adopted a similar line of reasoning to Lord Denning
 "‘The constructive trust is imposed by operation of law independently of intention
in order to satisfy the demands of justice and good conscience. Its imposition is
dependent upon the conduct of the person upon whom the trust is imposed and
prevents him from acting in breach of good faith. There is no fixed set of
circumstances in which such a trust is imposed."
o HKN Invest Oy v Incotrade Pvt Ltd [1993]
 Facts:
 Case concerned a claim by the plaintiffs who had obtained judgement against the
defendants, namely a company and the individuals responsible for conducting its
affairs, and who sought to be allowed to complete execution of this judgement. In
relation to monies received by way of commission on pre-incorporation contracts
 Held:
 Costello J held that although the individual defendants concerned might not have
been fiduciaries at the time they received this commission, these funds were held
on trust for the company and could not be subject of a garnishee order
 Costello J stated that a constructive trust will arise when the circumstances of the
case are such as to render it inequitable for the legal owner of the property to dent
another's title to it and agreed that ‘where a person … holds property in
circumstances which in equity and good conscience should be held or enjoyed by
another he will be compelled to hold the property in trust for another'.
o Murray v Murray [1996]
 Facts:
 The plaintiff, the defendant's nephew, had lived in a property belonging to the
defendant - who had paid the initial deposit on it - for many years with his aunt, the
defendant's sister, who during her lifetime had paid the mortgage instalments and
most of the outgoing on the property. After her death the plaintiff, who was her
next of kin, claimed that he was entitled to the beneficial interest in the property
and argued that in the circumstances it would be unconscionable for the defendant
to rely on his legal title.
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o
o
 Held:
 Barron J stated, 'It is I think quite clear that the law will impose a constructive trust
in all circumstances where it would be unjust and unconscionable not to do so.'
 He concluded that in the circumstances the plaintiff was entitled to 3/4 of the
beneficial interest in the property and that he was a tenant in common of the
premises with the defendant
 Mee is critical of this approach -, stating that Murray shows the new model
constructive trust in its worst light; in his view the absence of intention should
probably have precluded even a constructive trust, but its 'inherent vagueness'
made it more plausible for Barron J to provide the plaintiff with a remedy.
Kelly v Cahill [2001]
 Nominally based on the dicta from HKN, seemed to expand the existing principles in
order to achieve a 'just' result
 Facts:
 The deceased informed his solicitor that he wanted to alter his will since he no
longer wished to benefit his nephew, the second defendant, but intended to leave
all his property to his wife, the first defendant. His solicitor advised him to execute a
deed transferring his property to the joint names of himself and his wife in order to
avoid tax. However, through the inadvertence of the solicitor, some of the lands
had not been transferred and would pass on to first defendant for life with the
remainder to the second defendant
 Held:
 Barr J stated that the net issue in the case was whether a constructive trust arose in
relation to the lands which were not transferred into joint ownership as intended by
the testator
 Barr J expressed the view that ‘a “new model” constructive trust…the purpose of
which is to prevent unjust enrichment is an equitable concept which deserves
recognition in Irish law.’
 In these circumstances ‘justice and good conscience’ required that second
named defendant should not be allowed to inherit the property and the
interest in remainder under the will should be deemed to be subject to a
constructive trust in favour of the first named defendant.
 He said the kernel of the question was whether the evidence established a clear,
positive intention on the part of the testator that his wife shall inherit all his
property, that he took appropriate steps to bring this all about and that he could
not have reasonably known through the error that not all of the lands were
transferred
 He concluded that this had been established
 O’Dell (2001) is critical of Barr J’s judgment and describes the statement referred to
above as ‘yet another example of the unfortunate conflation of unjust enrichment and
the remedial constructive trust’, which has the effect of collapsing the distinction
between personal and proprietary claims. In his view the remedial constructive trust
upon which the decision was based, although clearly established in Irish law, was still
‘too unfocussed and insensitive to issues of policy, priority and timing’ and should be
deployed with more caution.
Re Custom house Capital Ltd [2013]
 Facts:
 Applicant transferred money to company for investment, had opportunity to take
out money but didn’t. Company had to wind-down so applicant sued and sought a
constructive trust. Court said the facts did not support between any fiduciary
relationship between her and the company. Finlay Geoghegan J accepted what the
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liquidator was saying – there are reasons to be careful in imposing constructive
trust because of their far-reaching consequences, particularly in an insolvency issue
 Held:
 Finlay Geoghegan J recognised that a constructive trust which is a remedy of a
proprietary nature is a potentially far reaching one, in granting a declaration that a
company in liquidation held a sum of money on trust for the applicant
 She stated that the court must be satisfied that it was by reason of fraudulent
conduct by or on behalf of the company that it retained the applicant’s monies in
order to make a finding of a constructive trust in her favour.
O’Dell (2001) 23 DULJ 71
3.6.4. Liability of Third Parties to Account in Equity
 Where a trustee or fiduciary has acted in breach of trust or his fiduciary duty, he may be
personally liable to account to the beneficiary or principal in the fiduciary relationship
o This personal claim against the party responsible for effecting the breach of trust or
fiduciary duty may be at law in the form of ac action for money had or received or in equity
o Another option is a proprietary remedy at law or in equity to trace the trust property
 However, where the trustee or fiduciary is insolvent or where it is no longer possible to trace the
trust property, an alternative form of claim may be the only way for a beneficiary or principal to
recover misappropriated assets
o In certain circumstances, liability to account in equity may be imposed on third parties or
'strangers' to a trust, where they have received trust property with a degree of knowledge
sufficient to justify the imposition of liability or have dishonestly assisted in a breach of trust

Intermeddling in a Trust - The Trustee de Son Tort
o Where a person intermeddles with the affairs of a trust or performs acts characteristic of a
trustee he will become a trustee de son tort i.e. because of his wrong.
o Williams v Central Bank of Nigeria [2014 ]
 Lord Scrumption JSC noted a distinct head of liability arises where individuals lawfully
assume fiduciary obligations in relation to trust property, but without formal
appointment.
 In such a case it is suggested 'they are trustee trustees, and if the assets are not
applied in accordance with the trust, equity will enforce the obligations that they
assumed by virtue of their status exactly as if they had been appointed by deed'
 Lee (2015) states that ‘Crucially, the majority accept the analysis of Lord Millett from
earlier cases that a ‘true’ constructive trustee ‘really is a trustee’, whereas a stranger to
the trust, ‘is not in fact a trustee at all, even though he may be liable to account as if he
were’.
o In essence liability under this heading depends on the voluntary assumption of the
obligations of trusteeship followed by actions which amount to a breach of trust
 A stranger who purports to act as a trustee will be subject to all the liabilities imposed
on an expressly appointed trustee

Assisting in the Misappropriation of Trust Property
o Dishonesty of the Person Assisting in the Breach Trust
 The circumstances which liability may be imposed under this heading is set out by Lord
Nicholls delivering the judgement of the Privy Council in Royal Brunei Airlines Sdn Bhd
v Tan Kok Ming as follows:
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o
 'A liability in equity to make good resulting loss attaches to a person who
dishonestly procures or assists in a breach of trust or fiduciary obligation'.
 The latter formulation focuses on the dishonesty of the person assisting the breach
rather than requiring dishonesty on the part of the trustees as the previous principle
had
 As Lord Nicholls stated:
 'In this regard dishonesty on the part of the third party would seem to be a
sufficient basis for his liability irrespective of the state of mind of the trustee who
was in breach of trust'
 In his opinion it was difficult to see why, if a third party dishonestly assisted in a
breach of trust, there should be a further prerequisite to his liability, namely that
the trustee must also be shown to have been acting dishonestly
 The academic reaction to the approach adopted by the Privy Council in Royal Brunei
was overwhelmingly favourable, and it was welcomed as clarifying a number of
uncertainties in this area in a purposeful manner
The Requirement of Knowledge/Dishonesty
 The decision of the Privy Council in Royal Brunei is also significant in that it marked a
shift away from the concept of 'knowledge' being the primary focus of the court's
inquiry in weighing up whether liability under this heading may be imposed
 Prior to this, a consideration of the degree of knowledge possessed by the assister
was crucial to the imposition of liability
 Baden v Société Generale pour Facoriser le Développment du Commerce et de
l'Idustrie en France SA [1993]
 Peter Gibson J set out five categories of knowledge:
 "(i) Actual knowledge;
 (ii) wilfully shutting one’s eyes to the obvious;
 (iii) wilfully and recklessly failing to make such inquiries as an honest and
reasonable man would make;
 (iv) knowledge of circumstances which would indicate the facts to an honest
and reasonable man;
 (v) knowledge of circumstances which would put an honest and reasonable
man on inquiry."
 One of the most important judgements in this area is that of Millet J in Agip (Africa) Ltd
v Jackson [1990]
 Facts:
 A senior officer in the plaintiff company fraudulently altered a payment order
for £500,000 to a creditor by substituting the name of a company managed
by the defendants which had been set up in order to launder the money. The
money was credited to the company's bank account and following a series of
transactions in which the money was transferred to various recipients, the
company was wound up. The plaintiffs brought an action against the
defendants to recover the money, claiming that the defendants were
constructive trustees of the funds on the basis of knowing receipt and
knowing assistance
 Held:
 Millet J held that none of the defendants could be liable on the basis of
knowingly receiving funds for their own benefits but the defendants were
liable under the heading of knowing assistance as 'they were at best
indifferent to the possibility of fraud'
 Constructive notice was no sufficient to make the defendant liable
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


 "If a man does not draw the obvious inferences or make the obvious
inquiries, the question is: why not? If it is because, however foolishly he did
not suspect wrongdoing or, having suspected it, had his suspicions allayed,
however unreasonably, that is one thing. But if he did suspect wrongdoing
yet failed to make inquiries because ‘he did not want to know' (category (ii)
or because he regarded it as none of his business (category (iii)), that is quite
another. Such conduct is dishonest, and those who are guilty of it cannot
complain if, for the purpose of civil liability, they are treated as if they had
actual knowledge."
 He confirmed that knowledge within the first three categories laid down in Baden
is required, he also suggested an important distinction must be made between
honesty and dishonesty
The decision of the Privy Council in Royal Brunei is one of the most important
authorities on the issue
 Lord Nicholls stated that ‘“knowingly” is better avoided as a defining ingredient of
the principle’ and that it is ‘inapt as a criterion when applied to the gradually
darkening spectrum where the differences are of degree and not kind.’
 Berg [1996] has questioned why the Privy Council saw fit to require dishonesty
and reject the concept of 'knowingly' as a test of liability and he points out that
Lord Nicholls acknowledged that honesty has to be assessed in the light of what a
person actually knew at the time
One aspect of the principles set out by Lord Nicholls in royal Brunei which has proved
controversial is whether he intended the concept of 'dishonesty' to be interpreted in a
purely objective manner or whether it must be established that a defendant was aware
that his conduct was dishonest
 ‘Honesty, indeed, does have a strong subjective element in that it is a description
of a type of conduct assessed in the light of what a person actually knew at the
time, as distinct from what a reasonable person would have known or
appreciated….However, these subjective characteristics of honesty do not mean
that individuals are free to set their own standards of honesty in particular
circumstances. The standard of what constitutes honest conduct is not subjective.
Honesty is not an optional scale, with higher or lower values according to the
moral standards of each individual. If a person knowingly appropriates another’s
property, he will not escape a finding of dishonesty simply because he sees
nothing wrong in such behaviour.’
Twinsectra Ltd v Yardley [2002]
 House of Lords was called upon to apply the reasoning of Lord Nicholls and serious
differences in opinion arose as to whether Lord Nicholls intended to lay down a
purely objective test in relation to dishonesty
 Facts:
 A solicitor who was acting for a client in connection with the purchase of land
had been unwilling to secure a loan for the client by giving a personal
undertaking. A second solicitor was prepared to do so and received the
money after the firm gave an undertaking that it would be used solely for the
acquisition of property on behalf of the client. The money was released to the
first solicitor who paid it out on the client's instructions although he took no
steps to ensure that it was only applied in the acquisition of property and a
substantial part of it was used for other purposes. The loan was not repaid,
and the lender sought to impose liability on the first solicitor alleging that had
dishonestly assisted in the breach of trust of the second solicitor, who had
gone bankrupt
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
 Held:
 Carnworth J found that the first solicitor had not been dishonest although he
accepted he deliberately shut his eyes to the implications of the undertaking
 The Court of Appeal reversed this finding, giving judgement against the first
solicitor for the proportion of the loan which had not been applied in the
acquisition of property
 An appeal against this decision was allowed by the House of Lords
 Lord Hutton, for the majority, stated that there were 3 possible
standards which could be applied to find if a person had acted
dishonestly:
A purely subjective test
A purely objective test
A combined test; which requires that before there can be a finding
of dishonesty it must be established that the conduct was
reasonable standard of dishonest and that the defendant realised
this
 Lord Hutton said that it would be less than just for the law to permit a
finding that a defendant had been dishonest in assisting in a breach of
trust where he had not been aware that what he was doing would be
regarded by honest men as being dishonest. In his view:
‘[D]ishonesty requires knowledge by the defendant that what he
was doing would be regarded as dishonest by honest people,
although he should not escape a finding of dishonesty because he
sets his own standards of honesty and does not regard as dishonest
what he knows would offend the normally accepted standards of
honest conduct.’
 Lord Millet dissented and said that in his opinion the standard of Royal
Brunei was an objective one
 Academic commentary has been almost universally critical of the majority in
Twinsectrea, with the views of Lord Millet more welcomed
Barlow Clowes International Ltd v Eurotrust International Limited [2006]
 Facts:
 The defendants had been found liable for dishonestly assisting in the
misappropriation of investors' funds. The second defendant's appeal against
the finding was allowed and the appellant company appealed to the Privy
Council
 Held:
 The trial judge had stated that if by honest standards a defendant's mental
state would be characterised as dishonest, it is irrelevant that the defendant
judges by a different standard
 The Court of Appeal and the Privy Council agreed
 The trial judge had found that the second defendant strongly suspected that
the funds passing through his hand were monies which the company had
received from members of the public who thought they were subscribing to a
scheme of investment in gilt-edged securities but that he had consciously
decided not to make inquiries because he preferred not to run the risk of
discovering the trust
 Lord Hoffman stated that the Lordships found this to be dishonest by
ordinary standards
 Lord Hoffman commented:
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
 ‘Their Lordships accept that there was an element of ambiguity in [the
remarks of Lord Hutton] which may have encouraged a belief, expressed
in some academic writing, that Twinsectra had departed from the law as
previously understood and invited inquiry not merely into the
defendant’s mental state about the nature of the transaction in which he
was participating but also into his views about generally acceptable
standards of honesty. But they did not consider that this is what Lord
Hutton meant. The reference to ‘what he knows would offend normally
accepted standards of honest conduct’ meant only that his knowledge of
the transaction had to be such as to render his participation contrary to
normally acceptable standards of honest conduct. It did not require that
he should have had reflections about what those normally acceptable
standards were.’
 Commentary
 Yeo (2006), had commented that the distinction between the majority and
the minority in Twinsectra was explained in Barlow as a difference in view on
standards of objective dishonesty
 Ryan [2006], commented that the decision in Barlow Clowes has ‘brought
closure to the ambiguity engendered by Twinsectra as to the true test posited
by Lord Nicholls in Royal Brunei’ and he correctly stated that the
interpretation of Royal Brunei put forward in Barlow Clowes is a more
accurate reading of the former decision than that put forward by the majority
in Twinsectra.
 Halliwell and Prochaska [2006] expressed the view that it was 'entirely
dubious' to suggest that Barlow Clowes may have at least brought clarity to
this area of law and suggested that 'we are creeping full circle'
Abou-Rahmah v Abacha [2006]
 Facts:
 The claimants paid payments into the account of the fourth defendant bank
as part of a fraudulent scheme orchestrated by the first three defendants.
The money was then transferred into the account of a client company, the
principals of which were involved in the fraud and the trial judge accepted
that the bank's branch manager probably suspected that these individuals
might have assisted in money laundering. The money and the fraudsters
disappeared, and the trial judge dismissed the claims of the appellants on all
grounds
 On appeal they pursued the claims based on 'knowing or dishonest
assistance', the Court of Appeal upheld the banks defence
 Held:
 Arden LJ confirmed obiter that the test of dishonesty in this context is
‘predominantly objective’ and that it is not a requirement of the standard of
dishonesty that the defendant should be conscious of his wrongdoing.
 She expressed the opinion that while Twinsectra was binding on the court,
Barlow Clowes did not involve a departure from, or refusal to follow, the
former case. As she stated at [68]: ‘Rather, the Barlow Clowes case gives
guidance as to the proper interpretation to be placed on it as a matter of
English law. It shows how the Royal Brunei case and the Twinsectra case can
be read together to form a consistent corpus of law.’
Knowing Receipt of and Inconsistent Dealing with Trust Property
 General Principles
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
A recipient of property which has been misappropriated in breach of trust or fiduciary duty may
be liable to account provided that he possesses the necessary degree of knowledge of the
breach of trust or he receives it in circumstances which will be regarded as unconscionable for
him to retain it
o Similarly, where a recipient of trust property deals with it in a manner which he knows to be
inconsistent with the terms of the trust, he will be liable to account.


The Basis for the Imposition of Liability
Traditionally it has been accepted that in cases of knowing receipt there should be a lower
threshold of knowledge required that in cases of assistance
o However, the principles in this area are far from settled
Belmont Finance Corporation v Williams Furniture Ltd (No. 2) [1980]
o Buckley LJ held that where a stranger to a trust receives trust property with either actual or
constructive knowledge of the breach of trust, he will be regarded as a constructive trustee
of the property.
o Liability was imposed in that case on the basis of a receipt of trust monies by a company, the
directors of which knew or ought to have known belonged to the trust
Re Montagu's Settlement Trusts [1987]
o Facts:
 The trustees transferred certain chattels to a beneficiary in breach of trust and he
disposed of a number of these during his lifetime, although his solicitor was aware of the
terms of settlement. After his death his heir claimed that the beneficiary was a
constructive trustee of the chattels.
o Held:
 Megarry VC held that while the estate of the beneficiary was liable to return any
remaining chattels or their traceable profits, the beneficiary himself was not liable as a
constructive trustee
 Megarry VC favoured the imposition of liability only in circumstances where the
recipient possessed actual knowledge of the breach of trust
Lipkin Gorman v Karpanale Ltd [1987]
o Facts:
 A partner in the plaintiff firm of solicitors had withdrawn money mostly from the client's
account and lost it gambling in a club. The plaintiff firm brought an action against the
club on the basis of knowing receipt and against their bank on the basis of knowing
assistance.
o Held:
 The plaintiff failed to establish liability against the club and the finding of liability against
the bank was reversed by the Court of Appeal
 'there is at least strong persuasive authority for the proposition that nothing less than
knowledge, as defined in one of the first three categories stated by Peter Gibson J in the
Baden case of an underlying dishonest design is sufficient to make a stranger a
constructive trustee of the consequences of that design.
Agip (Africa) Ltd v Jackson [1990]
o Millet J stated that a person who receives for his own benefit trust property transferred to
him in breach of trust is liable as a constructive trustee if he received it 'with notice, actual or
constructive' that it was transferred in breach of trust
o Millett J reserved the question of whether Megarry VC's doubts about constructive notice
being sufficient in relation to knowing receipt were well founded
o Gardner (1996) 112 LQR 56, 69-70 suggests that Millett J's comment about whether Megarry
VC's doubts about constructive notice sufficing are well founded 'seems a reflection rather of
courtesy towards a brother judge than of uncertainty on Millett's part over his own view'.




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




Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2001]
o Facts:
 The claimants, who were the liquidators of two banking companies, contended that the
defendant was liable to account to them fir a sum of money as a constructive trustee on
the basis that he had knowingly assisted in a breach of trust or had received trust monies
with knowledge of breaches
o Held:
 Nourse LJ stated that while the categorisation of knowledge laid down in the Baden case
has been influential in many decisions relating to knowing receipt, it was not formulated
with that head of liability in mind.
 All that was necessary was that ‘the recipient's state of knowledge should be such as
to make it unconscionable for him to retain the benefit of the receipt.
Very few authorities on this issue in Ireland but the Supreme Court appears prepared to accept
that constructive knowledge will suffice to ground liability even in a commercial context
Re Frederick Inns Ltd [1994]
o Facts:
 Payments were made by a group of associated 6 companies to the Revenue
Commissioners in the 6 months immediately preceding the commencement of the
winding up of four of these companies out of proceeds of sale of various licensed
premises which had belonged to these four companies. The sum was appropriated by
the Commissioners in reduction of the tax liabilities of the six companies in the group.
The liquidator challenged these payments as being ultra vires in so far as they effected
an alienation of the companies' assets when they were insolvent
o Held:
 The Supreme Court held that monies had been received by the Revenue Commissioners
with constructive knowledge of the breach of fiduciary duty as the memoranda of
association of the companies involved, which were documents of public record, revealed
the absence of capacity. So, ultra vires payments made had to be repaid to the official
liquidator.
Fyffes plc v DCC plc [2009]
o Laffoy J expressed the view that in putting forward the unconscionable test in Akindele
Nourse J was imposing a stricter test than constructive notice
o Laffoy J concluded that in the circumstances it was not necessary for her to decide between
the application of the Akindele unconscionability test or the Belmont/Frederick Inns actual or
constructive knowledge test, although she did refer to Frederick Inns as ‘a decision by which
this court is bound’.
O'Donnell v Bank of Ireland [2014]
o Concluded that the trial judge had been correct in finding that the defendants had no
knowledge or reason to believe that there had been a breach in trust and that the claim
failed.
o Laffoy J: ‘While, on the current state of the law on the equitable principle of “knowing
receipt”, there is a divergence between this jurisdiction and the United Kingdom in that
“knowledge, actual or constructive” of the breach of trust is an ingredient of the test for
establishing liability as a constructive trustee in this jurisdiction, whereas in the United
Kingdom the corresponding ingredient of the test is whether the recipient had sufficient
knowledge of the circumstances of the transfer to make it “unconscionable” for him to retain
the benefit of the receipt, the Court does not have to address that divergence, because it was
not urged on behalf of the appellants that this Court should adopt the approach which has
been adopted in the United Kingdom.’
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3.6.5. Academic Commentary
O’Dell, ‘Unjust Enrichment and the Remedial Constructive Trust’, (2001) 23 DULJ 71
 Introduction: You Can Have One Without the Other
o A common misconception is that unjust enrichment is somehow equal to the remedial
constructive trust – it is not
 They are largely unconnected but the decision in Kelly v Cahill has replicated the
erroneous equation of the two concepts
 Unjust Enrichment
o In the Bricklayers case Keane J accepted that the principle of unjust enrichment organises the
law of restitution as a matter of Irish law
 At common law, the four common counts – the action for money had and received, for
money paid to the use of the plaintiff, quantum meruit, quantum valebant which were
formerly based upon the fiction of an implied contract, have now been largely based upon
the principle
 These arise in common law and not in equity and comprise the large bulk of the modern
law of restitution
o If there is an existing cause of action (mistake, failure of consideration or duress) then it can
be concluded that the enrichment is unjust
 it is entirely unrelated to principles of equitable discretion which might be thought to give
rise to proprietary liability. Consequently, of itself and without more, it cannot form the
basis of a claim to a remedial constructive trust
 Remedial Constructive Trust
o Lord Denning M.R., said that: "… it is a trust imposed by law whenever justice and good
conscience require it. It is a liberal process, founded on large principles of equity, to be
applied in cases where the defendant cannot conscientiously keep the property for himself
alone …".
o It is a very controversial innovation
 In the Bricklayers Hall case Budd J expressed the need for caution and this has been
interpreted as putting an end to the remedial constructive trust in Ireland
 However, it could be said that his judgement in that cause was a support of the innovation
albeit with caution
o Caution is necessary if the remedial constructive trust is not to collapse the distinction
between personal and proprietary claims, a distinction which is crucial in the context of a
defendant’s bankruptcy or insolvency
o The principle against unjust enrichment gives rise to legal, personal claims, it cannot support
an equitable proprietary claim such as the remedial constructive trust. More generally, of
itself and without more, unjust enrichment is no basis for a constructive trust; it merely gives
rise to a personal claim for the return of the value of the enrichment received by the
defendant at the expense of the plaintiff.
 Although unjust enrichment and the constructive trust represent separate streams of
analysis, they may on occasion flow in parallel, and there may even be one point at which
they join
 For example: where a breach of trust or a breach of fiduciary duty gives rise to the
unjust enrichment
 Kelly v Cahill
o Barr J’s judgement contains another example of the unfortunate conflation of unjust
enrichment and the remedial constructive trust
 By collapsing the distinction between them Barr J has collapsed the fundamental
distinction between personal and proprietary claims
 Conclusion
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The result in Kelly v Cahill may be justifiable either as an example of a Re Rose trust) or on the
basis of rectification of the deed; and either remedy might – depending on policy
considerations – extend to a case where the error related to a will
 However, the reasoning in Kelly v Cahill leaves much to be desired. The remedial
constructive trust upon which it is based, though clearly established at Irish law, is as yet
too unfocussed and insensitive to issues of policy, priority and timing; the Westdeutsche
formulation is no less inadequate; far better than simply to have rectified the deed, and
not to have yoked together the distinct concepts of unjust enrichment and the remedial
constructive trust.
o However, remedial constructive trust and unjust enrichment may run in parallel if a plaintiff
has two separate claims against the defendant; one a personal claim to restitution of an
unjust enrichment, and the other an alternative proprietary claim to a remedial constructive
trust. Furthermore, the two streams may join if the basis of the remedial constructive trust
identifies a further element, which, in conjunction with unjust enrichment, is deemed
sufficient to elevate the personal liability into a proprietary one
o
Swadling ‘Explaining Resulting Trusts’ (2008) 124 LQR 72
 Swadling notes that the presumption of a resulting trust exists because equity is suspicious of
gifts; yet almost nowhere is this suspicion justified. There is a suggestion that it is to prevent the
unintended transfer of assets. There is another suggestion that it is similar to the doctrine of
undue influence, that a presumption arises that the deceased has been influenced to make this
transferral. However, Swadling notes that this is not the case, in undue influence there is a
requirement for a category of relationship where the donor conveys trust and confidence in the
donee and in undue influence proof of intention will not stop the presumption arising.
 Swadling says there needs to be a proper understanding of the presumption that arises in
resulting trusts and that there should only be one true presumption, ‘the presumption of law,
where proof by evidence of one fact generates proof of a second fact without need for
evidence.’
 Concludes that while there is some explanation for what a presumed resulting trust is, the
automatic resulting trust defies legal analysis
Ryan [2006] Conv 188
 Introduction
o In the course of delivering the advice of the Privy Council some 10 years ago in Royal Brunei
Airlines Sdn Bhd v Tan Kok Ming, Lord Nicholls of Birkenhead famously identified
dishonesty, rather than knowledge, as the appropriate touchstone in determining the
question of whether liability ought to be imposed upon a stranger who has assisted in a
breach of trust or fiduciary duty
o Under Royal Brunei, then, the meaning of dishonesty appeared tolerably clear. Although it
contained a limited element of subjectivity--with regards to the impugned conduct, the
individual defendant must have engaged in a course of “advertent conduct”, to be assessed
in light of the defendant's actual awareness at the relevant time--the test for assessing
dishonesty did not require that the defendant himself or herself should have appreciated
that the conduct was dishonest: if by ordinary standards a defendant's mental state would
be characterised as dishonest, it was irrelevant that the defendant adhered to a different
moral code or did not appreciate that his or her actions transgressed those ordinary
standards of honesty.
 The majority position in Twinsectra
o In the course of his opinion in Twinsectra, with which the majority agreed, Lord Hutton--or
so it appeared--took the view that liability for dishonest assistance under Royal Brunei
would be incurred only by those who were self-consciously dishonest
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

The approach in Barlow Clowes
o While the Privy Council has now restored what appears to be the better interpretation of
the Royal Brunei test--that there is no requirement for the purposes of establishing
dishonesty that the defendant himself or herself was aware that his or her conduct was
dishonest--its reading of the majority opinions in Twinsectra in such a manner as to disavow
any disparity between the approach taken therein and the earlier approach of Lord Nicholls,
is surprising.
Conclusion
o To summarise, the effect of the advice of the Privy Council in Barlow Clowes is to confirm
that liability under Royal Brunei requires a dishonest state of mind on the part of the
assistant in a breach of trust. Such a state of mind might consist of knowledge that the
transaction was one in which the assistant could not honestly participate, or it might consist
of suspicion combined with a conscious decision not to make inquiries which might result in
knowledge
o Crucially, the ruling confirms that, although a dishonest state of mind is a subjective mental
state, the standard by which the law determines whether a state of mind is dishonest is
objective.
‘Palm Trees in the Rain- New Model Constructive Trusts in Ireland’ Mee (1996) 1 CPLJ 9
 Mee calls it ‘disturbing’ to see the new model constructive trust that was rejected by the courts
in England being proposed in courts in Ireland. Mee argues that ‘Lord Denning’s doctrine richly
deserved its demise’.
 Mee argues that the uncertainty in its application should prevent the new model being imposed.
The notion of a judge basing his decision on his own perceptions of justice and good conscience
has conjured ‘in the minds of some commentators the image of a potentate stretched out under
a palm tree, dispensing justice to his subjects upon the whim of the moment.” Mee argues that
Lord Denning’s approach is a rejection of the doctrine of stare decisis and was entirely without
basis in previous law.
 Mee argues that the new model has not yet been accepted fully into Irish law. Argues a return to
the decisions in BL v ML and EN v RN.
Gardner (1996) 112 LQR 56
 Gardner offers an optimistic outlook on the development of the law relating to knowing
assistance and knowing receipt. The concept from which the rules may be assembled have been
much more thoroughly explored and seem better understood. The rules themselves are more
certain than they once were.
 Gardner expresses the view that it is natural that the courts have faced some difficulty arriving at
different designs for these liabilities, ‘our society is a complex and compromised one on any
front’. Approves of the pluralistic appreciations of it that have developed, trusts are by their
nature confusing, ‘no rule which we may adopt can capture all this more than partially and
temporarily.’
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3.7. Purpose Trusts
 Introduction
o A trust for purposes which are treated in law as charitable will be recognised as valid
o The distinctive nature of such trusts is that they are regarded as being for the public benefit
and are enforceable by the Charities Regulatory Authorities
 However, trusts for non-charitable purposes will not generally regarded as valid as they
are considered to lack the human beneficiaries necessary to secure their enforcement,
are too uncertain in nature, and will often offend the rules against perpetual trusts and
inalienability
o In certain limited circumstances purpose trusts have been recognised as valid
 Although these cases have tended to be regarded as 'concessions to human weakness or
sentiment' which 'ought not to be increased in number, nor indeed followed, except
where one is exactly like another'
Rationale for Policy of Non-Enforcement of Purpose Trusts
Enforceability - The Beneficiary Principle
o Charitable trusts are enforced by the Charities Regulatory Authority and private trusts are
enforced by beneficiaries but for non-charitable purpose trusts there is no one who can
ensure that the court will secure performance of the trust should it become necessary
o Morice v Bishop of Durham (1804)
 Grant MR - "there must be somebody in whose favour the court can decree
performance"
o Re Astor's Settlement Trusts [1952]
 Roxburgh J - "that a trustee would not be expected to be subject to an equitable
obligation unless there was somebody who could enforce a correlative equitable right."
o There are some anomalies to this rule
 Gifts for tombs and monuments
 Gifts for specific animals
o However, some decisions are difficult to justify and unlikely to be followed
o Re Gibbons [1917]
 Facts:
 A testator directed that the residue of his estate should be disposed of by his
executors, who were fellow priests, 'to my best spiritual advantage, as conscience
and sense of duty may direct'
 Held:
 Barton J held that the bequest was not charitable in nature but held that it could be
upheld as a private trust - rejecting arguments that it was too indefinite and lacked
specific beneficiaries
 Enforceability - Clarity and Certainty
o If non-charitable purpose trusts are to be recognised as valid they must be expressed in
terms which are sufficiently clear and certain to enable a court to oversee their performance
o Morice v Bishop of Durham (1804)
 Grant MR found 'such objects of benevolence and liberality as the Bishop of Durham in
his own discretion shall most approve of' was too uncertain


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Re Astor's Settlement Trusts [1952]
 Facts:
 An inter vivos settlement, expressly limited to the perpetuity period, provided that
shares were to be held on trust for specified non-charitable objects including 'the
establishment, maintenance and improvement of good understanding, sympathy and
co-operation between nations' and the 'preservation of the independence and
integrity of newspapers'
 Held:
 Roxburgh J held that the trusts fell afoul of the beneficiary principle, but he also
made it clear that they would have failed as being too uncertain in nature
 The Need for Compliance with the Rules against Perpetual Trusts and Inalienability
o While the first two objections arise out of the principle that a trust for non-charitable
purposes should fail if it cannot be properly controlled and, if necessary, administrated by a
court, this objection is based on considerations of public policy, which dictate that property
should not be tied up for excessive periods of time
o Before a purpose trust will be enforced the court must be satisfied that the property included
in the trust will not be rendered inalienable.
o Clearly one of the most important factors in determining whether a gift is void will be
whether the obligation involves merely the application of the income from the gift to the
stated purpose
o Where a phrase such as 'so long as the law allows' or 'such period as the law permits' has
been employed, a gift will be regarded as valid for a period of 21 years
 In some respects, a fairly flexible attitude has been taken towards the need for
compliance with the rule against inalienability and the courts have assumed that the
requirements of the rule will be met where it appears that this is a reasonable
interpretation of a gift.
o Musset v Bingle [1876]
 Facts:
 A testator gave a legacy of £300 to be applied in the erection of a monument to his
wife's first husband and a further sum of £200, the interest on which was to be used
for its maintenance
 Held:
 Hall VC upheld the validity of the former gift presumably on the assumption that the
monument would be erected within the perpetuity period. The latter gift was clearly
of a perpetual nature and therefore void.
 The Law Reform Commission in its report considered the effect of the rule against trusts of
undue duration and did not recommend its abolition
o Noted that the rule is just one of the devices employed to regulate non-charitable purpose
trusts and concluded that it would be preferable to postpone any detailed consideration of
the rule until it could be examined in the context of a review of the entire area
o


Exceptional Cases in Which Purpose Trusts have been Enforced
Tombs and Monuments
o At common law a trust for the erection of a tomb, gravestone or monument was not
regarded as being charitable in nature
o Legislation has intervened in a limited way with section 50 of the Charities Act 1961
 Which provides that gifts for the maintenance or improvement of any tomb, vault, grave
tombstone' are deemed to be charitable gifts insofar as they do not exceed £60 a year in
the case of income and £1,000 in any other case
 These limits have not been increased for years since the enactment of the legislation
o Musset v Bingle [1876]
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
The Courts appear to assume that directions of this nature will be carried out within the
perpetuity period
 It also illustrates that a gift for the maintenance of a monument without any words of
qualification will be void
 Animals
o A gift to provide for the welfare of animals generally or for the care and maintenance of a
class of animals is regarded as being charitable. Gifts to provide for the care of specified
animals would prima facie fall foul of the beneficiary principle, but have been upheld as
coming within the limited class of exceptions
o Re Dean (1889)
 North J upheld a gift of £750 per annum for a period of 50 years for the care and
maintenance of the testator's horses and hounds
 He rejected the view that the court would not recognise the validity of a trust unless it is
capable of being enforced by someone
 It was recognised as an unsatisfactory judgement
 North J then proceeded to virtually ignore the potential problem of violating the rule
against inalienability and remarked he would uphold a gift of this nature 'provided that it
is not to last for too long a period'
 This approach has been rejected in this jurisdiction
o Re Kelly [1932]
 Facts:
 A testator bequeathed a sum of money to be applied in the care and maintenance of
his dogs with a gift over should any surplus remain on the death of the last dog
 Held:
 Meredith J upheld the gift as being valid for a period of 21 years following the
testator's death, although it would have been technically void thereafter and the gift
over was found void for remoteness
 Gifts to Unincorporated Associations
o While a gift to a body corporate even for non-charitable purposes will be valid because such a
body has a separate legal personality and therefore can enforce it, difficulties arise where it is
sought to confer a gift of a non-charitable nature on an unincorporated association. Gifts of
this nature may fall foul of the beneficiary principle or may contravene the rule against
inalienability.
 A number of different methods of conferring a benefit on unincorporated associations
have been devised
o A Gift by Way of Endowment for the Benefit of the Association
 Where a gift if construed as an endowment for the benefit of the association it will
almost inevitably be found to be void as infringing the rule against inalienability
 However, if the wording of the gift is such that it satisfies the requirement of the rule
against inalienability it is allowed
o A Gift to the Members of the Association for the Time Being
 A gift to an unincorporated association may be enforced if it is recognised as a gift to the
members of the association alive at the time of the disposition, or at the date of the
testator's death
 Cocks v Manners (1871)
 A gift to a contemplative order of nuns was treated as a gift to the superior of the
community for the time being and in this manner, it was upheld on the basis that it
did not infringe the rule against inalienability
o Property Held on Trust to be Applied in Accordance with the Contract Between Members
 Re Lipinski's Will Trusts [1976]
 Facts:
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 A testator bequeathed half of his residuary estate to trustees to the 'Hull
Judaeans (Maccabi) Association' in memory of his late wife, to be used in the
work constructing new buildings for the association or improving them.
 Held:
 Oliver J held the gift was valid as an absolute gift to the members of the
association beneficially as an accretion to its funds subjects to rules of
association
 It was not open to objection on the grounds of perpetuity as Oliver J was
satisfied that there was nothing in the will to suggest an intention to create a
permeant endowment
 While some decisions show a greater willingness to place a favourable construction on
gifts of this nature, a warning was given by the Harman LJ Court of Appeal in Re Endacott
[1960] that the categories of these ‘anomalous' cases should not be extended.
 Hayton (2001) recommended that an ‘enforcer’ might be appointed under the terms of a
trust in order to oversee its enforcement and he suggests that there is no reason why
equity should not permit a settlor to confer additional enforcement rights on other
persons, including himself. This suggestion has been taken up by a number of other
academic commentators, including Brown, [2007] and Pawlowksi and Summers [2007]

Conclusion
o While the categories of trusts for exceptional cases seem to be accepted as enforceable there
appears to be doubt as to the validity of other forms of non-charitable trusts
o For other forms of non-charitable purpose trusts the lack of beneficiaries has proved to be
the major stumbling block
o Re Endacott [1960]
 Lord Evershed MR - "No principle, perhaps, has greater sanction or authority behind it
then the general proposition that a trust by English law, not being a charitable one, in
order to be effective must have ascertained or ascertainable beneficiaries'
3.7.1. Academic Commentary
Hayton, ‘Developing the Obligation Characteristic of the Trust’, (2001) 117 LQR 96
 In the 21st century it seems likely that the English concept of a trust will become more flexible
 The Orthodox View: Trusts Need Beneficiaries to Enforce Them
o In English trust law as Lord Millett has stated,3 “It is elementary that a settlor who retains no
beneficial interest cannot enforce the trust which he has created.”
o Charitable trusts are valid because they are enforceable by the Crown acting through the
Attorney General or Charity Commissioners. However, the orthodox view is that noncharitable trusts without beneficiaries are void
 The reason for this rule is that a trust is an obligation and so requires the trustee to owe
duties to the beneficiaries, who have a correlative right to make the trustee account to
them for the carrying out of those duties.
 Is accountability to beneficiaries that is the core of the trust concept, or is it just
accountability to someone?
 Why Non-Charitable Purpose Trusts Should Only Need Someone Intended by the Settlor to
Enforce Them
o It has been clear in case law that trusts without beneficiaries will not be considered valid
o What, however, if the settlor in his trust deed expressly confers locus standi on an enforcer
interested in the furtherance of the settlor’s specific non-charitable purpose trust?
 E.g. a trust for a political party enforceable by the leader of that party
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The trust deed clearly supplies a mechanism for the positive enforcement of the trust so
that the trustees are under an obligation to account to someone in whose favour the
court can decree performance.
o The English Courts do not consider trusts that have no beneficiaries in other jurisdictions,
allowed in their legislation (e.g. Bermuda) void but enforces them
 Thus, where a trust instrument provides for an enforcer to enforce a non-charitable
purpose trust, the beneficiary principle should not vitiate such a trust, whether the trust
be governed by a foreign law with legislation accepting such a trust as valid (and
whether the trust is wholly foreign, except for some trust assets located in England, or is
wholly internal to England except for the choice of the foreign governing law ) or be
governed by English law under general equitable principles.
 Trusts for Beneficiaries – Additional Enforcers
o A settlor may well usefully choose to designate himself (and after his death, a protector) as
enforcer where the trust property will be held for a range of beneficiaries currently minors or
unborn (or for many years bound to include unborn unascertained beneficiaries); and there
seems no good reason why trustees who voluntarily undertake such extra obligation to him
should not be bound by it without the need for the settlor to take further steps of a
contractual nature to achieve this.
 However, the settlor's rights must be additional to, rather than to the exclusion of, the
rights of the beneficiaries, because if only the settlor can sue in respect of events
occurring in his lifetime, the property is really held to his order, the beneficiaries having
no rights, other than testamentary rights to whatever is left
 Conclusion
o The status of beneficiary automatically confers rights as enforcer of the trust obligation.
However, there is no reason why equity should not permit a settlor to confer additional
enforcement rights on other persons (including himself), and, where the obligation is not to
benefit particular beneficiaries but to effect purposes, to confer original primary enforcement
rights on an enforcer whom the settlor believes can be relied upon to ensure that the
settlor's purposes are effected.
 Thus, non-charitable purpose trusts should not be automatically void: they should be
valid if the settlor has appointed an enforcer, so long as they are administratively
workable and restricted to a valid perpetuity period.
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3.8. Charitable Trusts
 Advantages of Charitable Status
o While as a general rule, subject to exceptions, trusts for purposes rather than for the
benefit of persons are invalid, charitable trusts which are considered to be for the public
benefit are an exception this this principle
 Charitable trusts have traditionally enjoyed a number of advantages over other types
of trusts:
 They do not depend on the existence of beneficiaries to enforce them, they are
instead enforced by the Charities Regulatory Authority
 However, this means that individuals who benefit from a charitable trust will
not be recognised as having the right to enforce such trusts
 They are not subject to the same requirements relating to certainty of objects,
which must be present for private trusts to be considered valid
 They may be perpetual in nature in so far as the rule of inalienability does not
apply to them
 They enjoy a number of fiscal immunities in terms of exemptions from liability to
various forms of taxation
 IN view of the extensive advantages enjoyed by charitable trusts, it has been argued
that some limitation must be placed on their proliferation
 While certain judicial statements show a tendency to adopt a benign attitude to
this question, the perceived benefit of undeserved fiscal immunity has proved a
thorny issue over the years
 Definition of Charity
o Re Howley's Estate [1940]
 Gavan Duffy J remarked that "'charity' is in law an artificial concept, which has strayed
far from the realm of common sense"
o Until the enactment of the Charities Act 2009 no attempt had been made by the legislature
to actually define what is legally charitable.
 A list of charitable purposes was contained in legislation passed in the seventeenth
century (in Ireland the Statute of Charitable Uses 1634 – repealed by Statute Law
(Revision) Act (Ireland) 1878), although these statutes were not intended to define
charitable objects in a legal sense but rather to enumerate a variety of purposes
recognised as being legally charitable.
o
o
Re Worth Library [1995]
 Keane J reiterated that a trust may be considered charitable if it fell within the 'spirit or
intendment' of the statute
Commissioners for Special Purposes of Income Tax v Pemsel [1891]
 Lord Macnaghten identified four broad categories of charitable trust:
 1. Trusts for the relief of poverty
 2. Trusts for the advancement of education
 3. Trusts for the advancement of religion
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 4. Trusts for other purposes beneficial to the community
 It has been generally accepted that trusts which are considered charitable in law fall
into these four separate, though not mutually exclusive, categories
o IN this jurisdiction, the Law Reform Committee of the Law Society of Ireland in its report
'Charity Law: the Case for Reform' stopped short of recommending a statutory definition
although it favour the introduction of guidelines in statutory form in order to facilitate de
decision making in this area
o A definition of 'charitable purpose' is not set out in Section 3 of the Charities Act 2009
 “or economic hardship” is added to category (1).
 In addition, s. 3(11) sets out a list of purposes included in category 4, now worded as
“any other purpose that is of benefit to the community”.
o A charitable trust is defined as a trust 'established for a charitable purpose only'
The Public Benefit Requirement
o What the Macnaghten Classification failed to make clear explicitly is that for a trust to be
regarded as legally charitable, it had to be of a public character and contain some element
of benefit to the public generally,
 So, there were in effect two hurdles to be overcome, first, an element of benefit, e.g.
the relief of poverty and secondly, an element of public benefit
3.8.1. Trusts for the Relief of Poverty
 This has been modified to ‘the prevention or relief of poverty or economic hardship’ in s.3(1) of
the Charities Act 2009 which defines charitable purposes.
o The existing case law interpreting the meaning of ‘poverty’ or ‘poor’ for the purposes of the
Macnaghten classification remains a useful guide in this context.
 The Meaning of 'Poor'
o It has been pointed out that 'poor' is a relative term
o Re Coulthrust [1951]
 Evershed MR:
 "It is quite clearly established that poverty does not mean destitution; it is a word
of wide and somewhat indefinite import; it may not unfairly be paraphrased for
present purposes as meaning persons who have to “go short” in the ordinary
acceptation of that term, due regard being had to their status in life and so forth."
 The Court of Appeal held for a trust for the benefit of widows and children of deceased
officers of bank, who by reason of the financial circumstances were the most
deserving, was a valid charitable trust
o Re Segelman deceased [1996]
 Chadwick J accepted that a gift to poor a needy member of a class of the testators
relatives was a valid charitable gift for the relief of poverty
 He stated that evidence suggested that 'most members of the class are comfortably
off, in the sense that they are able to meet their day-to-day expenses out of income,
but not affluent' and that 'like many others in similar circumstances, they need a
helping hand from time to time in order to overcome an unforeseen crisis'
 Histed has commented [1996] Conv 379, 386 that 'the court has come perilously close
to implying that an occasional problem of expenditure exceeding income is sufficient to
qualify a class member as "poor".'
 The Element of Public Benefit
o In the absence of statutory intervention, it is fair to say that the public benefit test in the
context of trusts for the relief of poverty in this jurisdiction has been relatively easy to
satisfy
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o
o
Provisions of Section 3 of the 2009 Act has limited the element of public benefit to some
degree
 As a result, the so called 'poor relations' or 'poor employees' trusts are unlikely to
qualify for charitable status in the future in this jurisdiction, given the personal
connection between the donor of the gift and the intended beneficiaries
The Test of Public Benefit in England
 It has always been important to distinguish a gift to specified poor individuals from a
gift to a class of the poor
 The former are not charitable in nature, while the latter are (even where the class
is of limited scope)
 Re Scarisbrick [1951]
 Facts
 A trust to benefit such relations of the testatrix's sons and daughters who in
the opinion of the survivor of her children 'shall be in needy circumstances'
was upheld as a valid charitable trust
 Held:
 Evershed MR stated: ‘The “poor relations” cases may be justified on the basis
that the relief of poverty is of so altruistic a character that the public element
may necessarily be inferred thereby; or they may be accepted as a hallowed,
if illogical, exception.’
 Jenkins LJ stated "I think that the true question in each case has really been
whether the gift was for the relief of poverty amongst a class of persons…or
was merely a gift to individuals, albeit with relief of poverty amongst those
individuals as the motive of the gift"
 He continued - "There is, however, an exception to the general rule, in
that trusts or gifts for the relief of poverty have held to be charitable
even though they are limited in their application to some aggregate of
individuals ascertained as above, and are, therefore, not trusts of gifts
for the benefit of the public or a section thereof. The exception operates
whether the personal tie is one of blood (as in the numerous so called
'poor relations' cases) or of contract, e.g., the relief of poverty amongst
the members of a particular society…or amongst employees of a
particular company and their dependants."
 These types of trusts have come to be regarded as anomalous exceptions to the public
benefit requirement which attaches to charitable trusts generally
 Attorney General v Charity Commission for England and Wales [2012]
 The Upper Tribunal confirmed in answering the questions put to it, that trusts for
the relief of poverty could be upheld as charitable even if confined to a restricted
class defined by personal relationship or contract of employment. It
acknowledged that the ‘poor relations’ cases represent an exception to the
general rule or an anomaly but the tribunal added that ‘within the exception, logic
and coherence must prevail’.
 Re Segelman deceased [1996]
 Chadwick J accepted that a gift to the poor and needy members of a class of the
testators relatives, which as not to close until 21 years after his death, was a valid
charitable trust for the relief of poverty and that it was not disqualified from being
such by the restricted nature of the class
 There were 26 members of the class and Chadwick J stated it was reasonable
to presume that by 21 years after the death of the testator the class would be
substantially larger
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
 Chadwick J stated that prima a gift for the benefit of poor and needy persons is a
gift for the relief of poverty and that such a gift is no less charitable because those
whose poverty is to be relieved are confined to a particular class limited by ties of
blood or employment
 He continued by saying that the basis for disqualification as a charitable gift
must be the restricted nature of the class leads to the conclusion that the gift
is really one to the individual members of a class
 In his opinion it was impossible to attribute to the testator an intention to
make a gift to those after-born issue as such and his intention must therefore
be taken to have been the relief of poverty amongst the class of which they
would become members
Dingle v Turner [1972]
 Facts:
 The testator directed trustees to apply the income of a fund for the purpose
of paying pensions to poor employees of a firm who were at least 60 years of
age, or who were at least 45 years of age and incapacitated from earning a
living
 Held:
 House of Lords approved Scarisbrick to the effect that the true question must
be whether the gift was really for the relief of poverty amongst a class of
persons or merely a gift to individuals, albeit with the relief of poverty
amongst those individuals as the motive for the gift
 This decision has clearly confirmed that trusts for the benefit of 'poor
employees' will be recognised in England as valid charitable trusts
3.8.2. Trusts for the Advancement of Education
 Trusts for the advancement of education in the formal sense have long been recognised as
charitable in nature
o s.3(1)(b) of the Charities Act 2009 expressly states that the advancement of education is a
charitable purpose.
 It should also be noted that s.3(11)(k) of the Charities Act 2009 now specifically
provides that ‘the advancement of the arts, culture, heritage or sciences’ is included in
the heading of purposes that are of benefit to the community which should ensure that
any gifts of this nature which are not found to come within the meaning of ‘education’
may still qualify as charitable in nature.
o The concept of what is 'educational' in the sense of what will be recognised as legally
charitable had widened considerably over the years
o In England is it possible to discern two distinct approaches to the question of what
constitutes 'education'
 Narrow Approach
 Re Shaw [1957]
 Facts:
 Concerned a direction under the will of George Bernard Shaw that his
trustees should use his residuary estate to provide research, inter alia,
into the reform of the alphabet
 Held:
 Harman J stated that ‘if the object be merely the increase of knowledge
that is not in itself a charitable object unless it be combined with
teaching or education
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
He found these latter elements were lacking in the case before him
and also concluded that the objects were not beneficial to the
community in a way regarded as charitable in law
 Expansive Approach
 Re Hopkins' Will Trusts [1965]
 Facts:
 A gift to a society to be applied to the task of finding the BaconShakespeare manuscripts was held to be a valid charitable trust
 Held:
 Wilberforce J stated that: ‘the word … must be used in a wide sense,
certainly extending beyond teaching
 He said he would be unwilling to treat Harman J's words as meaning that
the promotion of academic research is not a charitable purpose unless
the researcher was engaged in teaching or education in the conventional
sense as the research in this case was 'inherently inevitable and
manifestly intended' to fall into the public domain
o These two approaches were considered in Re Worth Library [1995]
 Keane J commented that the views of Harman J might not command universal
acceptance today and that it was possible that they would exclude from the legal
definition of charity certain trusts for the encouragement of academic research which
might reasonably be regarded as being for the public benefit
 He said he would prefer the views of Wilberforce J
 Facts:
 IN this case the High Court was called upon to decide whether the approve a cyprés scheme proposed by the trustees of the "Worth Library" which consisted of a
bequest of a large and valuable collection of books originally made in the 18th
century to Dr Steevens' Hospital in Dublin. When the hospital closed in 1988, the
trustees of the library decided to transfer the books to Trinity College Dublin for
safekeeping and appointed the college as trustees in their place. The Eastern
Health Board which had purchased the premises of the hospital that year, took
the view that the library should be returned to its original location and when the
Attorney General gave his consent to the trustee's application to the High Court
for an order framing a cy-prés scheme, the board was joined as a defendant in the
proceedings
 Held:
 Keane J indicated that there were several issues in the case - namely the question
of whether the initial bequest of the Worth Library was in law a charitable trust,
and if so, the type of charitable bequest it represented
 Keane J: ‘[G]ifts for the advancement of education … would embrace, not merely
gifts to schools and universities and the endowment of university chairs and
scholarships: ‘education' has been given a broad meaning so as to encompass gifts
for the establishment of theatres, art galleries and museums and the promotion of
literature and music. In every case, however, the element of public benefit must
be present and, if the benefit extends to a section of the community only, that
section must not be numerically negligible.’
 He rejected the argument that trust might qualify as being one for the
advancement of education on the basis of the lack of an element of public
benefit
The Element of Public Benefit
o A gift for the advancement of education will only qualify as charitable provided that it for
the benefit of the public generally or of an 'appreciably important class' of the public
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o
o
o
o
Re Compton [1945]
 The Court of Appeal held that a trust for the education of the decedents of three
named individuals was not a valid trust
 Lord Greene MR stated: "a gift under which the beneficiaries are defined by reference
to a purely personal relationship to a name propositus cannot on principle be a valid
charitable trust"
Oppenheim v Tobacco Securities trust Co Ltd [1951]
 Facts:
 Concerned the validity of a trust set up to provide for the education of the
children of employees or former employees of a tobacco company and its
subsidiaries
 Held:
 Despite the fact that the number of such employees exceeded 110,000 at the date
of the settlement, it was held that the trust must fail as the distinguishing quality
of the class of beneficiaries was a relationship with a named propositus and for
this reason they could not constitute a section of the public
 Lord Simonds stated: ‘
 These words ‘section of the community’ have no special sanctity, but they
conveniently indicate first, that the possible (I emphasise the word ‘possible’)
beneficiaries must not be numerically negligible, and secondly, that the
quality which distinguishes them from other members of the community, so
that they form by themselves a section of it, must be a quality which does not
depend on their relationship to a particular individual.’
R. (Independent Schools Council) v Charity Commission for England and Wales [2012]
 The issue was referred to in the Upper Tribunal in the following terms:
 "…the political issue is not really about whether private schools should be charities
as understood in legal terms but whether they should have the benefit of the
fiscal advantages which Parliament has seen right to grant charities. It is for
Parliament to grapple with this issue"
 It is also suggested that ‘the fact that fiscal privileges are given underlines the need for
genuine public benefit
 It concluded that a hypothetical school, which had as its sole object the
advancement of the education of children whose families could afford to pay fees,
did not have purposes which provided the element of public benefit necessary to
qualify as a charity. In its view the primary focus in considering whether a school
was operating for the public benefit had to be on the direct benefits it provided,
such as scholarships or other forms of direct assistance but it was permissible to
take into account indirect or wider benefits as a result of the particular way in
which the educational object was carried out by a particular school.
 It stated as follows
 ‘Nobody has suggested that fee-paying schools are not entitled to charitable
status provided that they do enough to promote access whether by way of
scholarships, bursaries or other provision, but paying regard to the need to
charge fees to operate at all. Nobody complains that the schools are
educating fee-paying students; the concern is that they must be seen to be
doing enough for those who cannot afford fees.’
Re Worth Library [1995]
 Keane J had no hesitation in finding that the trust could not qualify as being for the
advancement of education as the library was clearly expressed to be for the use and
benefit of three named office holders in the hospital alone
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Keane J stated that in every case the element of public benefit must be present and if
the benefit extends to a section of the community only that section must not be
numerically negligible.
The effect of such an inflexible approach has been mitigated in both jurisdictions to a
limited degree, by what is referred to as 'founder's kin' decisions
 While a trust simply to educate the donor’s, relatives will not qualify as being
charitable in nature, a gift to the educational institution which contains a direction that
preference be given to the founder's kin may constitute a charitable trust
3.8.3. Trusts for the Advancement of Religion
 Introduction
o Trusts purporting to fall into this category have always been numerous in this jurisdiction.
o Legislative intervention has helped to clarify what had been a most complex and uncertain
area of the law
 Section 3(4) of the Charities Act 2009 provides that ‘[i]t shall be presumed, unless the
contrary is proved, that a gift for the advancement of religion is of public benefit’,
continuing the presumption of public benefit originally provided for by s.45(1) of the
Charities Act 1961, although this presumption will no longer be conclusive. It should be
noted that there are considerable differences in the law as it has been applied in
Ireland and England in relation to these forms of trust and the English textbooks should
be used with caution in this context.
o Gifts in General Terms
 A gift for 'religious purposes' has been held to be charitable on the basis that this will
prima facie mean charitable purposes unless the context suggests otherwise
o Gifts to Ecclesiastical Office Holders
 It would appear that a gift for the benefit of the incumbent of an ecclesiastical office
for time being is charitable, whereas a gift for the particular individual who happens to
hold that office at the time of the gift will not be
 Gibson v Representative Church Body (1881)
 A bequest to the chaplain of the Rotunda chapel at the time of the testatrix's
death and his successors was upheld as charitable
 Donnellan v O'Neill (1870)
 A bequest to a cardinal absolutely for his own use and benefit was held to be a gift
to the latter in his private capacity and not to be charitable in nature
 Thornber v Wilson (1858)
 Kindersley VC described the test as being 'whether the testator designates the
individual as such, or as being the person who happens to fill the office'
o Gifts for the Celebration of Masses
 Delany commented over 60 years ago that "SO much property is devoted to this type
of gift in Ireland that it has become by far the most common object of benevolence"
 Re Hetherington [1990]
 Browne-Wilkinson VC confirmed that a gift for the saying of masses is prima facie
charitable since it is for a religious purpose and contained the necessary element
of public benefit because in practice the masses would be celebrated in public.
 O'Hanlon v Logue [1907]
 Resolved the question of the charitable nature of gifts for the saying of masses,
whether in public or private
 Facts:
 A testatrix devised and bequeathed all her property on certain trusts and
then on trust to sell it and invest the proceeds and pay the income thereof
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from time to time to the Roman Catholic Primate of all Ireland for the time
being for the celebration of masses for the repose of the soles of her late
husband, her children and herself, the will containing no direction that these
masses be said in public or private
 Held:
 The Court of Appeal upheld the charitable nature of the gift and made it clear
that a bequest for the saying of masses, whether in public or not, constituted
as a valid charitable gift
 The issue was put beyond doubt by the enactment of s.45(2) of the Charities Act 1961
 "For the avoidance of the difficulties which arise in giving effect to the intentions
of donors of certain gifts for the purpose of the advancement of religion and in
order not to frustrate those intentions and notwithstanding that certain gifts for
the purpose aforesaid, including gifts for the celebration of Masses, whether in
public or in private, are valid charitable gifts, it is hereby enacted that a valid
charitable gift for the purpose of the advancement of religion shall have effect
and, as respects its having effect, shall be construed in accordance with the laws,
canons, ordinances and tenets of the religion concerned."
 Section 99 of the Charities Act 2009 (which came into force on 1 September 2009)
provides that a person who sells a mass card other than pursuant to an arrangement
with a recognised person (a bishop of the Roman Catholic church or a provincial of an
order of priests) shall be guilty of an offence.
 A challenge to the validity and constitutionality of section 99 was rejected by the
High Court in McNally v Ireland [2011]
Gifts to Religious Orders
 Historically gifts to such orders of a continuing nature might fail at common law if the
purposes of the order were not exclusively charitable. This problem was particularly
evident in relation to contemplative orders on the grounds that they did not fulfil the
necessary public benefit requirement
 Cocks v Manners (1871)
 Facts:
 A testatrix directed that her property should be sold and after the payment of
certain legacies that the proceeds be distributed among certain specified
religious institutions
 Held:
 Wickens VC held that a gift to the Sisters of Charity at a specified place
payable to the superior for the time being was a good charitable gift
 However, the other bequest to a Dominican convent payable to the
superior for the time being was held not to be charitable on the basis
that the community had 'none of the requisites of a charitable
institution' whether the word was used in its popular or legal sense
 Wickens VC commented: ‘It is said … that religious purposes are charitable,
but that can only be true as to religious services tending directly or indirectly
towards the instruction or the edification of the public'.
 He held it was a good non-charitable gift to the superior for the time
being for the benefit of the existing members of the order, on the
grounds that there was nothing to prevent them spending it as they
pleased
 This finding that contemplative religious orders were not charitable in nature was
applied in Ireland
 Maguire v Attorney General [1940]
 Facts:
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 The testatrix directed in her will that a sum of money be spent founding a
covenant 'of perpetual adoration' in a specified place or elsewhere as the
trustees might determine.
 Held:
 In the course of a detailed examination of the issues involved, Gavan Duffy J
stated that it was a ‘grave discredit to the law that there should, in this
Catholic country, be any doubt about the validity of [such a bequest].’
 He said that it had been assumed that the decision in Cocks v Manners
had decided as a matter of law that a testamentary gift to a
contemplative order of nuns could not be charitable on the grounds that
the public were not edified by the gift
 However, Gavan Duffy J regarded it as a decision on a question of fact; that
while at that time the public would hot have been edified by private prayer
unaccompanied by external works of charity, there was no reason for
attributing that same outlook to the public opinion in Ireland at the time
when he was considering the case
 He stated that 'The finding, or assumption, in Cocks v Manners that the
covenant of a contemplative community tended neither directly nor
indirectly towards public edification has no scintilla of authority as a
determinant of the actual position among us'
 He therefore upheld the gift as charitable by employing the reasoning in
O'Hanlon v Logue, without directly overruling Cocks v Manners
 Gilmour v Coats
 Raised doubts about the validity of the decision of Gavan Duffy J
 House of Lords held that a gift to a Carmelite priory which consisted of a
community of cloistered nuns was not charitable as it lacked the necessary
element of public benefit
 Bank of Ireland Trustee CO Ltd v Attorney General [1957]
 Dixon J allayed these fears of uncertainty to an extent when he declined to follow
the decision in Gilmour and held that a gift be applied to the repair and/or
improvement of a covenant of a contemplative order of nuns was charitable
 Section 45 (1) of the Charities Act 1961 set out a conclusive presumption of public
benefit and now s.3(4) of the Charities Act 2009 provides that it shall be presumed
unless the contrary is proved that a gift for the advancement of religion is of public
benefit
Gifts for Churches and Other Miscellaneous Purposes
 Gifts for the erection or maintenance of the fabric of a church building or its fixtures
will be upheld as charitable
 Similarly, gifts for the upkeep of a churchyard or cemetery will be regarded as
charitable in nature as seen in Re Vaughan (1886)
The Element of Public Benefit
 A trust may appear to be of general public benefit but difficulties may arise when its
application is confined to a limited group of persons
 Re Dunlop [1984]
 This approach has been met with academic and judicial approval
 Facts:
 This case required the consideration of the validity of a trust to found or
assist the founding of a home for 'Old Presbyterian Persons'
 Held:
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 He held that the object was, subject to the satisfaction of the requirement of
public benefit, a valid charitable gift for the relief of the aged as it relieved a
need attributable to the condition of the persons to be benefitted
 Carswell J stated if it is recognised that the manner in which the essential
benefit to the public is effected varies as between different categories of
charities, it becomes easier to determine the existence of this element when
examining a trust
 Carswell J stated:
 ‘The essence of the charitable nature [of trusts within Lord
Macnaghten's fourth category] is that the beneficiaries should not be a
private class, nor should any limitations be placed upon the gift which
would prevent the public as a whole from enjoying the advantage which
the donor intends to provide for the benefit of all of the public. It would
be quite consonant with this concept that it should be more difficult for
a trust under the fourth head to satisfy the requirements of public
benefit, and that a bridge to be used only by Methodists should fail to
qualify where a gift for the education of the children of members of that
church might be a valid charity.’
3.8.4. Trusts for Other Purposes Beneficial to the Community
 There has traditionally been a divergence in the position adopted by the judiciary in Ireland and
England in relation to the test which should be applied by the courts in determining whether a
purpose satisfied the requirement of being 'beneficial to the community' to the extent that it
may be regarded as being charitable in law
o In Ireland authorities suggest that a subjective test should be applied and that due weight
should be given to the donor's view of the charitable nature of his bequest provided that
this purpose is not obviously illegal or immoral
 However, the accepted approach in England and Northern Ireland is to adopt an
objective test and allow the court to form an opinion on the issue based on the
evidence before it
o Re Cranston [1898]
 The most important Irish authority in the area
 Court of Appeal was required to decide whether gifts for certain vegetarian societies
were charitable in nature
 The majority of the court upheld the conclusion reached by Porter MR that the objects
of the societies could said to be charitable in the legal sense of the term
 Fitzgibbon LJ stated that the view of the donor should be decisive in determining
whether a gift fell within the category of ‘other purposes beneficial to the
community’, provided that this purpose is not immoral nor illegal
o Re Hummeltenberg [1923]
o Illustrates the English position well
o Russel J referred to the views of the majority judges in the Irish Court of Appeal in Re
Cranston, and stated that although he agreed with them in so far as they declared that the
personal or private opinion of the judge was immaterial, he disagreed with them to the
extent that they suggested that it was for the creator of the trust to determine whether the
purpose was beneficial to the public
 He stated ‘the question whether a gift is or may be operative for the public benefit is a
question to be answered by the court by forming an opinion upon the evidence before
it’.
o Re Worth Library [1995]
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
Keane J's views on this were merely obiter
Keane J: ‘In every case, the intention of the testator is of paramount importance. If he
intended to advance a charitable object recognised as such by the law, his gift will be a
charitable gift. In the case of gifts which do not come within the first three categories,
the fact that the testator's view as to the public utility of his favoured object — e.g.
vegetarianism — is not shared by many people will not of itself prevent it from being,
in the eyes of the law, a valid charitable object within the fourth category, provided it is
not illegal, irrational or contra bonos mores. That, as I understand is the effect of the
majority decision of the Irish Court of Appeal in In re Cranston.’
Specific Types of Trusts which may Qualify as being For Any Other Purpose of Benefit to the
Community
o This category comprises purposes which do not fall within any of the three categories
already considered but which are nevertheless beneficial to the community in a way
recognised by the law as charitable.
o This fourth category of charitable trust was reworded to read ‘any other purpose that it is of
benefit to the community’ in s.3(1)(d) of the Charities Act 2009.
o There are a number of well-established charitable purposes under this heading and s.3(11)
of the Act of 2009 now provides that ‘purpose that is of benefit to the community’ includes
the purposes which are specifically set out. The latter category is stated to include the
following:
 A. the advancement of community welfare, including the relief of those in need by
reason of youth, age, ill-health or disability,
 B. the advancement of community development, including rural or urban regeneration,
 C. the promotion of civic responsibility or voluntary work,
 D. the promotion of health, including the prevention or relief of sickness, disease or
human suffering,
 E. the advancement of conflict resolution or reconciliation,
 F. the promotion of religious or racial harmony and harmonious community relations,
 G. the protection of the natural environment,
 H. the advancement of environmental sustainability,
 I. the advancement of the efficient and effective use of the property is charitable
organisations,
 J. the prevention or relief of suffering of animals,
 K. the advancement of the arts, culture, heritage or sciences, and
 L. the integration of those who are disadvantaged, and the promotion of their full
participation, in society.
Gifts for the Aged, the Disabled and the Sick
o These type of purpose are now specifically referred to in Section 3(11) of the Charities Act
2009
 Which provides that a purpose that is of benefit to the community includes "the
advancement of community welfare including the relief of those in need by reason of
youth, age, ill-heath, or disability" and "the promotion of health, including the
prevention of sickness, disease or human suffering"
 This had already been well-established in English and Irish statute
 A number of cases in this jurisdiction have established that gift for the sick or to
hospitals are charitable in nature
 Re McCarthy's Will Trusts [1958]
 Budd J upheld as valid charitable gifts under this heading a bequest to a society
which has as its principal object the care of the sick making pilgrimages to Lourdes
and a bequest to a hospital at Lourdes which he described as being for the benefit
of the sick and therefore 'clearly charitable'
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
Barrington's Hospital v Commissioner of Valuation [1957]
 Facts:
 The plaintiff hospital sought to challenge the changing of its exemption from
rating valuation on the basis that its purposes were exclusively charitable in
nature within the meaning of s 63 of the Poor Relief (Ireland) Act 1838
 Held:
 While Kingsmill Moore J accepted that 'charitable purposes' within the
meaning of the section has a less extensive meaning than that given to some
words in Pemsel's case, his judgement nevertheless contains some important
statements of general principle
 He found that the term 'impotent' includes sick and injured persons and that
‘a trust for the care of the sick or the maintenance of a hospital is a charity in
the legal meaning of that term.’
 The real issue of the case was whether the fact that the hospital admitted a
number of fee-paying patients could alter this position
 The court also found that the presence in the hospital of a limited
number of patients falling into this category did not detract from the
charitable purpose of the institution.
 Keane J placed a fairly flexible interpretation on the concept of a gift for the benefit of
a hospital in Re Worth Library [1995]
 Keane J concluded that the bequest of the library played a role in the
advancement of the charity represented by the hospital by providing 'a haven of
quiet intellectual relaxation' for the named office holders and as such constituted
a valid charitable bequest for the benefit of the institution
 While he commented that he did not feel that there was any ground for
scepticism as to the capacity of Dr Worth's bequest to play a part in the
advancement of the charity represented by the hospital, his conclusion is difficult
to reconcile with this earlier attitude towards the public benefit question and
undoubtedly extends the prior understanding of what constitute a gift for the
benefit of a hospital
Gifts to Advance Community Development and Promote Harmonious Community Relations and
Related Purposes
o Traditionally it has been accepted that trusts for the benefit of a particualr locality are
charitable in nature
 So, trusts which make provision for the carrying out of public works or the provision of
public facilities in a specified area will be recognised as charitable in nature
Gifts for the Benefit of Animals
o Section 3(11)(j) of the Charities Act 2009 now specifically includes this purpose
o Gifts for the benefit of particular animals are not considered charitable, although they may
be upheld if they are limited to the perpetuity period as a purpose trust. However, gifts for
the welfare of animals generally of for a particular type of animal will be recognised as
charitable in law
o The rationale behind this has been varied
 IN England, the motive of public utility underlie some of the early decisions but more
recently the idea that kindness towards animals tends to promote the morality of
human beings seems to be fundamental to the reasoning employed
 In Ireland, there is evidence in the judgement of Chatterton VC in Armstrong v Reeves
(1890) that the motive of safeguarding the welfare of the animals themselves might be
sufficient to bring such trusts within the charitable definition
 Armstrong v Reeves (1890)
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 A legacy to the Society for the Abolition of Vivisection was held to be
charitable on the grounds that the society was for the public benefit as it
tended to correct and prevent cruelty to animals
 Chatterton VC rejected the argument that there was something illegal in the
nature of the society as one of its aims was to secure the suppression of
vivisection by changing the law. In his view it was instead 'a society for the
purpose of inducing the legislature by legitimate means, by bring public
opinion to bear, to make certain alterations in the law'
 National Anti-Vivisection Society v IRC [1948]
 The House of Lords held that the society was not entitled to income tax relief
on the grounds that its object was a charitable one
 Faced with a finding of fact made in the lower court that the benefit to
humanity in allowing vivisection outweighed the incidental suffering to
animals, the House of Lords concluded that a trust which had been found to
be detrimental to society could not be charitable merely because of the
testator's opinion
 The reasoning behind such a conclusion would seem to be that while the
protection of animals from cruelty is a charitable purpose, vivisection is a
necessary element of medical research and its suppression could not
therefore be considered beneficial to the community
Gifts for Sporting and Recreational Purposes
o In this context it may be necessary to draw a distinction between trusts to promote and
encourage a particular sport of sports, which have traditionally not been regarded as
charitable, and trusts to provide facilities for recreational purposes which will almost
invariably be upheld
o Shillington v Portadown UDC [1911]
 Shows a more flexible approach than that in the UK
 Facts:
 A gift made to an urban council for the purpose of encouraging and providing
'means of healthy recreation' for the residents of an area was found to be
charitable, aided by the application of a subjective test to the question whether
the trust was one beneficial to the community
 Held:
 Barton J stated "The testator's purpose was a charitable or public purpose. He
wished to benefit the residents of his native town and of its immediate
neighbourhood. The benefits which he intended to confer on them were such as
he believed to be of public advantage, the belief was rational and not contrary to
the lands or the principles of morality
o Guild v IRC [1992]
 Facts:
 A testator left the residue of his estate to a town council for use in connection
with the town's sport centre or for some similar purpose in connection with sport
 Held:
 The House of Lords held that on the true construction of section 1(2)(a) of the
Recreational Charities Act 1958 facilities for recreation of other leisure time
activities could be provided with the object of improving people's conditions of
life, notwithstanding that such people were not in a position of relative social
disadvantage or suffering from some degree of deprivation
 It concluded that the testator's bequest would come with the ambit of the
legislation and was therefore charitable in nature on the basis that people from all
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walks of life may have their condition of life improved by the provision of suitable
recreational facilities
o National Tourism Development Authority v Coughlan [2009]
 Charleton J had to consider whether a trust, the subject matter of which was a golf
course, could be charitable in nature.
 At the outset Charleton J acknowledged that the definition of charity in law differs
from that generally applied in the wider community, and he said that while one would
imagine that trusts for sporting objects would be held to be beneficial to the
community, that is now how the law has regarded charitable gifts
 Furthermore, the more exclusive the society is the less likely is it to have as its sole
purpose the betterment of society in general
 He expressed the view that the trust had been set up by the plaintiff in order to
benefit tourism in the relevant area and said that it was difficult to imagine a trust
for the purposes of tourism as being itself of sufficient benefit to the community
to attract charitable status
 He did not regard the activity being carried out by the defendants as being
anything other than sport and recreation. IN the view of the trust, a golf course,
could not be the subject of a charitable trust under ordinary circumstances
 Charleton J stated that ‘[s]port has never been recognised to be an object of
sufficiently wide benefit to the community as to enjoy charitable status’. In his
view a golf course could not be the subject of a charitable trust under ordinary
circumstances.
 The omission of any reference to the advancement of any form of sporting activity in
the list of purposes set out in section 3(11) of the Charities Act 2009 has given rise to
criticism in the light of the importance now attached to engaging in exercise from a
health perspective
Gifts for Political Purposes
o It is well-established that trusts for the advancement of political purposes are not charitable
and as a result gifts for the benefit of specific political parties will clearly not qualify for
charitable status
o Southwood v Attorney General [2000]
 The Court of Appeal held that 'the advancement of education of the public in the
subject of militarism and disarmament' was not a charitable purpose.
 Referring to the dicta of Slade J in McGovern v Attorney General [1982] Chadwick LJ
stated that cases in which the court will regard the element of public benefit as
incapable of proof one way or another include gifts for 'political objects'. He said that
while he would have no difficulty in accepting the proposition that it promotes public
benefit for the public to be educated in differing means of securing peace and avoiding
war, there are divergent views on how best to achieve this aim
 Slade J (in McGovern v Attorney General) stated at p. 340 that a trust for political
purposes cannot be regarded as being for the public benefit. These included trusts
of which a principal purpose was to further the interests of a particular political
party, to procure changes in the law of this or a foreign country or to procure a
reversal of government policy here or abroad
o Re Greenpeace of New Zealand Inc [2015]
 An appeal against the refusal to register Greenpeace New Zealand Inc as a charity
 SC of New Zealand rejected the 'political purpose' exclusion, but voiced concerns about
how a court might assess the public benefit of trusts which purported to promote
peace
 It found that the Court of Appeal had applied an incorrect approach to the
assessment of charitable purposes when it concluded that an object 'to promote
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o
o
o
nuclear disarmament and the elimination of weapons of mass destruction' was
charitable and remitted the application for charitable status for reconsideration
 Elias CJ expressed the view that the achievement of nuclear disarmament would
require a change in policy pursed by certain states and in the dealings of the New
Zealand government with other nations.
 She said that for the reasons discussed by Slade J in McGovern V Attorney
General, the court would have no adequate means of judging the public
benefit of promoting nuclear disarmament and the elimination of all weapons
of mass destruction
 "Whether promotion of these ideas is beneficial is a matter of opinion in
which public benefit is not self-evident and which seems unlikely to be
capable of demonstration by evidence
 Elias CJ noted that a strict exclusion policy ‘risks rigidity in an area of law which
should be responsive to the way society works.’
The principle that a trust which essentially has political objectives will not be regarded as
charitable was confirmed in this jurisdiction in Re Ní Brudair (1979)
 A gift for the benefit of republicans according to the objects of that movement was
they were in the years 1919-1921 was to be too vague and uncertain to constitute a
charitable trust
 Gannon J concluded that taking an overall view of the express directions of the
testatrix and the 'latitude of apparent duty imposed on the trustees' he was satisfied
that there was no charitable intention nor charitable gift in the legal sense in her will
McGovern v Attorney General [1982]
 Slade J analysed the dictum of Lord Parker in Bowman v Secular Society Ltd
 Facts:
 The case concerned the question of whether a trust created by Amnesty
International to achieve certain stated purposes could be registered as a charity.
There purposes included the relief of needy persons who were or had been
prisoners of conscience and their families, attempting to secure the release of
such prisoners, procuring the abolition of torture or inhuman or degrading
treatment or punishment, the promotion of research into the maintenance and
observance of human rights and the dissemination of the results of such research
 Held:
 Slade J concluded that a trust, the main objective of which was to secure a change
in the laws of a foreign country, could not be regarded as charitable because the
courts would have no means of knowing whether such a change would be for the
public benefit and because of public policy consideration based on the risk of
prejudicing relations between the countries concerned
 Slade J also commented that if all the main objects of a trust are exclusively
charitable, the fact that the trustees may have incidental powers to employ
political means to further those objects will not deprive a trust of its
charitable status
Aid/Watch Inc v Commissioner of Taxation (2010)
 The High Court of Australia had to consider whether an organisation involved in
campaigning for effective foreign aid policies through the generation of public debate
was a charitable institution for the purpose of obtaining tax exemption
 The majority of the High Court accepted that generating public debate about the best
methods for the relief of poverty by the provision of foreign aid has characteristics
indicative of charitable status, as these activities were apt to contribute to the public
welfare and did not fall within any area of disqualification from such status
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Biehler (2015) 29 Trust Law Int 97
3.8.5. Cy-Pres Jurisdiction
 Introduction
o Where a gift is made to charity, it may be impossible or impractical to give effect to the
intentions of the donor in the precise terms which he intended
 The cy-prés doctrine, where it applies, allows for the making of a scheme for the
application of such property to other charitable purposes as near as possible to those
intended by the donor
 The rationale behind the operation of this doctrine is that provided a clear charitable
intention is expressed, a gift should not be allowed to fail because the mode of
effecting this intention, if specified, cannot be carried out, or no longer provides the
most useful and effective manner of applying the bequest
 If the trust does not obtain a charitable status cy-prés jurisdiction cannot be
exercised and a bequest may fail as contravening the rule against perpetual trusts
o In practice, an important distinction must be drawn between circumstances where the gift
fails ab initio, in which case the property can only be applied cy-prés where the donor has
manifested a general charitable intention, and cases of subsequent failure where it is not
necessary to show such an intention provided that the donor has made an absolute and
perpetual gift to a charity
 This distinction was well summarised by Murray J in Re Dunwoodie [1977]
 "There is an important distinction between a charitable trust which is initially
impossible or impracticable … and a charitable trust that becomes impossible or
impracticable after his death. As regards the former type, the property involved
will not be applied cy-prés unless the court finds that the testator had a general
charitable intention, but as regards the latter type - usually referred to as a case of
supervening impossibility - the court will direct a cy-prés application whether or
not a general charitable intention on the part of the testator can be found in the
relevant will
 Initial Failure of Charitable Purposes
o In cases where the charitable purposes of a gift fails initially, the doctrine of cy-prés can be
applied 'where in form, the gift is given for a particular charitable purpose, but it is possible,
taking the will as a whole, to say that, notwithstanding the form of the gift, the paramount
intention, according to the true construction of the will, is to give the property in the first
instance for a general charitable purpose rather than a particular charitable purpose…" - Re
Wilson [1913]
o Re Stewart's Will Trusts [1983]
 A liberal approach to the concept of general charitable intention can be discerned in
this case
 Facts:
 The testator left the residue of his estate to a fund established by the NonSubscribing Presbyterian Church of Ireland for the purpose of supplementing the
income of ministers of the church and directed that the income from the residue
of his estate should be used for the support of ministers whose congregations
complied with certain conditions, one of which, relating to the use of unaltered
and unabridged hymn-books, was impossible to fulfil,
 Held:
 Murray J ordered a cy-prés scheme to remove this condition from the trust,
holding that the paramount intention of the testator was to increase the salary of
the ministers of a Christian Church
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 He stated that he could not see how it would be right to regard such an 'illconsidered' provision as an essential part of the charitable scheme
particularly when the result of so doing would make the trust completely
unworkable and frustrate the testator's paramount intention
o Re Prescott [1990]
 Facts:
 A testatrix bequeathed her house to a Dublin parish of the 'Russian Orthodox
Church abroad' and directed that if there were no parishioners or members of the
church living in Ireland that it should be sold and the proceeds applied for the
general purposes of the said church in England. At the time of the testatrix's
death, the parish had ceased to exist and the executor applied to the court for
directions as to the manner in which the proceeds of the sale of the house were to
be distributed
 Held:
 McKenzie J held that the gift of the house had lapsed as it was to a body which did
not exist either at the time of making the will or at the death of the testatrix and
the gift over, being dependent on the validity of this gift, also lapsed
 While McKenzie J accepted that there may be cases where a court can find a
general charitable intention even in the case of a single gift, he concluded
that there was no indication that the testatrix had any intention other than
the benefit the named institution and he held that doctrine of cy-prés
jurisdiction could not be applied
 This appears to be a rather restrictive decision given the terms of the fist over in
the testatrix's will and it would certainly appear to be out of line with other
authorities in this area
o Re Dunwoodie [1977]
 Facts:
 The testatrix bequeathed the residue of her estate on trust for a particualr
Presbyterian Church with a direction that the bequest should be used for the
installation of bells at the church. The committee of the church decided not to
install the bells and the question arose whether the residuary bequest should
devolve as on an intestacy or be applied cy-prés
 Held:
 Murray J held that the trust for the installation of bells but be treated as initially
impossible to fulfil because the consent of the relevant church authority was
essential to the fulfilment of the trust had never been given
 However, he was satisfied that the testatrix had shown a general intention to
further the general purposes of the particualr church and that the initial
failure of the trust in no way invalidated the general trust for the church
which remained perfectly good
 IN the circumstances he ordered that the property should be applied cy-prés
Subsequent Failure of Charitable Purposes
o A gift may be capable of being carried out in the precise terms laid down by the donor or
testator at the time it takes effect but may subsequently fail or become impossible of
impracticable to enforce
 In such circumstance, it is not necessary to establish a general charitable intention
provided that the gift is given 'absolutely and perpetually to charity'
o Re Royal Kilmainham Hospital [1966]
 Facts:
 A hospital founded by Charles II in 1684 for the support and maintenance of old
soldiers of his army and those of his successors gradually ceased to function after
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the setting up of the Irish Free State and the Irish government took control of the
lands and buildings. In 1961, the Royal Kilmainham Hospital Act was passed which
provided, inter alia, for the settling of a scheme for some specified charitable
purpose for the benefit of some classes of members of the defence forces
 Held:
 It was held by Budd J that since it was no longer possible to carry out the founders
intentions the available funds should be applied cy-prés and he directed that they
should be used to benefit the organisations of former members of the defence
forces and the British Army
o Re Worth Library [1995]
 Keane J found that the original bequest of the library in the will of Dr Worth was
'undoubtedly an absolute and perpetual gift' and for this reason could be applied cyprés when the hospital ceased to exist, notwithstanding his finding of no general
charitable intention could be inferred on the facts before him
Legislative Reform of the Cy-Prés Doctrine
o At common law this jurisdiction could only be exercised where it was impossible of
impracticable to give effect to the wishes of the donor in the precise terms which he
intended
 However, the doctrine as it developed at common law was criticised as being too
restrictive in nature and S 47 of the Charities Act 1961 laid down much broader
parameters for the exercises of this jurisdiction, allowing a cy-prés order to be made in
circumstances where there were difficulties in implementing the original terms or
where more effective use might be made of the trust property by framing an
alternative scheme
 (1) Subject to subsection
 (2), the circumstances in which the original purposes of a charitable gift may be
altered to allow the property given or part of it to be applied cy-près shall be as
follows:—
 (a) where the original purposes, in whole or in part—
 (i) have been as far as may be fulfilled; or
 (ii) cannot be carried out, or cannot be carried out according to the
directions given and to the spirit of the gift; or
 (b) where the original purposes provide a use for part only of the property
available by virtue of the gift; or
 (c) where the property available by virtue of the gift and other property
applicable for similar purposes can be more effectively used in conjunction,
and to that end can suitably, regard being had to the spirit of the gift, be
made applicable to common purposes; or
 (d) where the original purposes were laid down by reference to an area which
then was but has since ceased to be a unit for some other purpose, or by
reference to a class of persons or to an area which has for any reason since
ceased, either to be suitable, regard being had to the spirit of the gift, or to
be practical in administering the gift; or
 (e) where the original purposes, in whole or in part, have, since they were laid
down—
 (i) been adequately provided for by other means; or
 (ii) ceased, as being useless or harmful to the community or for other
reasons, to be in law charitable; or
 (iii) ceased in any other way to provide a suitable and effective method
of using the property available by virtue of the gift, regard being had to
the spirit of the gift.
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o
o
Subsection (1)(e )(iii) was considered by O'Hanlon J in Representative Church Body v
Attorney General [1988]
 Facts:
 The plaintiff sought a cy-prés order under section 47 in relation to a collection of
books kept in the Old library attached to St. Canice's Cathedral, Kilkenny. The
plaintiff claimed ownership of the books and wished to sell them and apply the
proceeds to the maintenance and repair of the cathedral. It was argued that the
books were no longer used in the manner envisaged in the original bequests but
the application was opposed by the Attorney general on the grounds that the
collection was an important cultural asset for Kilkenny and that if it were sold
there was no effective legal restriction on it exportation
 Held:
 O'Hanlon H held that the original purposes of the charitable gifts had ceased to
provide a suitable or effective method of using the property available, regard
being had to the spirit of the gift
 He held further that it was permissible to alter the original purposes of the
bequests and to allow the property to applied cy-prés and he made an order
authorising the sale of the collection by the plaintiff so that the proceeds
might be applied to the repair and maintenance of the cathedral
 This decision provides a good illustration of how the original common law
requirements in relation to the exercise of cy-prés jurisdiction have now been relaxed
 While it could be argued that s 47 was applied in an unduly lenient manner in this
case, the requirement that the property be applied in conformity with the 'spirit of
the gift' should ensure that due regard will be given to the wishes of a donor
The equivalent English provision, s.13(1)(e)(iii) of the Charities Act 1993 (now see s.62(1)(e)
(iii) of the Charities Act 2011) was considered by the Court of Appeal in Varsani v Jesani
[1999]
 Facts:
 A charitable trust had been established with the purpose of promoting the faith of
a particular Hindu sect and the charity's assets included a temple in London. The
members of the sect split into two groups and this produced a situation in which
neither group would worship in the same temple as the other.
 Held:
 Carnwath J held that the court had jurisdiction under s 13 of the Charities Act to
make a regulatory scheme and ordered that the sect's assets be held on separate
trusts for the furtherance of the faith as practised by each group
 Morritt LJ concluded that original purposes had ceased to be a suitable and
effective method of using the available property.
3.8.6. Academic Commentary
Biehler, ‘Trusts for the Relief of Poverty and Public Benefit: Time for a Reappraisal?’, (2014) 28 Trust
Law Int 145


Charitable trusts, which are considered to be for the benefit of the public generally, or at least
for an appreciable section of it, have traditionally enjoyed a number of advantages over other
types of trust
o In view of the extensive advantages enjoyed by charitable trusts, it would seem reasonable
to require that such trusts should genuinely be for the benefit of the public in general, or at
least a sufficient section of it
As the Upper Tribunal commented in its judgment in R (Independent Schools Council) v Charity
Commission for England and Wales, the law has developed differently in relation to different
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

‘heads’ of charities and over time some aspects of it have been subject to greater scrutiny than
others.
o Considerable attention has been focussed in recent years on the issue of whether feecharging independent schools should be entitled to qualify for charitable status. Which was
considered in detail in R (Independent Schools Council) v Charity Commission for England
and Wales
However comparatively little attention has been given to another judgment of the Upper
Tribunal delivered shortly afterwards in a further reference by the Attorney General, in which a
determination was sought in relation to a number of issues relating to trusts for the relief of
poverty
o The focus of much of the recent debate in this area has been on requiring a sufficient
benefit to the ‘poor’ even in the context of trusts for the advancement of education. In
contrast there has been little discussion about recognising the anomalous categories of socalled ‘poor relations’ or ‘poor employees’ trusts as charitable in nature or about
challenging the lack of consistency in this area of the law.
Given the relatively recent enactment of the Charities Act 2011, which was arguably a wasted
opportunity in terms of failing to address some of the inconsistencies and anomalies in the
current law, further legislative intervention may be unlikely in the short term.
o However, some of the provisions contained in s 3 of the Irish Charities Act 2009, which has
just come into force in that jurisdiction, should lead to greater clarity and consistency in this
area and are worthy of more attention.
Conclusion
o Morris has commented that ‘the attempt at reform [in the Charities Act 2006] could be
regarded as somewhat half-baked’. She suggests that the key issue of defining public
benefit was sidestepped in that legislation, and this was also the case when the Charities
Act 2011 was enacted.
o Garton is arguably correct in suggesting that ‘there are several reasons for thinking that the
current rules as to when it is acceptable to restrict access to the benefits of a charitable
purpose are not fit for purpose.’ It is difficult to disagree with the view that if the ‘poor
relations/employees’ exception
o It is submitted that the question of why the law still continues to treat the public benefit
requirement in relation to trusts for the relief of poverty more favourably needs to be
addressed.
 The approach adopted in s 3 of the Irish Charities Act 2009, which will effectively
remove the ‘poor relations/employees’ exception, is preferable on public policy
grounds particularly given the wide-ranging tax benefits which attach to what are often
trusts of a private nature in all but name
Biehler, ‘The Political Purposes Exception – Is there a Future for a Doctrine Built on Foundations of
Sand?’ (2015) 29 Trust Law Int 97
 Lord Reid commented in IRC v Baddeley that he thought "it would be generally agreed that in a
democratic country political purposes are among the most important, and perhaps the most
important, of all public purposes.
o However, it is a well-established principle in England and Wales that trusts for the
advancement of political purposes are not charitable in nature and therefore cannot benefit
from the advantages that accrue to organisations recognised as legally charitable
 Drawing the line between trusts which are characterised as being for political purposes and
those which may be classified as being for other purposes, such as the advancement of
education, has always been a difficult task
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In Australia and New Zealand, they have challenged the assumption that charity and politics
are two distinct doctrines that are incompatible
While it is not sought to argue that the so-called "political purposes doctrine', which excludes
such purposes from qualifying for charitable status, should be dispensed with entirely, a strong
argument can be made that a much narrower range of purposes should be excluded from
qualifying for charitable status than is currently the case.
The variations in the applicability and scope of the political purposes doctrine throughout the
common law world, as Harding has suggested, point to the fact that considerations both in
favour of and against it are "complex and difficult to balance'. There are a number of conflicting
considerations that have to be reconciled and there will be an ongoing challenge in seeking to
achieve an appropriate balance in this area.
o At one level there is a degree of overlap between what may be characterised as "charitable'
and "political'. However, as Dunn pointed out some time ago, "a distinction is often made in
this debate between the end, or purpose, of a charity and the means by which that end is
achieved, as a way of differentiating charitable acts from political acts and justifying the legal
restrictions placed upon charities
o While, broadly speaking, a line can be drawn between organisations with predominantly
political objectives and those which engage in political activities in support of purposes which
are recognised as charitable, in practice this distinction can be difficult to draw.
While the political purposes doctrine came to be recognised as an established "rule' in many
common law jurisdictions, when its history and the rationales which underpin it are analysed,
there is no real justification for retaining it in its current broad form
Given that the advancement of human rights is now a recognised charitable purpose in England
and Wales, there is a stronger impetus for change and a basis for incremental development of
the law. For too long, as Dunn has commented, "the regulatory environment has not moved as
far as the social or policy context'.
o It is now time to acknowledge that the political purposes doctrine is built upon foundations of
sand and to suggest that it should no longer continue in its current form
o




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3.9. The Administration of Trusts

Wylie has commented that: "the position of a trustee is an extremely exacting one and, all
too frequently, a thankless one"

Trustees are required to carry out duties, beneficiaries will have an expectation that cannot
be departed from, namely that the trustees will pursue the aims of the trust honestly and in
good faith
o Trustees are only entitled to payment for such endeavours if the trust instrument itself
makes provision for remuneration and they are precluded from making any form of
personal profit out of the affairs of the trust or as a result of placing themselves in a
position where their own interests and those of the trust might conflict

Traditionally, trustees have fallen into two categories;
o Non-professional trustees,
 Who are often family members or close associates of the settlor or testator who
agree to act out of a sense of duty
o Professional trustees
 Usually banks and financial institutions, which undertake the role only in
circumstances where suitable provision is made for their remuneration

Some aspects of the law relating to the administration of trusts are set out in legislation,
primarily the Trustee Act 1893
o The legislation made provision in relation to such issues as appointment, retirement and
removal of trustees and some of the powers of the trustees
o As the Law Reform Commission commented in its Consultation Paper 'Trust Law: General
Proposals', "trustee legislation has not kept up to date with the changing economic and
social nature of trusts"

Any person can be appointed a trustee in this jurisdiction, even a minor, although in practice
it is desirable to appoint a person who will be capable of carrying out the functions required of
him.
o The Law Reform Commission recommended that minors should not be allowed to act as
trustees

There is no minimum number of trustees, although for practical reasons it is more desirable
to have two or more
o In this jurisdiction there is no upper limit on the number of trustees that can be
appointed, but again it is desirable to have a reasonable number for practical reasons
 LRC recommended a minimum of two or a corporate trustee
Appointment, Retirement and Removal of Trustees
 Appointment of Trustees
o The first trustees are ordinarily appointed by the settlor or testator in the trust instrument
and where this is a will, the executors and trustees will often be the same persons. Where
none are appointed or where those nominated predecease the testator or refuse to act,
the court has jurisdiction to appoint trustees.
 The trustees will hold as joint tenants, so where one or more dies the survivors
continue to act as trustees and on the death of the sole trustee, the trust property
will vest in his personal representatives pending the appointment of new trustees
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o
o
The power to appoint new or additional trustees may be exercised by persons nominated
for that purpose in the trust instrument in the circumstances laid down in that document.
 Usually, this power will be framed so that it is exercisable whenever the persons
nominated deem it necessary, but where limitations are imposed these may be
strictly construed
Statutory power to appoint trustees
 A statutory power to appoint new trustees is contained in s.10 of the Trustee Act
1893.
 It provides that this power can be exercised by 'the person or persons
nominated for the purpose of appointing new trustees by the instrument, if any,
creating the trust, or if there is no such person or no such person able and willing
to act, then the surviving or continuing trustees or trustee for the time being, or
personal representatives of the last surviving or continuing trustee"
 The Law Reform Commission recommended that the non-judicial power of
appointment should be extended to include a liquidator where a corporate
trustee is in liquidation and to the beneficiaries where they are sui juris and
entitled to the whole beneficial interest
 This power to appoint new trustees can at present be exercised where a trustee;
 Is dead
 Remains out of the jurisdiction for more than twelve months
 Desires to be discharged from his duties
 Refuses to act
 Is unfit to act, or incapable of acting
 In addition, section 25 of the Trustees Act 1893 confers a power on the court to
appoint new or additional trustees whenever it is expedient to do so and would be
'inexpedient, difficult, or impracticable to do so without the assistance of the court'

Retirement of Trustees
o A trustee may disclaim his appointment and refuse to take up the office at the outset and
if he wishes to do this, to avoid any possible uncertainty he should preferably express his
intention by deed
 However, once a trustee has accepted the office and has failed to disclaim it within a
reasonable time, he can only retire in specified circumstances:
 If there is an express clause in the trust instrument permitting him to do so
 If he receives the consent of all the beneficiaries, provided that they are all sui
juris and between them entitled to the entire beneficial interest in the trust
property
o A statutory provision is made for retirement by virtue of s.11 of the Trustee Act 1893
 Which lays down that provided there will be at least two trustees left to administer
the trust, a trustee may by deed declare that he wishes to retire and if his co-trustees
consent by deed, he will be permitted to do so

Removal of Trustees
o A trustee may be removed from office where express provision is made for this in the trust
instrument or by the beneficiaries where they are sui juris and between them absolutely
entitled to the trust property.
 In addition, a trustee may be removed where the court exercises the power
conferred on it by s.25 of the Trustee Act 1893 to appoint a new trustee where an
existing trustee refuses or is unfit to act.
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The Law Reform Commission recommended that removal without replacement
should not be permitted by statute unless at least two trustees of a corporate trustee
remains.
o The court also has an inherent jurisdiction to remove trustees where they act dishonestly
or incompetently or even where their conduct is deliberately obstructive
 Arnott v Arnott (1924)
 Facts:
 The defendant was removed from the position of trustee to which she had
been appointed on the basis that the business, the subject-matter of the
trust, was to be managed by the plaintiff in circumstances where her
persistent non-cooperation rendered the trust virtually unworkable
 Held:
 Murnaghan J stated that the jurisdiction of the court to remove the trustee
should be exercised if the welfare of the beneficiaries demanded it, even
though no dishonesty or incompetence had been alleged or proved against
the trustee in question
 He stated that the jurisdiction of the court was usually resorted to when a
trustee has mismanaged a trust or has been proved dishonest or
incompetent but the guiding principle to which all others must subordinate
was the welfare of the beneficiaries
A further ground on which a court may exercise its inherent jurisdiction to remove a trustee is
where there is a clear conflict of interest between the trustee's duty to the trust and his own
personal interests,
o Moore v McGlynn [1984]
 Facts:
 The defendant was discharged from further performance of the duties of trustee
where he had set up a rival business in competition with that of which he was
trustee for the benefit of the family of his deceased brother
 Held:
 Although Chatterton VC held that the new business should not be affected by a
trust for the benefit of his brother's estate, he was satisfied that it would be
improper for the trustee to continue in a position where his personal interests
and his duty to the trust might conflict
 He stated that 'should not be continued in a position where his duties and
his self-interest may conflict.'
The fact that the primary issue which the court should have regard to in deciding whether to
order the removal of a trustee is the welfare of the beneficiaries
o Spencer v Kinsella [1996]
 Facts:
 Showgrounds in Gorey were vested in trustees on trust so that they might be
used as a sports ground, park or pleasure grounds subject to conditions as to
payment or otherwise to be prescribed by the trustees. In recent years the
grounds had been used by a local football club and coursing club and the land
had also been used for the grazing of sheep. Complaints against the trustee were
made by the football club who had spent money on the repair and maintenance
of the grounds, and it was alleged that the trustees were neglecting their duties
as the grounds were being allowed to fall into disrepair
 The plaintiffs sought the removal of the trustees on the basis that they had
persistently refused to act when called on to do so and submitted that the
welfare of the beneficiaries required this course of action



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

The remaining trustees argued that they had all times acted in a bona fide
manner and argued that the exercise of their powers should not be
interfered with by the courts unless they had acted mala fides, capriciously
or outside the terms of the trust
Held:
 Barron J accepted that the existing situation could not be allowed to continue
and said that a reorganisation must take place, either with or without the
assistance of the courts
 While he acknowledged that it was difficult to find local people who had no
affiliation with any organisation seeking to use the grounds, he stated that
"in all cases of trust, it is a truism to say that no trustee should allow his
interest to conflict with his duty"
 He concluded that the welfare of the beneficiaries was being affected by the
difficulties and said that in view of the existing conflict of interest some of the
trustees in found themselves in conflict should step down and allow a general
reorganisation to take place
Duties of a Trustee
 Duties on Appointment
o The first duties of a trustee once appointed are to ascertain the nature and extent of the
property in the trust and to ensure that he understands the terms of the trust instrument.
o Trustees are required to act in good faith an d in a responsible and reasonable manner in
performing their functions and they must inform themselves, before making a decision, of
matters that a relevant to the decision
 It is essential that a trustee is aware from the outset of the precise nature of the
powers conferred on him by the instrument e.g. in relation to investment, and he
should seek legal advice if there is any reasonable doubt about the ambit of these
powers.
o Greene v Coady [2014]
 Facts:
 Plaintiffs were potential beneficiaries of a company pension fund. They were
claiming damages for breach of trust against the trustees for accepting an offer
from the company to close the pension fund
 Held:
 Claim dismissed. Judge recognised that the trustees had done their best.
 Charleton J - ‘One matter is clear. On setting up a trust, the funder and the
beneficiaries have an expectation that can never be departed from in law: that the
trustees will pursue the aims of the trust honestly and in good faith. Clarity of
conscience and ability to think both clearly and objectively is thus required on any
decision that impacts on the management of the trust for the benefit of those for
whom it was set up. No matter what is said in a trust deed, this fundamental
obligation can never be departed from.’

Duty to Invest
o Trustees are under a duty to invest the trust property with a view to ensuring a steady
income for the beneficiaries currently entitled to an interest while at the same time
preserving the value of the capital for the benefit of those who may subsequently become
entitled to an interest in the property.
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
o
o
o
o
They are under no obligation to consult the beneficiaries about their investment
decisions, unless required to do so under the terms of the trust
Important principles
 A trustee is only permitted to invest in authorised securities and even where he
adheres to this requirement, he must display impartiality and act in ordinary prudence
in deciding which investments to make
In the absence of an express investment clause, or subject to its terms, a trustee may invest
the trust property in accordance with the statutory scheme laid down in Part I of the
Trustee Act 1893 as amended by the Trustee (Authorized Investments) Act 1958.
 Until recently the ambit of investments authorised by statute remained limited and
was generally confined to investments such as Irish and British government securities,
real securities, stock in semi-state bodies, debentures or debenture stock, in publicly
quoted industrial and commercial companies registered in Ireland which met certain
requirements, and in deposit accounts in specified financial institutions
 However, the scope of the authorised investments has been extended by statutory
instrument and the Trustee (Authorised Investments) Order 1998. These investments
now include units of shares in certain unit trust or collective investment schemes,
specified annuity and life assurance contracts and the equity of companies listed on
the Irish Stock Exchange and other recognised exchanges which meet certain financial
requirements
 The Law Reform Commission recommended the introduction of a revised list of
authorised investments and suggested that consideration should be given to
determining suitable parameters for the selection process of authorised investments
Even where a trustee does not stray outside the ambit of investments authorised either by
the terms of the trust or by statute, he must nevertheless observe certain standards in
carrying out his duties in this regard.
 As O’Connor MR pointed out in Re O’Connor [1913] - ‘However unlimited the power of
investment may be, the trustee remains subject to the jurisdiction of the court. The
trustee has no power to act dishonestly, negligently or in breach of trust to invest on
insufficient security’.
Bartlett v Barclays Bank Trust Co. Ltd [1980]
 Facts:
 The defendant bank was a trustee of a trust, the only assets of which were nearly
all the shares in a family property company. It was thought that the funds might
be more readily raised to pay taxes due on the death of the life tenants if the
company went public and that a public issue would be more successful if the
company was also involved in property investment. One speculative purchase
resulted large losses to the trust fund, and the plaintiff took and action for breach
of trust.
 Ruling:
 The plaintiffs were successful in their claim. Brightman J stated: ‘The cases
establish that it is the duty of a trustee to conduct the business of the trust with
the same care as an ordinary prudent man of business would extend towards his
own affairs. … That does not mean that the trustee is bound to avoid all risk and in
effect act as an insurer of the trust fund. … The distinction is between a prudent
degree of risk on the one hand, and hazard on the other. Nor must the court fix
liability upon a trustee who has committed no more than an error of judgement,
from which no business man, however prudent can expect to be immune.’
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 A further important principle that was confirmed by Brightman J was that in his
opinion a higher duty of care is expected of a professional trustee, such as a trust
corporation which carries on the specialised business of trust management and it
may be liable if it neglects to exercise the special care and skill it professes to
have.
Nestle v National Westminster Bank plc [1993]
 A very important case in which the application of the 'ordinary prudent man of
business' standard has a more disturbing consequence from the point of view of the
beneficiary.
 Facts:
 By virtue of the terms of a settlement made in 1922 by the defendant bank, the
successor to the original trustee, was given wide powers to invest in equities.
However, the bank never obtained legal advice about the scope of its powers of
investment and assumed that they were narrower than they in fact were. The
plaintiff, the remainder beneficiary, contended that the trust fund which was
worth approximately £269,000, when she became absolutely entitled in 1986
should have been worth well over £1 million by then if the fund had been properly
invested.
 Ruling:
 The CoA dismissed the plaintiff's claim and concluded that the plaintiff had not
succeeded in establishing that she had suffered loss.
 Legatt LJ stated that it had not been established that a prudent trustee, knowing
the true scope of the power of investment and having conducted regular reviews,
which the bank had not done, would have invested the fund in such a manner that
it would have been worth more than it was when the plaintiff became entitled to
it.
 The CoA applied the traditional test. As Legatt LJ stated: ‘the essence of the bank's
duty was to take such steps as a prudent businessman would have taken to
maintain and increase the value of the trust fund. Unless it failed to do so, it was
not in breach of trust.'
 Although the Court of Appeal did not find the bank liable, the judges did not agree
with the trial judge's conclusion that the bank had acted conscientiously and
Legatt LJ commented: ‘No testator, in the light of this example, would choose this
bank for the effective management of his investment.'
The is a classic case of the trustee company choosing the easy route by taking absolutely no
risks and in doing so, escaping liability.
 Kenny [1993] has rightly commented that it is a sad reflection on the present state of
trust law that a bank which "no testator … would choose … for the effective
management of his investment' should be found not to be liable for mismanagement
of the trust.
The law in England in this area seems to unduly favour the position of the trustee. Doyle has
commented that there is no reported case in which a trustee has been found liable for a
breach of trust arising from investment within the ambit of that authorised by the trust
instrument of the general law where the trust capital has simply continued to erode as a
result and he concludes that; "the burden of proof facing potentially litigious beneficiaries is
prohibitively high."
Biehler believes that the strict standard which emerged in Bartlett must be developed
further to avoid results such as the one in Nestle.
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Stacey v Branch [1995]
 Irish authority which shows a very similar approach to that taken by the English courts.
 Facts:
 The plaintiff beneficiary brought a claim against the defendant trustee alleging a
breach of trust on the grounds that that the latter had not managed a trust
property with the necessary degree of care and claimed specifically that if this
house had been let over a periods of 14 years rather than maintained by a
caretaker, it would have yielded substantial rental income. The trust deed
conferred on the defendant the power to deal with this property "as he in his
absolute discretion shall see fit" until the beneficiary turned 21.
 Ruling:
 Murphy J made it clear that the words "absolute discretion" would not necessarily
relive a trustee from his duty to excessive reasonable care and prudence.
 However, he was satisfied that the decision to put a caretaker into the
property was one made in bona fide of the exercise of his discretion and he
dismissed the plaintiff's claim.
 Murphy J also considered the nature of a trustee's investment in general terms.
 He stated: ‘In exercising his discretion a trustee must act honestly and must use
as much diligence as a prudent man of business would exercise in dealing with
his own private affairs; in selecting an investment he must take as much care as
a prudent man would take in making an investment for the benefit of persons
for whom he felt morally bound to provide. Businessmen of ordinary prudence
may, and frequently do, select investments which are more or less of a
speculative character; but it is the duty of a trustee to confine himself not only
to the class of investments which are permitted by the settlement or by
statute, but to avoid all such investments of that class as are attended with
hazard.’
 This is a relatively stringent standard to impose on trustees, however, it can also
be said that the degree of care that which a prudent man would exercise in these
circumstances has changed over the years. (In the New Zealand case of Re
Mulligan, Pankhurst J commented "prudence provides a flexible standard, one
which will change with economic conditions and in the light of contemporary
thinking and understanding.)
Where the default on the part of the trustees, as in Nestle and Stacey, is due to lack of
initiative rather than to speculative investment decisions, it would still seem to be
extremely difficult for a beneficiary to succeed in establishing a breach of trust on the part
of the trustee.
 Beneficiaries may legitimately have concerns that the law as it stands does not
adequately protect them from trustees who are inactive or neglectful in their duties.
However, any attempt to change the existing principles will clearly be very difficult
giving the need to discourage trustees from engaging in excessive speculation.
Schedule 1 paragraph (1) of the Trustee Act 2000 (England) applies the statutory duty of
care to powers of investment which requires that trustees ‘must exercise such care and skill
as is reasonable in the circumstances having regard in particular to any special knowledge
or experience that he has or holds himself out as having, and if he acts as trustee in the
course of a business or profession, to any special knowledge or experience that it is
reasonable to expect of a person acting in the course of that kind of business or profession.’
Harries v Church Commissioners [1992]
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English case which addresses the extent to which trustees may pursue an ethical
investment policy in the context of charitable trusts.
 Facts:
 The plaintiffs sought a declaration that the commiserate were obliged to have
regard to the object of promoting the Christian faith and were not to act in a
manner which was incompatible with that object when managing the assets of
which they were trustees. The plaintiffs contended that the commissioners in
making investment decisions attached an overriding importance to financial
considerations and that they were only prepared to take non-financial
considerations into account to the extent that they did not want to top
significantly jeopardise or interfere with the accepted investment principles.
 Ruling:
 Nicholls VC refused the declaration and held that it was axiomatic that charitable
trusts were conserved to further the purposes of the trust which they had
accepted the office of the trustee. He stated that the circumstances in which
charity trustees were bound or entitled to make a financially disadvantageous
investment decision for ethical considerations were extremely limited. He added
that trustees ‘must not use property held by them for investment purposes as a
means for making moral statements at the expense of the charity of which they
are trustees.’
In general, the obligation of the trustees is to make money for the charity, but there are
limits to this in circumstances where it would not be appropriate

Duty to Maintain Equality Between Beneficiaries
o A trustee is obliged to balance what may often be the competing interests of a life tenant
and remainderman in relation to the trust property
o In Re Mulligan, Pankhurst J commented that, "It is elementary that a trustee must act with
strict impartiality and endeavour to maintain a balance between the interest of the life
tenant and the remaindermen. Put another way, a trustee must be as even handed even
handed as between income and capital beneficiaries."
o In seeking to ensure that a fair result is achieved, a trustee may be obliged to convert
certain types of trust investment into an alternative form and this in turn may necessitate
apportionment of the beneficiaries' interests.

Duty to Distribute
o A trustee is under an obligation to ascertain the identity of those who are entitled under the
trust instrument and to take the necessary steps to ensure that the trust property is
distributed in accordance with its terms.
 In England the Trustee Act 1925 provides that trustees may advertise for potential
beneficiaries and provided that certain requirements specified in the section are
complied with, they may proceed to distribute the trust property amongst the
beneficiaries whose identities are known to them
 There is no equivalent statutory power in Ireland
 Although the Succession Act 1965 lays down a procedure whereby personal
representative of a deceased person may advertise for claimants and may
distribute the estate amongst those who have lodged claims within the period
specified
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In circumstances where the whereabouts or continued existence of a beneficiary is
unknown, the court may authorise distribution of the trust property to proceed after a
specified period of time. Such an order is known as a ‘Benjamin order’ and may be made
after a period of seven years
 Re Benjamin [1902]
 Facts:
 On holiday's in France, got summons to London. Was last seen on a train
platform and never seen again. After the death of his father they had to
determine whether he was dead or not
 Held:
 Court held that after 7 years if they haven't been heard from, they can be
presumed dead and the court gave the trustee liability to distribute his share
on the basis that he had predeceased the testator
 Re Green's Will Trusts [1985]
 Applied the principles of Re Benjamin
 Facts:
 Beneficiary was on a bombing raid of Berlin and disappeared in 1943 and was
certified by the Air Ministry as presumed dead. His mother left a trust to the
missing son, there was a clause that if he didn't claim the trust by 2020 a
charity would benefit. Trustee's decided they needed guidance whether they
can pre-emptively give to charity
 Held:
 The court gave the executors liberty to deal with the estate on the basis that
the testatrix’s son had predeceased her and made a Benjamin order.
 Clearly going against the testatrix's wishes
 This decision has been criticised by Luxton on the grounds that such an order was
contrary to the intention of the testatrix
 However, from the point of view of the trustees, bringing an application to
court is undoubtedly the most prudent course of action in such cases and while
the order made may not always accurately reflect the wishes of a testator, it
will at least have the advantage of absolving them from any personal liability
The Law Reform Commission in its Report on Civil Law Aspects of Missing Persons LRC 1062013 recommended reform of the law on presumed death.
The Civil Law (Aspects of Missing Persons) Bill 2016 provides that:
 A presumption of death order may be made by a coroner where he is satisfied that the
circumstances of the person having gone missing indicate that his death is virtually
certain (s.4(3)) or such an order may be made by the Circuit Court where it is satisfied
that the circumstances of the person having gone missing indicate that his death is
highly probable (s.4(4)).
 Section 4(7) also provides that it shall continue to be presumed that a person is dead
where, by reason of absence from the State or otherwise, it remains uncertain for a
period of at least 7 years as to whether a missing person is alive, although an
application for a presumption of death order may be made at any time after a person
has gone missing and is not subject to a minimum waiting period.
 This Bill has not passed yet and is based on the law reform commissions report
An alternative to seeking a Benjamin order is to take out a missing beneficiary insurance
policy.
 Re Evans [1999]
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 This course was followed by the defendant trustee/beneficiary in this case
 Missing sibling hadn't been heard of her for about 30 years and then materialised.
 The taking out the insurance policy was a reasonable and allowable expense
 The policy taken out by the defendant only yielded up sufficient funds to cover
the capital sum to which the plaintiff was entitled.

Duty to Keep Accounts and Provide Information
o A trustee is obliged to keep clear and accurate accounts of the trust property and a
beneficiary is entitled to inspect these accounts although in theory if he wants a copy of
them he must pay for them.
 It is not strictly necessary for a trustee to have these accounts audited although it may
be prudent where the complexity of the trust demands it.
 A beneficiary is entitled to inspect documents relating to the assets of the trust,
although beneficiaries should only be permitted to have access to information relating
to their interest in the trust property, so, for example, a remainderman would only be
entitled to information relevant to capital transactions.
 Should beneficiaries be allowed to see documents relation to the trust?
 Yes, goes back to the issue of accountability.
o Chaine-Nickson v Bank of Ireland [1976]
 Perception before this that only beneficiaries under a fixed trust would have an
entitlement to information but this case allowed potential beneficiaries under a
discretionary trust to have that entitlement
 Facts
 Small family trust. Plaintiff was one of a number of potential beneficiaries under a
discretionary trust. Plaintiff sought an order looking for information about the
administration of the trust.
 Defendants argued that because it was a discretionary trust no one was
specifically entitled to information
 Held:
 Court held that if the plaintiff was entitled to information, then no one was, and
therefore there was no one to whom the trustees were acting for
 Kenny J quoted with approval from ‘The Law Relating to trusts and Trustees’
 “When a beneficiary has a vested interest in a trust fund so that he has a right
to payment of income, the trustees must at all reasonable times at his request
give him full and accurate information as to the amount and state of the trust
property and permit him or his solicitor, to inspect the accounts and vouchers
and other documents relating to the trust”
 Kenny J stated: ‘Legal principle and the one relevant authority [Moore v. McGlynn]
establish that a potential beneficiary under a discretionary trust is entitled to
copies of the trust accounts and to details of the investments representing the
trust funds.’
o Murphy v Murphy [1999]
 Neuberger J referred to the fact that the decision in Chaine-Nickson has been accepted
in the leading English textbooks as stating the correct position on the issue
 Facts
 Two different types of trust - one with a small pool of beneficiaries, the other
where a council was nominated who could chose the potential beneficiaries could
be.
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Held:
 Neuberger J held that the plaintiff was entitled to know the names and addresses
of the trustees of settlements under which he was identified as a specific potential
beneficiary although he was not entitled to such information in relation to
settlements under which he was, along with the rest of the world, merely a
potential beneficiary.
 Neuberger J agreed that in relation to the former type of settlement, a potential
beneficiary does have the right to ask the trustees for ‘information as to the
nature and value of the trust property, the trust income, and as to how the
trustees have been investing and distributing it’.
 Could not accept that with a such a huge potential pool of beneficiaries that
the trustees should be obliged to provide information to all of them. Line has
to be drawn
 Mitchell has commented that these distinctions leave the law in a state of uncertainty
since it cannot be confidently predicted that the courts will hold that a given class of
beneficiaries is so large as to make it undesirable to allow its individual members to
enforce their rights
 However, despite this element of uncertainty, the approach of Neuberger is to be
welcomed to the extent that it clarified the potentially open-ended obligations
which the decision in Chaine-Nickson might have been interpreted as imposing
Schmidt v Rosewood Trust Ltd [2003]
 Tries to address the open-ended nature of potential beneficiaries
 Facts:
 The petitioner sought to disclose documents relating to trusts under which he
claimed discretionary interests both in his own capacity and as the administrator
of his father’s estate.
 Held:
 Privy Council:
 His appeal against the decision to set aside an order for disclosure was allowed
by the Privy Council and the matter was remitted for further consideration by
the High Court
 Privy Council said that there are balancing exercises to be done in the effort to
provide some accountability
 High Court:
 Lord Walker stated that in his view there were three areas in which the court
might have to form a discretionary judgement:
 Whether a discretionary object should be granted relief at all
 What classes of documents should be disclosed, either completely or in
a redacted form
 What safeguards should be imposed to limit the use which might be
made of documents or information disclosed
 Lord Walker stated (at 734-735):
 ‘Especially when there are issues as to personal or commercial
confidentiality, the court may have to balance the competing interests
of different beneficiaries, the trustees themselves, and third parties.
Disclosure may have to be limited and safeguards may have to be put
in place. Evaluation of the claims of a beneficiary (and especially of a
discretionary object) may be an important part of the balancing
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exercise which the court has to perform on the materials placed before
it. In many cases the court may have no difficulty in concluding that an
applicant with no more than a theoretical possibility of benefit ought
not to be granted any relief.’
 The greater the strength of the claimants interest the more likely the court will
intervene
Re Londonderry’s Settlement [1965]
 Facts:
 Family trust, the defendant, daughter of the settlor, was unhappy with how much
she received. She sought a lot of information about the trustee's decision and only
received a small amount. Defendant sought clarification from the court in relation
to the extent of the trustees duty of disclosure
 Held:
 Trustees exercising a discretionary power are not bound to disclose to the
beneficiaries the reasons which motivate them in reaching a decision as to the
manner in which the trust property should be distributed.
 Court of Appeal held that the trustees were not under an obligation to disclose
the reasons for the decisions on the basis that they could not otherwise properly
exercise their confidential role
 As Danckwerts LJ stated (at 935-936):
 ‘the trustees are given a confidential role and they cannot properly
exercise that confidential role if at any moment there is likely to be an
investigation for the purpose of seeing whether they have exercised
their discretion in the best possible manner.’
 However, he continued by saying that this position might be otherwise if a case
were made of lack of bona fides.
 The result in this case has been criticised on the grounds that it allows the trustees to
be effectively unaccountable in the exercise of their decision-making functions in
relation to the distribution of assets of a discretionary trust
 There is considerable merit in the principle that trustees should disclose, at least
in outline, the reasons which motivated them in coming to their decisions, if only
to avoid unnecessary allegations of bad faith
Hayton [2005] Conv 229, 245 has suggested that the courts, taking their lead from Schmidt,
should insist on pension trustees providing reasons for their decisions and be more
prepared to intervene in the affairs of such trusts
Breakspear v Ackland [2009]
 Facts:
 P had a small discretionary trust, when giving discretion to the trustees the settlor
may attach a statement of their wishes known as a 'wish-letter'. Claimants sought
disclosure of the wise-letter
 Suggests that while the principle of confidentiality laid down in Londonderry is still
good law, the increasing significance of accountability may lead to a greater, degree of
disclosure than might previously have been contemplated.
 The case is also significant as it provided the courts with the opportunity to clarify the
status of so-called ‘wish letters’ written by settlors for the guidance of trustees of
discretionary trusts. Briggs J stated that the exercise by trustees of their dispositive
discretionary powers was an essentially confidential process.
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
 Trustees not obliged to give reasons about their decisions but if they do disclose
the reasons those can be subject to review by the judiciary
The Law Reform Commission in its Report ‘Trust Law: General Proposals’ recommended
that beneficiaries should be given a statutory right to be provided with the deed of
settlement and that disclosure of documents other than the deed of settlement should be a
matter for the discretion of the trustees or the courts
Duty Not to Profit from the Trust
o A person who occupies a fiduciary position is not entitled to make a profit from that
position unless expressly authorised to do so (through the trust instrument), or to place
himself in a situation where his interest and duty may conflict.
o Remuneration and Expenses –
 As a general principle, a trustee is not entitled to remuneration for work carried out by
him in his capacity as trustee unless a trust instrument itself makes provision for this.
 Where the trust instrument allows for payment, those clauses will be strictly
construed
 However, the court has an inherent jurisdiction to order that a trustee be remunerated
for his services where no provision for payment has been made in the trust instrument
or to allow a trustee to receive payment in excess of what was originally laid down or
agreed or a trustee may make an arrangement to this effect with all the beneficiaries,
provided that they are sui juris.
 As a general rule a solicitor/trustee is not entitled to charge for his services unless
provision is made for this.
 However, where a solicitor/trustee acts for himself and his co-trustees in litigation
relating to the trust and the costs of his so acting do not exceed the costs which
would have been incurred had he acted for his co-trustees only, he is entitled to
be paid these costs, known as the rule in Cradock v Piper (1850)
 If a solicitor who is also a trustee acts in a professional capacity in enforcing the
trust he entitled to payment of his services, as long as the costs do not exceed
the normal costs
 A trustee is entitled to reimbursed for expenses properly incurred in the administration
and management of the trust
o Purchase of Trust Property –
 Subject to limited exceptions, a trustee may not purchase trust property from himself
and his co-trustees This rule, sometimes referred to as the ‘self-dealing rule’
 Tito v Wadell (No. 2) [1977]
 Megarry VC - ‘The self-dealing rule is (to put it very shortly) that if a trustee sells
the trust property to himself, the sale is voidable by any beneficiary ex debito
justitiae (challenges it), however fair the transaction.’
 Any beneficiary can set aside the sale easily if they act in a reasonable time
 There appears to be an almost irrebuttable presumption in such cases that undue
influence has been exercised and is unlikely to be sufficient to establish that the
trustee was acting honestly, and the price paid was a fair one
 Exceptions:
 If the trust instrument allows it
 Court orders sanctioning it
 Beneficiaries, if all of full age and capacity, can allow it
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A less strict approach has always been adopted by the courts where a trustee purchases
property from a beneficiary rather than from the trust itself, sometimes referred to as the
‘fair-dealing rule’.
 While a presumption of undue influence will arise because of the nature of the
relationship, this is rebuttable, and the onus lies on the trustee to show that the
transaction should be upheld.
Tito v Wadell (No. 2) [1977]
 Megarry VC - ‘[I]f a trustee purchases the beneficial interest of any of his beneficiaries,
the transaction is not voidable ex debito justitiae, but can be set aside unless the
trustee can show that he has taken no advantage of his position and has made full
disclosure to the beneficiary, and that the transaction is fair and honest.’
There is a presumption that the benefit was obtained by undue influence but this
presumption may be rebutted, irrespective of whether the beneficiary has had independent
advice if it is shown that the transfer was the result of the free exercise of an independent
will.
Smyth v Smyth High Court [1978]
 Facts:
 Defendant brother of trustee, had life interest in a field and the interest was given
to the nephew. Nephew agreed to sell his interest to his uncle, the trustee.
Nephew then raised the issue of a trustee of will buying property from the
beneficiary and sought to have it set aside on the grounds of undue influence
 Held:
 Costello J held that the price paid by the defendant was a fair one and that he had
not sought to take advantage of his position as trustee or to influence the
plaintiff's decision to sell. He further concluded that the defendant was not under
any obligation to ensure that the plaintiff received independent legal advice nor
was he under a duty to procure an independent valuation as in his view both the
defendant and his solicitor were correct in their assessment that the price agreed
was a fair one.
 This case turned on its own facts and should not be relied on to support the
proposition that no independent valuation or advice should be sought.
Conaglen has considered the fiduciary self-dealing and fair-dealing rules in some detail
 He acknowledges that the primary difference between the rules appears to be the
relevance od substantive fairness to the validity of a transaction which is caught by the
fair-dealing rule, compared with transactions which fall within the self-dealing rule
where such considerations appear to be irrelevant
 However, he suggests that the supposed distinction between the two rules is not as
clear as set out in Tito v Wadell and that they are most appropriately both understood
as applications of the fiduciary conflict principle
Duty Not to Delegate
o The general principle is summarised in Turner v Corney (1841)
 Lord Langdale MR – “[T]rustees who take on themselves the management of property
for the benefit of others have no right to shift their duty to other persons; and if they
employ an agent, they remain subject to the responsibility towards their cestuis que
trust, for whom they have undertaken the duty”
o The rationale behind the principle of non-delegation of a trustee's duties is that the office is
viewed as one where confidence is placed in the abilities of the particular individual
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appointed and it is therefore expected that he should personally look after the interests of
the beneficiaries.
 However, the principle of delegatus not potest delegare cannot be applied inflexibly to
the position of trustees and it has long been recognised that a trustee may delegate in
situations of ‘legal necessity’ or ‘moral necessity’.
 Provision may be made for delegation in the trust instrument, and provided that the
delegation does not exceed what is authorised it will be permissible.
In addition, it has been recognised that the proper administration of a trust would not be
practicable if a trustee was not free to delegate the performance of certain functions to
professional agents, such as solicitors and brokers.
Section 11 of the Trustee Act 2000 (England) provides that a trustee may delegate except in
relation to how assets are distributed and the power to appoint trustees.
 LRC Report [6.20] and [6.25] made recommendations in similar terms.
Powers of Trustees
 Before the intervention of statute in this area, where a trust instrument was being drafted it was
necessary to ensure that sufficient powers were conferred on the trustees by the instrument to
enable them to carry out their duties in the manner envisaged by the settlor or testator.
o The Trustee Act 1893 confers a number of basic powers on trustees, but this legislation was
only intended to augment the powers conferred by the trust instrument, which will often
still determine the precise extent of the trustees' powers.
 The Power of Sale
o A trustee may be authorised to sell trust property by virtue of an express power contained
in a trust instrument or such a power may be implied in limited circumstances.
 Such as in the circumstances in Howe v Earl of Dartmouth or where they are authorised
by court or statute
o The LRC [11.18] recommended that trustees should be provided with a statutory power of
sale.
 If it is not sanctioned by the trust instrument you need to make a court order
 LCLRA 2009 now provides that subject to the duties of a trustee and any restrictions
imposed by statutes, the law of trusts generally, or any instrument or court order, a
trustee of land has the full power of an owner to convey or otherwise deal with the
land
 The Power of Maintenance
o Express provision can be and often is made in the trust instrument empowering the trustees
to apply the income of the trust property for an infant's benefit.
 Limited statutory powers of maintenance are also conferred on trustees by s. 43 of the
Conveyancing Act 1881 which empowers them to use trust income towards the
maintenance or education of infant beneficiaries in certain circumstances
 This power only applies where the trust property ‘carries an immediate income’
o The LRC recommended that existing powers should be extended.
 SO that trustees are provided with a general statutory power to apply income for the
maintenance of beneficiaries in appropriate cases and that the power of maintenance
should be subject to the proposed statutory duty of care
o Re O'Neill [1943]
 Facts:
 Small family trust, was a provision of maintenance but it was too small. Had to
consider whether it would be appropriate to make a payment from the trust, but
this was an exceptional circumstance
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
Held:
 Maguire P directed that a payment be made out of the trust capital for the
maintenance and education of the testator's children, although he made it clear
that it was a jurisdiction which should only be exercised where it was really
necessary
The Power of Advancement
o While ‘maintenance’ usually refers to the payment of income for the benefit of infant
beneficiaries, the term ‘advancement’ is used to describe payments made out of the trust
capital to a beneficiary before he becomes entitled to an interest under the trust.
o A power to make advancements out of capital may be expressly conferred by the trust
instrument.
 In addition, a statutory power exists under s.11 of the Guardianship of Infants Act 1964
whereby the court can sanction capital payments for the support of an infant
beneficiary where an application is made by the infant’s guardian.
o The LRC recommended the introduction of a statutory power to advance capital and that
the amount advanced should not exceed half of the presumptive or vested share of the
beneficiary
 It recommended that the powers of maintenance and advancement should be subject
to the statutory duty of care.
 It also recommended that the amount advanced shouldn't be more than half of the
trust asset
Liability of Trustees
 Extent and Measure of Liability
o A trustee will be found to be acting in breach of trust if he fails to perform the duties
required of him or if he acts in an unauthorised manner.
o A breach may occur in a variety of circumstances such as:
 Where trust monies are invested in unauthorised investments,
 Where a trustee fails to distribute the trust estate to the beneficiaries in the correct
proportions,
 Where he fails to exercise a proper degree of supervision over the management of the
trust by his co-trustees.
o However, it will be necessary for the beneficiaries to establish conduct which in the opinion
of the court amounts to a breach of trust
o Greene v Coady [2015]
 However, Charleton J suggested that ‘counsels of perfection cannot be applied to the
decisions of trustees’.
 He stated that ‘[i]n making any decision as to the liability of trustees it is not for the
court to be cleverer or better informed or more astute or more enquiring or better in
its judgment than the trustees. The court must also avoid the temptation to listen to
the evidence and to make its own conclusion as to what should have been done by the
trustees on the date of the impugned decision.’
 You shouldn't expect perfection
 Also, don't compare it with what a judge would have done in that situation
o Where a trustee fails to comply with the duties imposed on him by the trust instrument he
is liable to make good the loss to the trust estate if this was caused by the breach of trust,
or where he makes an unauthorised profit for himself even if this does not cause loss to the
trust, he must account for it.
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o
o
o
o
o
o
As a general rule, a trustee is liable only in respect of the breaches of trust which he has
himself committed and not those committed by his co-trustees, so liability is personal and
not vicarious.
 However, this indemnity will not apply where his conduct amounts to wilful default on
his part, and inactivity on the part of a trustee in circumstances where he ought to
have intervened can often be regarded as sufficient grounds for imposing liability.
A trustee is not liable for breaches of trust committed before his appointment unless there
is evidence indicating such a breach which requires him to investigate further.
 When a trustee retires from a trust he remains liable for breaches committed by him
during his term of office and his estate remains liable after his death.
Where a breach occurs shortly after his retirement he will be liable if he retired in order to
facilitate a breach of trust which he foresaw would take place or if he contemplated at the
time that a breach of trust would be effected and decided to retire to avoid direct
involvement.
Head v Gould [1898]
 Kekewich J held that to make a retiring trustee liable for a breach of trust committed
by his successor it must be proved that the breach committed was not merely the
outcome of the retirement and new appointment but was contemplated by the former
trustee when the retirement took place.
 You must be proved to be guilty as an accessory to the fact
 In this case, there was no contemplation and therefore no liability
The measure of a trustee's liability is the loss caused to the trust estate either directly or
indirectly by the breach.
 Where the breach consists of a trustee making an unauthorised investment, the
measure of damages will be the loss incurred by the trust in selling this investment if
this is the course of action agreed on by the beneficiaries. Where trustees improperly
retain an unauthorised investment, they will be liable for the difference between the
price which the property would have fetched if sold at the proper time and the price
actually received for it,
Fry v Fry (1859)
 Facts:
 Testator had given specific instructions to the trustees, the property (a roadside
inn) should be sold as soon as was convenient. Trustees were made an offer of
£900 but didn't take it because they thought they could do better. Railways
started to boom, 9 years later it hadn't been sold and the value of the property
was depreciating. 26 years later it still hadn't been sold and the beneficiaries took
action.
 Held:
 All trustees had died but the estate of the trustees were liable and they were
liable for the difference between the £900 original offer and the current sale price
of the inn
Target Holdings Ltd v Redferns [1996]
 Makes compensatory analysis of the foundation
 Lord Browne-Wilkinson stated that the basic rule is that 'a trustee in breach of trust
must restore or pay to the trust estate either the assets which have been lost to the
estate by reason of the breach or compensation for such loss'.
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
 However, he stressed that there does have to be some causal connection between
the breach of trust and the loss to the trust estate for which the compensation is
recoverable.
 Loss suffered but it couldn't be connected to any breach
AIB Group (UK) plc v Mark Redler & Co [2015]
 A compensatory analysis was also adopted by the Supreme Court of the United
Kingdom
 Followed the reasoning in Target Holdings
 Lord Reed JSC stated - ‘[T]he model of equitable compensation, where trust property
has been misapplied, is to require the trustee to restore the trust fund to the position
it would have been in if the trustee had performed his obligation.’
 He said that the foreseeability of the loss is generally irrelevant, but that the loss mist
be caused by the breach of trust
Liability of Trusts Inter Se
o Liability is personal not vicarious but default by doing nothing may amount to a breach of
trust. Where two or more trustees are involved in a breach of trust, liability is joint and
several, so each is liable in respect of the whole loss although all may not have been equally
blameworthy.
o Bahin v Hughes (1886)
 Facts:
 A testator gave a legacy to his three daughters on trust to pay the income of
plaintiff for life and after her death to her children. One of the trustees and the
husband of one of the trustees got involved in a bad unauthorised investment.
Security wasn't sufficient. Beneficiary, plaintiff, tried to get liability from all the
trustees
 Held:
 The Court of Appeal held that the trustees were jointly and severally liable and all
equally responsible for indemnifying the beneficiaries. In the opinion of the court,
the money had been lost just as much as a result of the default of the inactive
trustees as by the innocent though erroneous action of their co-trustee.
 Cotton LJ – “It would be laying down a wrong rule to hold that where one
trustee acts honestly, though erroneously, the other trustee is to be held
entitled to indemnity who by doing nothing neglects his duty more than the
acting trustee”
o In limited circumstances where a breach of trust has occurred, a trustee may escape
liability or may be entitled to indemnity from a co-trustee:
 Where one trustee has acted in a fraudulent manner
 Where one trustee alone receives the benefit of a breach of trust
 Where one trustee exercised a controlling influence over the others which has
effectively prevented his co-trustees from exercising independent judgement
o However, there is no principle that a trustee may claim an indemnity just because the cotrustee is a professional such as a solicitor where it has not been proved that the former
participated merely in consequence of the advice and control of the solicitor
 Head v Gould [1898]
 Made clear that there is no assumption that simply because someone is a
professional that they are exercising a controlling influence
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 Found as a matter of fact that the solicitor trustee was not exercising a controlling
influence, therefore the co-trustees did not get indemnity
Where one trustee acts in a fraudulent manner he alone will be liable. In addition, where
the beneficiary has instigated, participated in or even consented to or acquiesced in the
breach of trust, the trustee will not be liable for any breach which occurs.
Re Pauling's Settlement Trusts [1964]
 Can a beneficiary consent to a breach of trust? Does that provide indemnity to the
trustees?
 Facts:
 Number of payments out of the trust fund, a family trust with a lot of children,
trustees paid out on various occasions. Mother was pulling the strings. Children
subsequently sued the trustees for acting in breach of trust despite the
beneficiaries requesting the pay out
 Some, but not all, the conduct of the beneficiaries in requesting or pressuring the
trustees to make the pay outs granted the trustees an indemnity
 Held:
 Wilmer LJ stated that if the trustee can establish ‘a valid request or consent by the
beneficiary' to an advance made in breach of trust, that may provide the trustee
with a good defence against any claim by the beneficiary.
Under the Trustee Act 1925 in England there is a statutory defence
 Where it appears that a trustee is personally liable for a breach but has acted ‘honestly
and reasonably’ and ought fairly to have excused for the breach the court ,ay relieve
him wholly or in part from personal liability
Exemption Clauses
 There is some uncertainty about the extent to which an exemption clause in a trust
instrument may protect a trustee from liability.
 Most trust instruments have exemption clauses
 Trustees can act negligently and get off the hook based on these
 Armitage v Nurse [1998]
 Facts:
 There was an extensive exemption clause, excluding liability in all
circumstances except fraud, in the trust instrument
 Held:
 In upholding the trial judge’s conclusion that the trustees were absolved from
liability in the circumstances, Millett LJ expressed the view that it would
exempt a trustee from liability ‘no matter how indolent, imprudent, lacking in
diligence, negligent or wilful he may have been, so long as he has not acted
dishonestly’.
 Millett LJ himself acknowledged that there is a widely held view that
exemption clauses of this nature had gone too far and that professional
trustees should not be able to rely on a trustee exemption clause covering
gross negligence.
 Spread Trustee Co Ltd v Hutcheson [2012]
 Complicated case - related to the law in Guernsey - there was two pieces of
legislation (one which prevented people getting off the hook if they acted grossly
negligent)
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 Key question was if there can be an exclusion clause for gross negligence in
common law
 The majority of the Privy Council found that Guernsey customary law until 1991,
when legislation had altered the position, did not prohibit trustee exemption
clauses excluding liability for gross negligence.
 Lord Clarke agreed with Millett LJ’s conclusion in Armitage that a clause may
be exempt frim liability no matter how the trustee has acted as long as he did
not act dishonestly
 However, Baroness Hale expressed the view that the reasoning in Armitage
was open to serious question. She stated that there was a body of opinion
which considered that the law was not clear, and that it was not ‘an eccentric
or unusual view’ to find that the exclusion of liability for gross negligence was
repugnant to the nature of a trust or contrary to public policy. [137]
Aitken (2011) stated that ‘[i]t seems clear that the blanket protection at present
provided by Armitage itself to the delinquent trustee is likely to come under sustained
attack when a suitable vehicle for the Supreme Court presents itself.’
Loi [2011] suggests that following the divergence of opinion amongst the senior
judiciary in Spread Trustees that the standing of Millett LJ’s controversial reasoning in
Armitage can only be resolved by an authoritative decision of the Supreme Court.
Greene v Coady [2015]
 Facts:
 Plaintiffs were beneficiaries or potential beneficiaries of a company pension
fund and claimed damages for breach of trust against the trustees for
accepting an offer from the company to close its liability on the fund. They
claimed, inter alia, that the failure of the trustees to seek a contribution
demand for a higher sum to make up the funding deficit amounted to wilful
default on their part
 Held:
 The High Court rejected the plaintiffs’ submission that the defendant trustees
were not exonerated by an exemption clause set out in the trust deed.
 Charleton J stated that
 ‘[i]t is always possible for a trust deed to provide in advance for
exemption from anything except the core obligation of trustees to
exercise fidelity to the objects of the trust for the ultimate good of the
beneficiaries through acting honestly and objectively and in good faith.’
 He added that if that was wrong and wilful default simply meant a failure that
was voluntary, then the judgement of Millet LJ in Armitage confirmed for
liability to be established, that default must infringe the core duty of trustees
to manage the trust honestly and in good faith for the benefit of the trustees
In its Final Report on Trustee Exemption Clauses (2006)
 Expressed the provisional view that a trustee remunerated for his services should
not be able to rely on an exemption clause excluding liability for negligence
 Subsequently concluded that it did not consider outright prohibition on
trustee exemption clauses was justified or necessary but suggested some
legislation was required
 The Law Commission recommended that a rule of practice should be recognised
and enforced by regulatory and professional bodies which means that statutory
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
regulation of this area in England is now unlikely and the law in that jurisdiction
remains as set out by Millett LJ in Armitage v Nurse.
 Trustee exemption clauses continue to be upheld although continuing disquiet
amongst both academics and judges about the potential for abuse might suggest
that further judicial intervention to restrict their scope is in some respects
inevitable.
The Law Reform Commission in its Final Report Trust Law General Proposals expressed
the view that there is a need for regulation of trustee exemption clauses so that
liability for breach of the irreducible core obligations of trustees may not be excluded
 It suggested that there was no need to draw a distinction between professional
and lay trustees as the issue would be adequately addressed by the flexible duty
of care which the Commission had recommended
 Professional trustees will be tried to a professional standard, regardless of
legislation
 It further recommended that it should not be possible to absolve a trustee from
liability from his duty to act honestly and in good faith and that the courts should
have a statutory discretion to relieve trustees from liability where they have acted
honestly and reasonably and ought fairly to be excused for the breach of trust.
Variation of Trusts
 AS a general principle a trustee must administer a trust according to the terms laid down in
the trust instrument and any deviation will constitute a breach of trust however, in certain
situations the terms of the trust may be varied without court approval.
o Where the beneficiaries are all of full age and capacity and together are absolutely
entitled to the trust property, they may terminate the trust and require that it be
distributed in accordance with their directions
o Saunders v Vautier (1841)
 One beneficiary, the trust involved accumulating property and only paying out
dividends until the beneficiary reached the age of 25. When the beneficiary reached
the age of 21 a demand was made that the entire trust assets be paid out to him.
Issue when to court
o In practice this principle has been interpreted as meaning that any one or more adult
beneficiaries who are of sound mind and entitled to the whole beneficial interest under
a trust can direct the trustees to transfer the trust property to them and put an end to
the trust.
 Before recent legislative intervention in this area, variation of a trust scheme might be
sanctioned by the court in certain limited circumstances.
o Court approval might be sought to vary the terms of a trust where:
 There were unborn or minor beneficiaries who could not consent to a variation
which might be desirable
 To permit the payment of maintenance to minor beneficiaries
 To avoid the destruction of, or ensure the preservation of, trust property
 To affect a compromise of disputes as between the claims of various beneficiaries.
 Sections 23 and s.24 of the Land and Conveyancing Law Reform Act 2009 effect similar
reforms here.
o Section 24 provides the courts with a new statutory mechanism for approving variations
of the terms of trusts.
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
The application to the court must be made by an appropriate person in relation to a
relevant trust, namely a trustee, a beneficiary or any other person who the court
considers appropriate to approve an ‘arrangement’ for the benefit of a ‘relevant
person’.
The nature of the arrangement must be specified in the application and in this
context ‘arrangement’ means varying, revoking or resettling the trust or varying,
enlarging or restricting the powers of the trustees. For this purpose ‘relevant
person’ means a person who has a vested or contingent interest under a trust but
who is incapable of assenting to an arrangement by reason of lack of capacity, an
unborn person, a person whose identity, existence or whereabouts cannot be
established by taking reasonable measures, or any other person with a contingent
interest.
The court shall not hear an application made to it in respect of a relevant trust
unless it is satisfied that the applicant has given notice in writing of the application
to the Revenue Commissioners and to such persons as may be prescribed by Rules
of Court at least two weeks before the hearing of the application. (s.24(2))
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Topic Four: Equitable Remedies
4.1. Injunctions
Introduction



At common law the usual remedy where a plaintiff succeeded in his action was an award of
damages; this form of relief was often inadequate or inappropriate and equity supplemented
the legal remedies available by developing alternative types of remedy such as the injunction.
An injunction is an order which restrains the performance or continuance of a wrongful act
(prohibitory) or has the effect of requiring the performance of an act (mandatory)
Injunction are granted in situations where damages are often inadequate or inappropriate
o Types of Injunctions
 Prohibitory - restrains performance or continuance of a wrongful act
 Mandatory - has effect of requiring performance of an act
 Less reluctant to grant mandatory injunctions as they impose positive obligations
 Sub-categories
 Interim
 Often sought on an ex parte basis
 Not that often sought - usually people go straight to interlocutory
 Only for very urgent matters
 Interlocutory
 England has moved away from this term
 Referred to an interim injunction
 Most often sought
 Usually on notice to other side
 Assessed on the basis of affidavit evidence
 Used to preserve the civil status quo
 Opened to misinterpretation
 Sometimes about preserving rights rather than what is actual status quo
 Perpetual injunctions
 Might suggest that it goes on indefinitely, but this doesn't have to be the case
- it's just an order made after the trial, could be of a limited nature
o Injunctions are discretionary by nature
4.1.1. General Principles on which Perpetual Injunctions are Granted
 An injunction will only be granted to protect the right of a plaintiff whether a legal right deriving
from common law, an equitable right, a constitutional right, or a statutory right
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The plaintiff must establish sufficient interest in the protection of this right – an injunction
will not be granted to remedy a mere inconvenience or where the interference with the
plaintiff’s rights is trivial
Injunctions, like other forms of equitable remedy, are discretionary in nature.
o So, while a plaintiff may establish the infringement of a right and a prima facie entitlement
to relief he may still be denied this relief on discretionary grounds.
o


The Inadequacy or Inappropriateness of Damages as a Remedy
o Historically, the main reason for the intervention of the Court of Chancery was the
inadequacy or inappropriateness of damages or other remedies at common law.
 Therefore, plaintiffs were required to satisfy the court that the right which he sought to
protect was of such a nature that an award of damages would not leave him in all
respects in as good a position as if he had obtained enforcement of this right
 It will often be considered just to confine a plaintiff to an award of damages where the
wrongdoing of which he complains has ceased and is not likely to re-occur, and where
his loss is quantifiable. i.e. injunctions are granted where it may be difficult to assess
the damages
o Curust Financial Services Ltd v Loewe-Lack-Werk Otto Loewe GmbH [1994]
 Facts:
 Courts had to consider whether the alleged breach by the plaintiff of an exclusive
licensing agreement, consisting of its sub-contracting the manufacture of a
product without prior written consent of the first defendant, should disentitle it to
relief
 Held:
 Finlay CJ expressed the view that ‘difficulty, as opposed to complete impossibility,
in the assessment of … damages should not, in my view, be a ground for
characterizing the awarding of damages as an inadequate remedy.'
 He pointed out that the loss which would be incurred by the plaintiff if no
interlocutory injunction were granted and it ultimately succeeded in the action
was ‘clearly and exclusively commercial loss in … a stable well-established market’
and that it should prima facie be capable of assessment in damages in both terms
of the loss already sustained and future loss
 Just because it is difficult to assess doesn’t automatically mean the plaintiff is
entitled to an injunction
 Supreme Court concluded that the quantum of damages could be assessed and
that no interlocutory injunctions should be granted
 Discussed in maxims of equity – he who seeks equity must do equity

The Conduct of the Parties
o The discretionary considerations which are taken into account by a court in deciding
whether to grant an injunction include factors relating to the conduct of the person
invoking the jurisdiction of the court, and to a lesser extent, the conduct of the defendant.
o In this regard, two of the maxims considered earlier are relevant, namely ‘he who comes to
equity must come with clean hands’ and ‘he who seeks equity must do equity’. While these
maxims should be treated with caution, they do reflect the general principles which operate
in relation to a plaintiff's conduct.
 Where an injunction is sought in furtherance of the perpetration of fraud, a court will
not hesitate to refuse relief but conduct falling short of fraud may also disentitle a
plaintiff to an equitable remedy
o Argyll v Argyll [1967]
 Facts:
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o
o

 Case about the divorce of the Duke and Duchess of Argyll
 There needs to be a casual link between the conduct of the plaintiff and the
action
 Held:
 The Court held that the alleged immorality of the plainitff’s conduct which had led
to the divorce did not deprive her of her entitlement to an injunction to restrain a
breach of confidence by her husband
 Ungoed-Thomas J stated: ‘A person coming to equity for relief … must come with
clean hands, but the cleanliness required is to be judged in relation to the relief
that is sought.’
The application of the maxim ‘he who seeks equity must do equity’ can be seen where the
court will decline to grant an injunction to a party who e.g. seeks to enforce contractual
rights while at the same time refusing to perform his own contractual obligations or to give
an assurance that he will do so in the future,
 Almost always asked to make an undertaking of the court, so you would pay for the
defendant’s expenses if the case is decided against you
Chappell v Times Newspapers [1975]
 Facts:
 Dispute between union and employers. Employer threatened to fire lots of
employees who had not been involved in the industrial action. The employees
were asked to take an undertaking not to get involved in any of the disruptive
action.
 The plaintiffs, who were individual union members, who had not personally been
involved in any industrial action, sought an interim injunction to restrain their
respective employers from terminating their contracts of employment, although
they refused to give undertakings sought by the employers not to engage in
disruptive activity
 Held:
 Court of Appeal refused to grant an award because the plaintiffs had failed to
establish that they themselves intended to act equitably by abiding by the terms
of their employment
 The employees were refused an award because they hadn’t shown they were
going to follow the undertaking
 Lord Denning MR – “it has long been settled at both common law and in equity
that in contract where each has to do his part concurrently with the other, then if
one party seeks relief, he must be ready and willing to do his part in it”
Laches and Acquiescence
o The court may also refuse to grant an injunction on the grounds of laches or acquiescence.
o Spry says that laches arises if two conditions are satisfied:
 “First there must be unreasonable delay on the part of the plaintiff in the
commencement or prosecution of proceedings,
 Secondly, in view of the nature on consequences of that delay it must be unjust in all
the circumstances to grant the specific relief that is in question, whether absolutely or
on appropriate terms or conditions”
o The length of the delay will be judged from the time the plaintiff had sufficient knowledge
of the facts giving rise to the claim or where he had a reasonable suspicion of the
infringement of his rights
o Delay by itself is unlikely to bar a claim for equitable relief but when coupled with other
circumstances, often relating to the conduct of the plaintiff, it may be sufficient to lead to
an equitable remedy being refused.
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o
Acquiescence has been held to be sufficient to bar a claim for an injunction but not for a
remedy in damages
 Shaw v Applegate [1977]
 Facts:
 The defendant purchased property and covenanted not to use it as an
amusement arcade and the vendor subsequently assigned the benefit of the
covenant to the plaintiffs. Three years after the defendant had started to install
amusement machines the plaintiff sought an injunction to restrain the breach
of the covenant
 Illustrates that someone who looked like they had a strong case for injunction was
confined to damage
 Held:
 Found it would be unfair to grant an injunction due to the delay but awarded
damages
 Court of Appeal held that to deprive the possessor of a legal right of that right
on the ground of acquiescence the situation must have been such that it would
be dishonest or unconscionable to seek to enforce it
 Since the plaintiffs had been confused about whether the defendant’s
activity constituted a breach of the covenant, it could not be said that the
plaintiffs were acting dishonestly or unconscionably in seeking to enforce
their rights under the contract when they did, and the court held that
their acquiescence had not been such to deprive them of any remedy at
all
 However, the acquiescence was such to bar the plaintiff from an
injunction
 O’Hare v Dundalk Racing (1999) Ltd [2015]
 Facts:
 Almost 7 years after the events of which the plaintiff complained had taken
place, he brought proceedings against the defendant racecourse operator and
sought, inter alia, injunctive relief restoring his original bookmakers pitch at the
racecourse
 Held:
 Hogan J concluded that this would be manifestly inappropriate for the court to
make this order after such a lapse of time given the prejudice this would cause
a third party
 He said the plaintiff had by his inactivity allowed the admittedly wrongful
transfer of the license to become an accomplished fact as far as the present
pitch holder was concerned
 He declined to grant injunctive relief to the plaintiff but awarded him
damages for breach of contract
4.1.2. Jurisdiction to Award Damages in Lieu of an Injunction
 While originally the Court of Chancery had no jurisdiction to award damages, the Chancery
Amendment Act 1858 (Lord Cairns' Act) authorised the court in all cases where it had jurisdiction
to grant an injunction or an order of specific performance to award damages either in addition
to or in substitution for the other remedies.
o This power to award damages in equity declined in significance after the enactment of the
Judicature Act which conferred jurisdiction on the courts to make an award of damages in
any case where this could previously have been done by the common law courts
 However, it is still necessary to rely on Lord Cairns’ Act in circumstances where no
entitlement to damages lies at common law
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



Shelfer v City of London Electric Lighting Co. [1895]
o Facts:
 An electric lighting company caused considerable discomfort and annoyance to the
lessee of premises by carrying out excavation work. This work casedone of the walls
cracked from the vibrating and the occupiers became sick.
o Held:
 At first instance it was held that while the defendants had created a continuing
nuisance damages should be the only remedy
 At the Court of Appeal Smith LJ laid down the general principle that damages should
only be awarded in lieu of an injunction or specific performance in the following
circumstances:
 ‘(1) If the injury to the plaintiff's legal rights is small,
 (2) and is one which is capable of being estimated in money,
 (3) and is one which can be adequately compensated by a small money payment,
 (4) and the case is one in which it would be oppressive to the defendant to grant
an injunction.’
 These are cumulative, all must be satisfied for it to apply
 Even where these four principles are satisfied, an injunction may still be awarded if the
defendant has acted in reckless disregard of the plaintiff's rights.
 A further point stressed by Lindley LJ is that the court will not allow a wrong to
continue simply because the wrongdoer is able and willing to pay for the injury he may
inflict.
Kennaway v Thompson [1981]
o Facts:
 The plaintiff sought an injunction to restrain power boat racing on a lake near her
house
o Held:
 The Court of Appeal held that the principles in Shelfer's case applied and granted an
injunction.
 Injunction was awarded limiting when the car boats were allowed to race
 It was awarded on the grounds that the injury to the plaintiff was not small or
capable of estimation in monetary terms
Lawrence v Fen Tigers Ltd [2014]
o Noteworthy because every SC judge said the Shelfer principles were too restrictive
o Reservations were expressed about the application of the Shelfer principles by a number of
members of the Supreme Court.
o Lord Neuberger PSC suggested that the approach to be adopted when considering whether
to award damages instead of an injunction should be more flexible and that a mechanical
application of A L Smith LJ’s four tests in Shelfer, and an approach involving damages being
awarded only in ‘very exceptional circumstances’, is both wrong in principle and gives rise
to a serious risk of injustice in practice.
 In his view, ‘the court’s power to award damages in lieu of an injunction involves a
classic exercise of discretion, which should not, as a matter of principle, be fettered.’
o HoL restored the trial judges order and granted the injunction
The leading Irish authority in this area is Patterson v Murphy [1978]
o Facts:
 The plaintiffs sought damages and an injunction arising out of alleged acts of nuisance
caused by blasting and quarrying activities carried out by the defendants in a field
adjoining their house.
o Held:
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Costello J found that these activities did constitute as nuisance and held the plaintiffs
were entitled to an injunction
 The infringement of their rights was most serious; the injury they have suffered
and would continue to suffer would be considerable and he did not believe that
damages would adequately compensate them
 Costello J laid down a number of ‘well established principles' on which the court
exercises its discretion in deciding whether to grant an injunction based on the Shelfer
principles.
 1. When an infringement of the plaintiff’s right and a threatened further
infringement to a material extent has been established, the plaintiff is prima facie
entitled to an injunction. There may be circumstances, however, depriving the
plaintiff of this prima facie right but generally speaking the plaintiff will only be
deprived of an injunction in very exceptional circumstances
 2. If the injury to the plaintiffs’ rights is small, and is one capable of being
estimated in money, and is one which can be adequately compensated by a small
money payment and if the case is one in which it would be oppressive to the
defendant to grant an injunction, then these are circumstances in which damages
in lieu of an injunction may be granted
 3. The conduct of the plaintiff may be such as to disentitle him to an injunction.
The conduct of the defendant may be such to disentitle him from seeking the
substitution of damages for an injunction
 4. The mere fact that a wrong-doer is able and willing to pay for the injury he has
inflicted is not a ground for substituting damages
About the nature of the wrong, on whether you’ll be granted an injunction or damages
4.1.3. Principles Governing Grants of Interlocutory Injunctions
 The essential aim of an interlocutory injunction is to preserve the status quo existing between
the parties to an action until the trial of the issues in dispute can take place and it will have
effect until the final determination of the rights of the parties by the court.
o The rationale behind the grant of such injunctions is primarily the need to protect the rights
of the plaintiff by preserving the circumstances which exist at the time he institutes
proceedings to prevent him suffering irreparable damage by reason of delay between the
instituting of proceedings and trial
 Traditionally, a plaintiff would be granted an interlocutory injunction only if he could establish a
prima facie case i.e. a probability that he would succeed in his claim at the hearing of the action.
o However, the prima facie test was criticised on the basis that it led to confusion as to the
object sought to be achieved by this form of relief and was rejected by the House of Lords
in 1975 in favour of a less rigid requirement
 American Cyanamid Co. v Ethicon Ltd [1975]
o Facts:
 Plaintiff sought an interlocutory injunction to restrain the defendant from marketing
surgical products in an alleged infringement of the plaintiff’s patent
o Held:
 Plaintiff got the interlocutory injunction through a modified test
 Lord Diplock required a plaintiff to show that the claim was not frivolous or vexatious,
in other words that there was ‘a serious question to be tried'.
 Where this was established, the court had to go on to consider the balance of
convenience which involved assessing the probable implications for both parties
should the relief sought be granted or refused and the most important of these
factors was recognised as being the question of the adequacy of damages.
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Campus Oil Ltd v Minister for Industry and Energy (No.2) [1983]
o Approved America Cyanamid principles
 Keane J effectively followed American Cyanamid
o Facts:
 An application of a mandatory interlocutory injunction. Plaintiff claimed a declaration
that the obligation imposed on it by statutory instrument to buy a specified portion of
its petroleum oil supplies from a state-owned refinery was contrary to Art 30 and 31 of
the EEC Treaty
 The issue was referred to the ECJ and the defendants sought an interlocutory
injunction compelling the plaintiff to comply with the terms of the order pending the
determination of the plaintiff’s claim
o Held:
 Keane J granted the interlocutory injunction and held the basis that the probability of
success at trial is not the proper test to be applied
 Instead the applicant must establish that there is a fair question to be determined and
that the balance of convenience lies on the side of granting the injunction
 This finding was upheld in the Supreme Court
Westman Holdings Ltd v McCormack [1992]
o Facts:
 P sought injunction to prevent the D’s from picketing their campus. Decided before the
Industrial Relations Act 1990
o Was there a fair question to be tried on the balance of convenience
o Held:
 It was held by the Supreme Court that an interlocutory injunction granted to the
plaintiffs should continue until the trial of the action.
 While the loss if they were refused an injunction, it would be purely financial, but
the inability of the defendants to pay and the possible immunity of the defendants
it would unlikely get damages
 If the injunction was granted the defendants couldn’t protest
While there is general acceptance of the view that the strength of the plaintiff’s claim should not
be a relevant factor in determining whether an injunction should be granted once it has been
accepted that a fair question has been raised save in an exceptional case, the court will
inevitably consider a plaintiff’s prospects of success to some extent in determining the threshold
question of whether he has established a serious or fair question to be tried.
Chieftain Construction Ltd v Ryan [2008] IEHC 147
o Edwards J stated: ‘It seems to me that any evaluation of a plaintiff’s prospects of success
must necessarily involve a consideration of both the utility and the strength of the point in
question.
 A concession to the assessment of the chance of success of the plaintiff which is not
what it is supposed to do anymore
 It’s not possible to consider whether there is a fair question to be tried with
consideration of these issues
 Moreover, the use of the adjective ‘real’ imports a need to evaluate the ‘reality’ of the
prospects of success and that requires an examination, if it be possible, of the strength
of a plaintiff’s case.’
Gray has pointed out, in so far as Lord Diplock’s formulation suggested that an applicant faces a
series of hurdles and that once he has surmounted them he is guaranteed success, is
unfortunate. As she states, this approach goes beyond the provision of assistance to a judge in
the exercise of his discretion and in facts amounts to a restriction of that discretion
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Debate has surrounded the question of whether the balance of convenience and the adequacy
of damages are two distinct issues for the court to consider or whether the latter is simply as
aspect of the former.
o Metro International SA v Independent News and Media plc [2006]
 Clarke J suggested that whether the criteria are viewed as a single test of the balance
of convenience of which the adequacy of damages is a potentially significant part or as
two separate tests is ‘more a matter of semantics than substance’.
 He commented that in assessing the adequacy or otherwise of damages as a remedy
‘the court can and should have regard to the question of whether the right sought to
be enforced or protected by interlocutory injunction even though it might, in one
sense, be possible to value the extinguishment or diminution of the right in monetary
terms’
Summary of the Basic Test for Interlocutory Injunctions
o Is there a fair question to be tried?
o Where does the balance of convince lie?
o If damages will be an adequate remedy and the defendant has assets, the balance of
convenience will almost inevitably favour rejecting the application for injunction
o If damages will not be an adequate remedy, consider further where the balance of
convenience lie
o In such cases the court must weight one need against each other
Circumstances in which departure from Cyanamid principles justified
 Where an Interlocutory Injunction is Sought in the Context of a Trade Dispute
o Westman Holdings Ltd v McCormack [1992]
 The conclusions reached by the Supreme Court in this case made it clear that the
common law position clearly favoured the employer where proceedings were brought
seeking to restrain picketing by means of an interlocutory injunction. Section 19 of the
Industrial Relations Act 1990 has qualified the effect of common law principles in the
context of trade disputes.
 An employer could usually establish a balance of convenience in their favour and
the courts were often influenced by the potential inability on the part of some of
the defendants to pay damages. In addition, they placed little emphasis on the
loss of the defendant’s right to picket
o Section 19 (2)
 The effect of s.19(2) would appear to be that:
 once a plaintiff establishes an entitlement to an interlocutory injunction by
showing that there is a fair question to be tried,
 the court must consider whether the defendants can establish a fair case that they
were acting in furtherance or contemplation of a trade dispute.
 If they can, the injunction will not be granted;
 If they cannot, the court will go on to consider as it does at common law,
whether the balance of convenience favours the grant of an injunction.
 This statutory provision can only be availed of by defendants where they have
complied with the formalities laid down in the statute in relation to such matters as the
holding of secret ballots and the giving of adequate strike notice.
 Courts took a strict approach to interpreting Section 19 originally
o G. & T. Crampton Ltd v Building and Allied Trades Union [1998]
 A strict approach to the application of s. 19(2) of the 1990 Act was taken in this case
 Facts:
 The plaintiff sought an interlocutory injunction to restrain the defendants from
picketing its premises. The plaintiff argued that a precondition to the operation of
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S 19(2) of the Industrial Relations Act 1990 had not been complied with as there
had been no effective secret ballot
 Held:
 Laffoy J granted the interlocutory injunction
 The Supreme Court was satisfied that the trial judge had been entitled to come to
the conclusion that a condition precedent to the implementation of s.19 had not
been established and upheld the conclusions which she had reached in deciding
the matter on the basis of the principles set out in the Campus Oil case, namely
that a fair question had been raised, that damages would be an inadequate
remedy and that the balance of convenience lay in favour of granting the
injunction
However, in a number of more recent decisions, the courts have found that the provisions
of s.19(2) have been complied with.
Dublin City Council v Technical, Engineering and Electrical Union [2010]
 Facts:
 Plaintiff sought interlocutory injunction to restrain picketing by the defendants
 Held:
 Laffoy J found that the pre-conditions to engaging in industrial action stipulated in
s. 19(2) had been fulfilled by the union before the industrial action had been
commenced and that the union had established a fair case that it was acting in
contemplation or furtherance of a trade dispute.
 No interlocutory injunction granted
Where an Interlocutory Injunction is Sought in Proceedings for Defamation
o A more onerous task faces a plaintiff seeking an interlocutory injunction to restrain
publication of alleged defamatory matter, partly because of a traditional reluctance on the
part of the courts to interfere unduly with an individual's right to freedom of expression, a
right given constitutional protection in this jurisdiction. A further reason for such caution is
that while a statement might appear defamatory, a defendant may intend to plead a variety
of defences at the trial, including those of fair comment and justification, or he may seek to
establish that he is protected by privilege.
o Reynolds v Malocco [1999]
 Facts:
 The plaintiff sought an interlocutory injunction restraining the defendants from
publishing an article which he alleged defamed him
 Held:
 Kelly J acknowledged that if the defendant intends to plead justification or any
other recognised defence, normally an inunction of this type is refused.
 He applied the approach from Cullen v Stanley, in that he did not think that
“a rule which permits a defendant to in effect oust the ability of the court to
intervene by way of inunction in an appropriate case by the simple expedient
of expressing an intention to plead justification at the trial of the action is
consistent with the obligations imposed on the court under the Constitution”
 He concluded that the innuendo to the effect contended for by the plaintiff
was clear and he stated in the absence of a successful plea for justification, a
jury would say the matter complained of was libellous. He was satisfied that
the first defendant’s averment did not go anywhere near demonstrating an
arguable prospect of making the defence
 The interlocutory injunction was granted
 Kelly J stated: ‘A plaintiff in an action such as this, in order to obtain an
interlocutory injunction must show not merely that he has raised a serious
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issue concerning the words complained of but that there is no doubt that
they are defamatory. Furthermore, if the defendant intends to plead
justification or any other recognised defence, normally an injunction of this
type will be refused.’
Cogley v RTE [2005]
 Clarke J stated that in any interlocutory application in which a plaintiff sought prior
restraint on the publication or broadcast of material on the grounds that it was
defamatory it must be asked whether on the evidence available at the interlocutory
stage, it was clear that the plaintiff would ultimately succeed at a trial.
 High hurdle for the plaintiff
 Reiterates what Kelly J held
 Clarke J spoke about the importance of encouraging and preserving public debate on
issues of importance. He commented that one of the underlying reasons for the
reluctance of the courts to grant interlocutory injunctions in defamation cases
stemmed from the fact that if the traditional basis for the grant of such injunctions was
sufficient, there would be a disproportionate effect on public debate and it would be
largely stifled in respect of many issues.
 The key in such cases is to achieve the correct balance between encouraging public
debate and preserving the freedom of the press on the one hand and protecting the
reputation of an individual on the other hand.
Philpott v Irish Examiner [2016]
 Barrett J noted that the provisions of section 33 of the Defamation Act 2009 provide
that
 ‘(1) The High Court…may upon the application of the plaintiff, make an order
prohibiting the publication or further publication of the statement in respect of
which application was made if in its opinion
 (a) the statement is defamatory, and
 (b) the defendant has no defence to the action that is reasonably likely to
succeed.’
 He stated (at [5]) that “by reducing the test to a matter of judicial opinion, our
elected lawmakers, in enacting s.33, appear to have lowered the bar for plaintiffs
in this regard”. – Biehler disagrees here
 However, he later stated (at [27]) that ‘If anything, this Court would note, the
position appears even stronger under s.33. Under that provision, the court must
be of the opinion that an impugned statement “is defamatory”, not that it is
arguably or even unarguably so, but that, in the court’s opinion, it “is” so. This is a
high threshold for a plaintiff to satisfy.’
Overall it is very difficult to get an interlocutory injunction for defamation cases
Where the Trial of the Action is Unlikely
o It is now well established that as a pre-requisite for the application of the guidelines in
American Cyanamid it must be shown that a trial is in fact likely to take place.
o N.W.L. Ltd v Woods [1979]
 This principle was laid down in England by Lord Diplock where he stated:
 ‘Where … the grant or refusal of the interlocutory injunction will have the practical
effect of putting an end to the action because the harm that will have been
already caused to the losing party by its grant or refusal is complete and of a kind
for which money cannot constitute any worthwhile recompense, the degree of
likelihood that the plaintiff would have succeeded in establishing his right to an
injunction if the action had gone to trial is a factor to be brought into the balance
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by the judge in weighing the risks that injustice may result from his deciding the
application one way rather than the other.’
 Pointed out that American Cyanamide wasn’t a case where the injunction would have
prevented the issue going to trial, and it was decided on that basis.
 Different standards should apply where the injunction would resolve the issue
 Biehler says the bar is too high
This approach has been followed by the Court of Appeal in England in a number of cases.
Cayne v Global Natural Resources plc [1984]
 Facts:
 Plaintiff shareholders sought an interlocutory injunction to restrain the defendant
company from implementing a merger agreement and proceeding with the
allotment of shares prior to the company’s impeding AGM. If the injunction as
granted the balance of power in the company would remain the same until after
the crucial vote was taken and the plaintiffs would therefore obtain the result
which they sought; on the other hand if the injunction was refused the votes of
the new shareholders would ensure than the plan of the incumbent directors
succeeded
 Held:
 CoA said that if the plaintiff won at the interlocutory stage it would never progress
to trial
 May LJ stated that in a case such as that before the court where the grant or
refusal of an injunction will effectively dispose of the action in favour of the
successful party, the ‘balance of the risk of doing an injustice' better described the
process involved.
 Not appropriate to apply the American Cyanamide test here
 237 – may be cases where the plaintiffs evidence is strong that it would be unjust
to grant in favour of the plaintiff but those are rare
Jacob v Irish Amateur Rowing Union Ltd [2008]
 Facts:
 Plaintiff sought an order restraining the defendant from preventing him from
competing in a regatta that provided the only remaining opportunity to qualify for
the 2008 Olympic Games.
 Difference in opinion on the facts – but it was clear that if he didn’t compete
he had no chance of rowing in the Olympics
 The timeline was tight, brought 10 days before the closing date. Laffoy J said
there was no way that this case would go to trial
 Held:
 Laffoy J concluded that because of the nature and effect, if granted, of the
injunctions sought by the plaintiff, it seemed that it was very much a case of
balancing the risk of injustice.
 Laffoy J stated that the best that could be done was to consider the question
suggested by May LJ in the Cayne case: whether the plaintiff’s case on the
evidence was so strong that to refuse an injunction would constitute an injustice.
 In her view it was not possible to conclude that the plaintiff’s case on his own
evidence, leaving aside the conflicts, bore that weight and she concluded that
the proper exercise of the Court’s discretion, balancing the risk of injustice,
was to refuse the interlocutory injunction.
 Probably would have succeeded under the American Cyanamide test
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4.1.4. Mandatory Injunctions
 While a prohibitory injunction requires a defendant to refrain from doing certain acts, a
mandatory injunction is one which compels a defendant to carry out an obligation or to perform
a specified act. In practical terms, the making of a mandatory order will usually impose an
additional degree of hardship or expense on a defendant and such factors may often influence a
judge in deciding how to exercise his discretion.
 Mandaory Injunctions can be divided into two types:
o Restorative
 Granted more frequently. Requires the party to whom it is directed to put right the
consequences of his actions
o Enforcing
 Requires the performance of some positive obligation, usually continuing in nature
 To succeed in obtaining a mandatory injunction it must be possible to specify with a sufficient
degree of particularity precisely what action is required to comply with its terms and it must be
quite clear what the person against whom the injunction is made is required to do or refrain
from doing
o Redland Bricks Ltd v Morris [1970]
 Facts:
 Land owned by the respondents, who carried out the business o strawberry
farming, was affected by subsidence caused by quarrying work undertaken by the
appellant on adjoining property. It was estimated that the cost of remedying the
subsidence was wholly disproportionate to the land affected
 Held:
 HoL decided to lift the mandatory order that had been granted and awarded the
respondents a lump sum
 While the prohibitory orders were upheld
 Lord Upjohn stated: ‘A mandatory injunction can only be granted where the
plaintiff shows a very strong probability upon the facts that grave damage will
accrue to him in the future … It is jurisdiction to be exercised sparingly and with
caution but, in the proper case, unhesitatingly.’
 In his view that unlike in the case of a prohibitory injunction, the cost of the
works which the defendant would be required to carry out must be taken
into account except where the defendant has acted unreasonably
 While these latter principles seem reasonable, Lord Upjohn’s insistence on establishing
a “very strong probability … of grave damage” has been criticised and it has been said
that this view cannot be accepted without qualification
 Spry suggests the following alternative, that “whenever an injury to the plaintiff is
shown, being an injury that might. Before it took place, have been enjoyed by a
prohibitory injunction if the court thought fit, a mandatory injunction may be
granted unless consequent prejudice to the defendant is so disproportionate that
the course is unjust in all circumstances”
 While there may be no difference in theory between the principles which govern the grant of
prohibitory and mandatory injunctions at trial, the reality is that a court may be reluctant to
grant a mandatory injunction unless it is satisfied that ‘the chances that it will turn out to have
been wrongly granted are low’ – Lord Hoffman in National Commercial Bank Jamaica Ltd v Olint
Corporation Ltd [2009]
 Where mandatory injunctions of an interlocutory nature are sought, the test of ‘a ‘strong case’
that the plaintiff is likely to succeed at trial has tended to be applied. The balance of convenience
is unlikely to lie in favour of granting mandatory interlocutory relief save in fairly exceptional
cases and it is clear that the courts are more reluctant to grant an interlocutory injunction when
it is of a mandatory as opposed to a prohibitory nature.
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Shepherd Homes Ltd v Sandham [1971]
 Case involving housing estate, developed to be an open-plan housing estate. Individual
broke a covenant and built a fence
 High standard
 Megarry J made it clear that the court is far more reluctant to grant a mandatory
injunction than a prohibitory injunction of an interlocutory nature and said that the
‘case has to be unusually strong and clear before a mandatory injunction will be
granted’ (at 349) and the court must ‘feel a high degree of assurance that at the trial it
will appear that the injunction was rightly granted’. (at 351)
o Films Rover International Ltd v Cannon Film Sales Ltd [1987]
 Like Shelbourne decision
 Facts:
 Related to film industry, injunction was being sought requiring materials about a
film distribution agreement. Mandatory injunction granted
 Held:
 A more flexible approach was adopted subsequently by Hoffmann J where he said
that the ‘high degree of assurance’ test does not have to be satisfied in every case
before an interlocutory injunction of a mandatory nature may be granted.
 Hoffmann J pointed out that in an exceptional case, where withholding such an
injunction would carry with it a greater risk of injustice than granting it, even
where the court does not feel a high degree of assurance about the plaintiff’s
likelihood of succeeding at the trial, there cannot be any rational basis for
withholding the injunction (at 681).
o National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009]
 Formulated a unified test for both prohibitory and interlocutory injunctions which
focuses on avoiding causing irremediable prejudice
 Not followed in Ireland
 Lord Hoffmann stated: ‘In both cases, the underlying principle is the same, namely,
that the court should take whichever course seems likely to cause the least
irremediable prejudice to one party or the other …What is true is that the features
which ordinarily justify describing an injunction as mandatory are often more likely to
cause irremediable prejudice than in cases in which a defendant is merely prevented
from taking or continuing with some course of action:
 This is a logical approach and it removes the uncertainty which the need for the
application of different tests has given rise to
 Given the likely consequences of the grant of an interlocutory mandatory order
‘irremediable prejudice’ is far more likely to be caused to a party against whom
such an order is made and to this extent it is correct to continue to assert that it
will significantly more difficult to get mandatory injunctions’
 However, Lord Hoffman’s solution neatly avoids the difficulties of grappling with
alternative tests depending on whether a mandatory of prohibitory injunction is
sought
But this is no more than a generalisation. What is required in each case is to examine what on
the particular facts of the case the consequences of granting or withholding of the injunction is
likely to be.’
The test to be applied where an application is made for a mandatory interlocutory injunction in
this jurisdiction now seems reasonably settled although there have been inconsistent
approaches applied over the years.
o In some cases a relatively low threshold based on the Campus Oil guidelines has been
imposed on plaintiffs e.g. by Carroll J in her judgment in A. & N. Pharmacy Ltd v United Drug
Wholesale Ltd [1996] 2 ILRM 46. However, in many other High Court decisions following
o
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Campus Oil, it has been stressed that mandatory interlocutory injunctions will only issue in
very limited circumstances.
o Boyhan v Tribunal Of Inquiry into the Beef Industry [1992]
 Denham J described a mandatory injunction as a ‘powerful instrument’ and said that in
seeking ‘this exceptional form of relief … it is up to the plaintiffs to establish a strong
and clear case — so that the court can feel a degree of assurance that at a trial of the
action a similar injunction would be granted.’
o Lingham v HSE [2006]
 Supreme Court decision – ex tempore
 Employment injunction case, looking for a prohibitory injunction but was mandatory in
substance. Looking to restrain a dismissal from employment
 Court recognised that it was actually a mandatory injunction
 Fennelly J stated that: ‘in such a case it is necessary for the applicant to show at least
that he has a strong case that he is likely to succeed at the hearing of the action.’
 Higher hurdle
o Okunade v Minister for Justice, Equality and Law Reform [2012]
 Clarke J reaffirmed that where the order sought in a case involves something which, in
substance, is a mandatory order, the courts have required the plaintiff to establish not
just a fair or arguable case but rather the higher standard as set out by the Supreme
Court in Lingham.
 Strong case test
 He acknowledged that it could be said that there is something of a tension between
the practical requirement which suggests that the court should not engage in a
detailed analysis of the facts or complex legal questions at an interlocutory stage, on
the one hand, and the requirement that a higher standard than ‘fair issue to be tried’
be established.
 Reality is that where there is a higher threshold, the strength of your case is going
to be probed more
 However, he said that even in those cases where a higher threshold may need to be
met, that requirement does not involve the court in a detailed analysis of the facts or
complex questions of law, ‘[r]ather it obliges the plaintiff to put forward, in a
straightforward way, a case which meets the higher threshold.’
A slightly different approach, along the lines of that adopted by Hoffmann J in Films Rover, has
been adopted by Kelly J in Shelbourne case
o Shelbourne Hotel Holdings Ltd v Torriam Hotel Operating Co. Ltd [2010]
 Trying to ensure the court was going to make the wrong decision
 Facts:
 Plaintiff looking for access for records from the defendants who were working
under a management agreement
 Held:
 Kelly J stated: ‘Faced with these conflicting approaches and pending a final
determination of the issue by the Supreme Court, I am much attracted by the
approach of Hoffmann J. (as he then was) in the Films Rover case [1987] 1 WLR
670 where he took the view that the fundamental principle on interlocutory
applications for both prohibitory and mandatory injunctions is that the court
should adopt whatever course would carry the lower risk of injustice if it turns out
to have been the ‘wrong’ decision. Whatever standard applies it is clear that the
grant of mandatory interlocutory relief is exceptional. In many if not all cases, the
mandatory nature of the relief will also be a factor to be taken into consideration
when the balance of convenience falls to be considered.’
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 Kelly J concluded that he was satisfied that on the basis of the evidence that the
plaintiff had achieved the higher of the two tests, namely the demonstration of a
clear case and that damages would not be an adequate remedy were the plaintiff
to be further denied access to the information sought
 He continued that the balance of convenience lay in favour of granting rather
than refusing the injunction and therefore he granted it
Mandatory Interlocutory Injunctions Summary
o Strong case standard (Lingham) likely to be imposed
o Court should exceptionally not insist on higher onus of proof being met where withholding
an interlocutory injunction would carry with it a greater risk of injustice than granting it
(Films Rover)
o Court should adopt whatever course would carry the lower risk of injustice if it turns out to
have been the ‘wrong’ decision (Shelbourne) or which causes least irremediable prejudice
(National Commercial)
o Balance of convenience is unlikely to lie in favour of granting mandatory relief
4.1.5. Quia Timet Injunctions
 This type of injunction is preventative in nature and will be exercised either where a person
threatens and intends to do an unlawful act or where the plaintiff's rights have already been
infringed and he alleges that this infringement will be repeated.
 Main scenarios where this is sought
o Where no harm has been done yet
 Relevant as a matter of evidence – more difficult to establish sufficient risk. Have to
consider how likely the injury will in fact occur and how severe the apprehended
damage is likely to be
 Where your rights have already been infringed
 Redland Bricks v Morris [1970]
o See above
o Lord Upjohn – “to prevent the jurisdiction of the courts being stultified equity has invented
the quia timet action, that is an action for an injunction to prevent an apprehended legal
wrong, though none has occurred at present, and the suppliant for such an injunction is
without any remedy at law”
o The principles applicable to the grant of a mandatory quia timet injunction were set out by
Lord Macnaghten in this case
o Lord Upjohn stated that where a mandatory quia timet injunction is sought, the plaintiff
must show a very strong probability that grave damage would accrue to him in the future
and that unlike in the case of a prohibitory injunction, the cost of the works which the
defendant would be required to carry out must be taken into account except where the
defendant has acted quite unreasonably.
 High standard
 Spry suggests that the same equitable principles are applied whether or not there has been a
breach of the plaintiff’s rights or merely a threatened violation of these rights
o However, as he points out, the fact that no breach has yet occurred is of relevance as it may
be difficult to establish that there is a sufficient risk of future injury to jutify the immediate
grant of an injunction
 Attorney General (Boswell) v Rathmines and Pembroke Joint Hospital Board [1904]
o Facts:
 Plaintiff sought an injunction to restrain the defendant from building a smallpox
hospital, local residents were unhappy. There was conflicting evidence about the
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suitability of the site and the risk of the spread of the disease. It was an application of a
quia timet nature but had a very severe consequence
Held:
 Injunction was refused on the grounds that no real danger had been proved
 Fitzgibbon LJ stated: ‘To sustain the injunction, the law requires proof by the plaintiff of
a well-founded apprehension of injury — proof of actual and real danger — a strong
probability, almost amounting to moral certainty, that if the Hospital be established, it
will be an actionable nuisance.’
 Very high standard
This standard was not met in this case
Szabo v ESAT Digiphone Ltd [1998]
o Facts:
 AT the time there were disquiet about building mobile phone masts, so gov. put them
on the grounds of police stations. Police stations were often near primary schools and
parents were concerned about the impact on the children’s health and sought quia
timet injunctions to prevent the erection of the mast next to a primary school
o Need to show a proven substantial risk of danger to get the order
o Held:
 Geoghegan J said that he would adopt the treatment of the subject in Spry on
Equitable Remedies in which the author made it clear that there is no difference in the
legal principles to be applied to interlocutory quia timet injunctions and any other kind
of interlocutory injunction.
 However, as Spry pointed out in his consideration of quia timet injunctions in
general, it should not be thought that it is never material that no breach of the
applicant's rights has taken place at the time of the hearing of the application and
if no breach has taken place, it may be more difficult to establish, as a matter of
evidence, that there is a sufficient risk of a future injury to justify the immediate
grant of an injunction.
 Where there is no proven causal link, and there is no existing damage you
face a large evidential burden
 Held it was highly improbable that they would cause any injury to the children and no
injunction was granted
The principles laid down by Geoghegan J in Szabo have been applied in more recent decisions.
Ryanair Ltd v Aer Rianta cpt [2001]
o Facts:
 About The imposition and collection and charges in Dublin airport
o Held:
 Kelly J referenced Geoghegan’s decision in Szabo
 Kelly J stated that in cases of this nature the court must balance the magnitude of the
evil against the chances of its occurrence.
 He concluded that in the case before him there he was no satisfied that there was a
sufficient risk of future injury to the applicant to justify the grant of an injunction
In order to be awarded a quia timet injunction, you must prove:
o That there is a proven substantial risk of damage
o There is significant risk of this happening
4.1.6. Circumstances in which an Injunction will be Granted – Employment Cases
 An injunction may be a significant remedy where the positive obligation in the contract is not
specifically enforceable, although in certain circumstances, particularly in the context of
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contracts for personal services, it is accepted that an injunction should not be granted by the
court where this would indirectly provide for specific performance of the positive terms of the
contract.
This principle is well illustrated by the decision of Lord St Leonards in Lumley v Wagner (1852)
o Facts:
 Opera singer signed contract that she would sing in one theatre and would refrain from
singing elsewhere for 3 months. A rival theatre operator offered Wagner more money
to break her contract and sing in his theatre. Lumley sued for injunction to stop
Wagner from singing
o Held:
 Injunction granted because the Court held that it was only stopping her from singing
not forcing her to sing at the plaintiff’s theatre
Warner Brothers Pictures, Incorporated v Nelson [1937]
o Facts:
 Betty Davis was sued under her real name, she signed a deal with Warner Brothers
and couldn't work with any other studios. Betty Davis was one of the biggest stars of
the time, she tried to break the contract with Warner Brothers because she thought
she should be getting paid more. Warner Brothers sought an injunction to stop her
from working at any other studio
o Held:
 Injunction granted
 Branson J rejected the argument that the order made amounted to an indirect form of
specific performance and said that while the defendant might be tempted to perform
the contract in view of the fact that alternative work would be considerably less
lucrative, she would not be driven to do so.
Page One Records Ltd v Britton [1968]
o Facts:
 Plaintiffs had contracted with a group called the Trogs that they would be their
manager for 5 years and the Trogs agreed not to hire anyone else as their manager.
Plaintiffs sought an injunction to prevent the employment of another manager
o Held:
 Injunction not granted
 Stamp J said that to grant an injunction would be tantamount to ordering specific
performance of a contract of personal services and it would be wrong to put pressure
on the defendants to continue to employ someone in a fiduciary capacity in whom they
had lost confidence.
The Court of Appeal has confirmed that an injunction should not be granted if its indirect effect
would be to compel performance of a contract for personal services.
Warren v Mendy [1989]
o Facts:
 Boxer agreed that he wouldn’t be managed by anyone other than the plaintiff for 3
years, but the boxer agreed to be managed by the defendant. Plaintiff sought to have
an injunction against the defendant from inducing a breach. The effect of the
injunction would be to prevent the boxer from having any other manager until after
the 3 years or not pursue their career for that time
o Held:
 Nourse LJ stated: ‘the following general principles are applicable to the grant or refusal
of an injunction to enforce performance of the servant's negative obligations in a
contract for personal services inseparable from the exercise of some special skill or
talent. In such a case the court ought not to enforce the performance of the negative
obligations if their enforcement will effectively compel the servant to perform his
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positive obligations under the contract. Compulsion is a question to be decided on the
facts of each case, with a realistic regard for the probable reaction of an injunction on
the psychological and material, and sometimes the physical, need of the servant to
maintain the skill or talent.’
o Commentary:
 McCutcheon has stated that ‘the practical consequence of Warren v Mendy is to make
it highly improbable that negative injunctions will be granted in sports cases, at least
where the contract is for anything other than a short duration’ and has expressed the
view that the approach of the English courts may be too lenient.
 He points out that the North American courts have placed a greater emphasis on
ensuring that contracts of this nature are honoured and that individuals do not
reengage on their commitments simply because a more lucrative opportunity is
presented to them
A limited exception to the general principle that employer and employee should not be forced to
work together has been recognised where a relationship of mutual trust and confidence still
exists between them,
Hill v C.A. Parsons & Co. Ltd [1972]
o Injunction granted against an employer to restrain an alleged wrongful dismissal after an
employer had reluctantly been forced to terminate the contract of employment of an
engineer who had refused to join a trade union
o The majority of the court were satisfied with this decision because a relationship of mutual
trust and confidence still existed between the parties
Employment Injunctions in this Jurisdiction
o The courts in this jurisdiction have accepted that even where the relief sought is set out in
prohibitory terms, where it is mandatory in effect, a plaintiff will have to meet the strong
case requirement necessary for obtaining an interlocutory injunction of a mandatory
nature,
o Lingham v Health Service Executive [2006] E
 Temporary contract as a surgeon was terminated
 Sought mandatory injunction but didn’t meet strong case requirement and thus failed
o Bergin v Galway Clinic Doughiska [2008]
 Involved someone senior in the company, refused order requiring the defendant to reengage the plaintiff in jobs and restrained defendant to temporarily filling the plaintiffs
position but did allow order preventing the full termination of the employment
 Relationships of the parties had broken down and therefore it was no realistic to
force them to work together
 Clarke J stated: ‘I have, therefore, come to the view that in any case in which an
employee seeks to prevent a dismissal or a process leading to a dismissal, as a matter
of common law, and in whatever terms the claim is couched, the employee concerned
is seeking what is, in substance, a mandatory injunction which has the effect of
necessarily continuing his contract of employment even though the employer might
otherwise be entitled to terminate it. In those circumstances it is necessary for the
employee concerned to establish a strong case in order to obtain interlocutory relief.’
 The situation is not helped by the facts that most of these cases do not go to trial and
are decided in the interlocutory phase
o The significance of an ongoing relationship of mutual trust and confidence may be relevant
to a greater or lesser extent depending on the nature of the relief sought. It is well
established that where this relationship has broken down the courts will decline to make an
order of an interlocutory nature requiring reinstatement, although in limited circumstances
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orders have been made in such cases restraining the implementation of a purported
dismissal.
Coffey v. William Connolly & Sons Ltd [2007]
 Granted interlocutory injunction preventing defendant from giving effect to the
dismissal but didn’t allow order compelling the plaintiff to keep the plaintiff in work
 Lower onus deemed acceptable
Wallace v Irish Aviation Authority
 Plaintiff got order to be re-hired, job was of routine nature and she reached the high
standard. Hogan J satisfied that she should be taken off administrative leave
 High onus met but Hogan J didn’t say he was insisting on it
 Many interlocutory injunctions sought in an employment context are mandatory in
substance although framed in prohibitory terms and if so, the “strong case”
requirement is likely to apply.
Even where this requirement is met (e.g. in Bergin), there will be a reluctance to force the
parties to continue to work together where the relationship of trust and confidence has
broken down.
 Type of relief sought – prohibitory or mandatory – serious issue to be tried or strong
case?
 Nature of on-going relationship between the two parties – of not trust or confidence
won’t be forced to work together
 Type of responsibilities involved – spectrum ranging from administrate (Wallace) to
senior management (Bergin)
4.1.7. Mareva Injunctions
 A Mareva injunction is an interim or interlocutory injunction to prevent the dissipation or
removal of assets before the trial of action to avoid a judgement being unsatisfied, although it
can be granted to prevent a defendant from disposing of assets after a trial has taken place to
avoid execution of judgement
o A ‘Mareva' injunction may be granted to prevent a defendant from removing assets from the
jurisdiction or from disposing of them within the jurisdiction in a manner likely to frustrate
the plaintiff's proceedings. More recently it has been accepted that an injunction of this
nature may extend to assets held outside the jurisdiction on a worldwide basis.
o A mareva injunction operates in personam to restrain the defendant from dealing with the
assets to which the order relates and it gives the plaintiff no proprietary rights over these
assets, therefore the rights of a third party with an interest in the asset will not be prejudiced
 Nippon Yusen Kaisha v Karageorgis [1975]
o Facts:
 Plaintiffs shipowners who are ranted ships to charters who had defaulted on some
payments. Plaintiffs pretty sure the defendants had assets in a bank in London and were
pretty sure they would transfer these assets outside the English jurisdiction
o Held:
 The Court of Appeal held that where there is a strong prima facie case that a plaintiff is
entitled to money from a defendant within the jurisdiction and the plaintiff has reason to
believe that the defendant may remove these assets from the jurisdiction, the court may
grant an interlocutory injunction on an ex parte basis restraining the defendant from
disposing of these assets.
 This principle was confirmed in Mareva Compania Naviera SA v International Bulkcarriers SA
[1975]
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Although a Mareva injunction is a form of interlocutory injunction, it has been argued that the
strength of the plaintiff's case is more important in Mareva proceedings than where other types
of interlocutory order are sought.
Procedural Issues:
o A Mareva injunction is often sought on an ex parte basis
o There is a duty to make full and frank disclosure and the plaintiff will be required to divulge
all material facts to the court
o Failure to make sufficient disclosure may result in the Mareva injunction being subsequently
discharged (see Bambrick)
 If there is fraud or misrepresentation on behalf of the plaintiff, the injunction may be
lifted or have to pay damages to the defendant
o Ancillary in nature so substantive proceedings need to be in being or exceptionally about to
be brought
o Plaintiff will be required to give an undertaking in damages
Countyglen v Carway [1995]
o Facts:
 The applicant company brought proceedings against the respondents seeking various
orders including a declaration that they had been guilty of fraud /and or conspiracy to
defraud, breach of trust and breach of duty and orders directing the respondents to
repay sums which they allegedly unlawfully and wrongfully removed from the company
o Held:
 High Court had granted an interim mareva injunction and there was an issue whether to
continue it.
 Murphy J stated that he doubted that there was any significant difference between the
expressions ‘good arguable case' and ‘substantial question to be tried', but he said that if
such a distinction could be drawn he would prefer the latter formulation.
 He stated that it was in relation to the risk of the defendant's assets being
dissipated in advance of any judgment and also with regard to the general balance
of convenience that considerations different from those pertaining in relation to
conventional injunctions arose.
 Not appropriate to show a high likelihood of success, fair and serious question to be
tried is the test
One of the most important issues which must be addressed in the context of Mareva injunctions
is the extent to which it is necessary to adduce evidence that the defendant's intention is to
frustrate the judgment of the court.
Fleming v Ranks (Ireland) Ltd [1983]
o Case involving Ranks company that manufactured flour. The court was trying to strike a
balance between plaintiffs having access to damages should they need to and allowing the
defendants to run their business. The assets that were sought to be frozen were perishable
o This issue was considered by McWilliam J, who stated (at 546): ‘I am of opinion that, to justify
such an injunction, the anticipated disposal of a defendant's assets must be for the purpose
of preventing a plaintiff from recovering damages and not merely for the purpose of carrying
on a business or discharging lawful debts.’
o McWilliams said the balance of convenience favoured the defendants, but the good arguable
test applied
 It was just the balance of convenience where the plaintiff fell down
O'Mahony v Horgan [1995]
o The Supreme Court favoured the 'good arguable case' test.
o Hamilton CJ and O’Flaherty J both favoured a good arguable case test
 Hamilton CJ stated that ‘the cases establish that there must be an intention on the part
of the defendant to dispose of his assets with a view to evading his obligation to the
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plaintiff and to frustrate the anticipated order of the court. It is not sufficient to establish
that the assets are likely to be dissipated in the ordinary course of business or in the
payment of lawful debts.’
 First phrase has proven very problematic because he asks for proof of intention
(requisite intention test). It’s a way of overcoming the balance of convenience test
 A summary of the criteria to be taken into account in determining whether a Mareva
injunction should be granted were laid down by Lord Denning MR in Third Chandris
Shipping Corporation SA and summarised by Hamilton CJ in in the following terms
 "i. The plaintiff should make full and frank disclosure of all matters in his knowledge
which are material for the judge to know
 ii. The plaintiff should give particulars of his claim against the defendant, stating the
grounds of his claims and the amounts thereof, and fairly stating the points made
against it by the defendant
 iii. The plaintiff should give some grounds for believing that the defendant had
assets within the jurisdiction. The existence of a bank account is normally sufficient
 iv. The plaintiff should give some grounds for believing that there is a risk of assets
being removed or dissipated
 v. The plaintiff must give an undertaking in damages in case he fails
o Injunction was lifted in this case
o Commentary:
 Courtney (1996) has stated that the Supreme Court has clarified the fact that an
applicant for a Mareva injunction must adduce specific evidence of 'the requisite
intention'.
 Capper has stated (1995) that 'while the approach in the Irish cases reduces the risk of
abuses of the Mareva jurisdiction, it is unrealistic and unfair, especially on an ex parte
application, to require plaintiffs to show that the defendant intends by the disposal of
assets to defeat any judgment the plaintiff may obtain'.
 Supreme Court has never revisited this test. High Court judgements have tried to get around this
test or water it down
 Bennett Enterprises Inc. v Lipton [1999]
o A more pragmatic approach towards this question was taken by O'Sullivan J in this case
o Reiterated a lot of the general points, but looked at how to establish the proof as in the
O’Mahony test
 He stressed that if any dissipation of assets were to occur in the ordinary course of
business, this itself would not justify the granting of a Mareva injunction and that the
anticipated dissipation must be for the purpose of the defendant evading his obligation
to the plaintiff
 He stated: ‘Equally, however, I consider that direct evidence of an intention to evade will
rarely be available at the interlocutory stage. I consider it is legitimate for me to consider
all the circumstances in relation to the case and I do not consider that this approach is in
any way prohibited by or at variance with the principles set out in the Supreme Court
judgment in O'Mahony v. Horgan.’
 Accepting in principle the O’Mahony test but said it was legitimate for the court to
draw inferences from all the circumstances of the case
 Tracey v Bowen [2005]
o Case is important on two points
 Looked at the nature of the wrong-doing involved
 Looked at the nature of the assets involved
o Facts:
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The defendant contended that the plaintiff had produced insufficient evidence for
suggesting that there were grounds for believing that there was a risk that the
defendants assets might be removed from the jurisdiction or dissipated
Held:
 Clarke J said he met the first hurdle of the test but had to look at whether it passed the
O’Mahony test
 The wrong-doing was a scam, plaintiff duped into handing over money
 Clarke J stated that it seemed to him that Bennett was authority for the proposition
that: ‘in assessing the risk of dissipation the court is entitled to take into account all
the circumstances of the case which can include, in an appropriate case, an
inference drawn from the nature of the wrongdoing alleged which if fraudulent or
unconscionable may lead to the establishment of a risk that further fraudulent or
unconscionable actions will be taken so as to place any assets of the defendant
outside the jurisdiction of the court.’
 Pointing to the nature of the wrong-doing
 The nature of the assets
 In terms of looking at all the circumstances, it is likely to be of much greater
significance in certain circumstances e.g. assets of real property and purely
liquid assets
 Considerations he outlined would be of significantly less weight where there is
real property in the jurisdiction
 However, he added that it should be noted that the court is required to look at all the
circumstances of the case and the above factors are likely to be of much greater
significance in cases where the only assets of the defendants within the jurisdiction are
liquid assets capable of being moved with great ease and in particular where the
defendant is 'experienced in intricate, sophisticated international transactions involving
movements of large sums of money'
The Duty of Full and Frank Disclosure
o Generally where a Mareva injunction is sought, due to considerations of urgency and secrecy
it will be applied for on an interim ex parte basis and often it is the very fact of giving notice
which may precipitate the action which the application is designed to prevent. However, a
duty to make full and frank disclosure applies.
o Bambrick v Cobley [2006]
 Facts:
 Contract for the sale of land, plaintiff brought the claim in respect of damages for
breach of contract. Plaintiff, in the first instance, applied for an injunction for the
defendant to be restrained from reducing her assets below €1,000. Plaintiff looked
to make the order more permanent and the defendant sought to have the order
lifted. Plaintiff had been less than fully candid in previous cases. Defendant claimed
that the plaintiff had failed to make relevant evidence clear about discussions the
parties that had happened about the refunding of money. Defendant said this was
material information that the plaintiff had omitted
 Held:
 Clarke J was satisfied that the court has a discretion, in cases where failure to
disclose had been established, to refuse to grant the interlocutory injunction. In
exercising this discretion the court should have regard to factors such as:
 (1) The materiality of the facts not disclosed,
 (2) The extent to which it might be said that the plaintiff is culpable in respect
of a failure to disclose. A deliberate misleading of the court is likely to weigh
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more heavily in favour of the discretion being exercised against the
continuance of an injunction than an innocent omission and
 (3) The overall circumstances of the case which led to the application in the
first place
Found that the information had been of significant relevance but that the plaintiff
wasn’t deliberately trying to mislead
 Injunction was lifted
Held that the plaintiff had to show that the defendant was moving the assets with
the aim of evading the law
Clarke J added that where a defendant had readily identifiable assets held in a
country to which the Brussels Regulation or Convention applied that was a factor
which the court could properly take into account in assessing whether there was a
real risk that the removal of further assets from this jurisdiction to another
convention country could be said to be ‘with a view to evading obligations’.
 Judgements convention
 In this case the risk was that the defendant would move the assets to England
but this was no longer as important because the judgement convention would
have the decision enforced in the UK as well
 Mareva injunctions are not a security for the plaintiff but about assets
remaining in the reach of the court
In an obiter comment Clarke J stated that it seemed to him that where ta defendant
had readily identifiable assets which were held in a country to which the Brussels
Regulation or Convention applied that was a factor the court could properly take
into account when assessing whether there was a real risk that the removal of
further assets from this jurisdiction to another Convention country could be said to
be 'with a view of evading obligations'
Worldwide Marevas
o One of the most significant developments in relation to Mareva injunctions in recent years
has been the willingness of the courts to make such orders in respect of assets outside the
jurisdiction on a worldwide basis.
o Babanaft International Co. SA v Bassatne [1990]
 Facts:
 Case involving the loss of money, order was made against the defendant who held
assets in a number of foreign jurisdictions. Judgement had been already had been
obtained against the defendant, plaintiffs were concerned about executing that
judgement
 Held:
 Kerr LJ concluded that ‘in appropriate cases, though they may well be rare, there is
nothing to preclude our courts from granting Mareva type injunctions against
defendants which extend to their assets outside the jurisdiction.' However, he
stressed that it was necessary to restrict such injunctions so as to bind only the
defendant personally and to include a limiting proviso which made it clear that the
order did not affect third parties.
 Orders cannot effect third parties
 However, he stressed that unqualified Mareva injunctions covering assets abroad
can never be justified as they involve an exorbitant assertion of jurisdiction of an in
rem nature over third parties outside the jurisdiction of the court. It was therefore
necessary to restrict such injunctions so as to bind only the defendant personally
and to include a limiting proviso which made it clear that the order would not affect
third parties
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Extra-territorial Mareva injunctions are more likely to be granted after judgment has been
obtained as the risk that such an order will be made in favour of a party who is wrongly
asserting a cause of action is removed and it has been stressed that pre-judgment orders will
be granted on a worldwide basis less readily than after trial.
Republic of Haiti v Duvalier [1990]
 Plaintiff convinced the court that it was one of the rare occasions where a world-wide
extra-territorial mareva injunctions should be imposed pre-trial
 The Court of Appeal granted a pre-trial Mareva injunction against the assets of the
defendants on a worldwide basis
 Staughton LJ stressed that the cases in which it would be appropriate to grant such
an injunction were ‘rare — if not very rare indeed'. The limiting proviso was
extended to the effect that the order should not affect any third parties unless and
to the extent that it is enforced by the courts of the state in which the defendants'
assets are located.
 The other notable feature of this decision is that the limiting proviso was extending to
the effect that the order should not affect any third parties unless and to the extent that
it is enforced by the courts of the state in which the defendant's assets are located
Bennett Enterprises Ltd v Lipton [1999]
 Facts:
 The plaintiffs instated proceedings against the defendants for breach of contract
and sought, inter alia, an interlocutory injunction retaining the defendants from
reducing monies in a certain trust fund below a stated sum
 Held:
 O'Sullivan J stated that it was clear that the defendants had no assets within the
jurisdiction but said that he did not consider that the plaintiffs' alleged failure to
establish that there were assets within the jurisdiction was necessarily fatal to their
application. On the contrary, he said that he could see the logic in the observation
to the effect that the fewer the assets within the jurisdiction the greater the
necessity for taking protective measures in relation to those outside it.
 Watered down the requisite intention test
The far reaching and often draconian nature of Mareva injunctions is more readily recognised
today than when the jurisdiction was first exercised. However, as against this, the
sophisticated fraudulent endeavours which can often extend into numerous different
jurisdictions are also becoming increasingly difficult to control.
Polly Peck International plc v Nadir (No. 2) [1992]
 Example of CoA reigning in Mareva injunctions, and granting them too readily
 Scott LJ stressed that the court will not grant a Mareva injunction before any liability has
been established if the injunction would interfere with the normal course of the
defendant's business particularly if the cause of action which was sought to be
protected, as in the case before him, was no more than speculative.
 In his view to grant a Mareva injunction in these circumstances would be ‘not
simply wrong in principle but positively unfair’
 Commentary:
 Zuckerman (1992) has commented that the approach of the Court of Appeal in Polly
Peck restores the Mareva jurisdiction to its true basis as a measure against abuse
rather than a form of security for the plaintiff.
 Bambrick reasoning echo this sentiment
Signs of a more cautious approach were also evident in the Supreme Court decision of
O'Mahony v Horgan [1995] as O'Flaherty J commented: 'it needs to be emphasised that the
Mareva injunction is a very powerful remedy which if improperly invoked will bring about an
injustice, something that it was designed to prevent'.
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4.1.8. Anton Piller Orders and Bayer Injunctions
 Anton Piller orders were developed as a means of dealing with cases where there is a serious
risk that a defendant may destroy or otherwise dispose of material in his possession which may
be of vital importance to the plaintiff if he is to establish his claim at a trial.
 An Anton Piller order requires the defendant to consent to a plaintiff, attended by his solicitor,
entering his premises to inspect and if necessary take away any documents or articles specified
in the order. Such an order is obtained on an ex parte basis and applications are often heard in
camera as secrecy will be of the essence if the order is to have the required effect and if the
defendant is forewarned he will in all likelihood take steps to frustrate the plaintiff's intentions.
o Means of dealing with cases where there is a serious risk the defendant will destroy
evidence
o Not search warrants, but it gives authority to a plaintiff, with their solicit, to enters a
defendants premises and obtain and go through evidence
o Often done on an ex parte basis
 Anton Piller KG v Manufacturing Processes Ltd [1976]
o Facts:
 The plaintiffs claimed that the defendants were selling confidential information to their
competitors, defendants had come across this information as an agent. Plaintiffs
sought access to documents on the defendants premises, they were pretty sure of the
evidence and that the defendants would destroy it before trial
o Held:
 The Court of Appeal made an ex parte order permitting the plaintiffs to enter the
defendant’s premises to inspect, remove or make copies of documents relating to the
equipment
 Lord Denning MR stated:
 ‘It seems to me that such an order can be made by a judge ex parte, but it should
only be made where it is essential that the plaintiff should have inspection so that
justice can be done between the parties: and when, if the defendant were
forewarned, there is a grave danger that vital evidence will be destroyed, that
papers will be burnt or lost or hidden, or taken beyond the jurisdiction, and so the
ends of justice be defeated: and when the inspection would do no real harm to
the defendant or his case.
 An extremely strong prima facie case
 The potential or actual damage must be very serious for the plaintiff
 There must be clear evidence that the defendant has incriminating
documents or articles in its possession
 There must be a real possibility that these will be destroyed
 In addition, Omrod LJ laid down three ‘essential pre-conditions' which must be satisfied
before an order of this nature will be granted; namely that the plaintiff must have an
extremely strong prima facie case, the potential or actual damage must be very serious
for the plaintiff and there must be clear evidence that the defendant has incriminating
documents or articles in its possession and there must be a real possibility that these
will be destroyed before any application inter partes can be made.
 Court has punished plaintiffs who abuse this system
o Plaintiff has to pay damages – undertaking made at the application of the order
o Where it is very serious court makes order for exemplary damages
 Columbia Picture Industries v Robinson [1987]
o Good case to read
o Facts:
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

The plaintiffs brought proceedings against the defendants for breach of copyright
relating to alleged video piracy operation. The plaintiffs obtained an Anton Piller order
but failed to disclose the material facts in making their application and in executing it
they removed items not included in the terms. The defendants then brought an motion
seeking to have the order set aside
o Held:
 Scott J found that the plaintiffs and their solicitors had failed to make full and frank
disclosures of all matters to the court and had acted oppressively and in abuse of their
powers in executing the order
 He made a finding that no purpose would be served by setting aside the order as it
had already been executed but held that the plaintiffs were liable in damages who
had ceased trading as a result
 Scott J stated:
 ‘a decision whether or not an Anton Piller order should be granted requires a
balance to be struck between the plaintiff's need that the remedies allowed by the
civil law for the breach of his rights should be attainable and the requirement of
justice that a defendant should not be deprived of his property without being
heard. …The Draconian and essentially unfair nature of Anton Piller orders from
the point of view of respondents against whom they are made requires, in my
view, that they be so drawn as to extend no further than the minimum extent
necessary to achieve the purpose for which they are granted, namely the
preservation of documents or articles which might otherwise be destroyed or
concealed.’
Another factor which has tended to swing the balance back in favour of defendants in recent
years has been the increasingly frequency with which the privilege against self-incrimination has
been invoked.
o Rank Film Distributors Ltd v Video Information Centre [1982]
 Held defendant could resist Anton Piller order based on privilege against selfincrimination
 Lord Russell pointed out that because the privilege against self-incrimination could
largely deprive the owner of copyright of his right to the protection of his property,
legislation in this area would be desirable.
 No equivalent in Ireland
o This privilege was withdrawn in England by s.72 of the Senior Courts Act 1981 in
proceedings to obtain disclosure of information relating to the infringement of rights in the
area of intellectual property which provided that matters disclosed would not be admissible
in evidence against the defendant in proceedings against him for a related offence.
 IN Ireland privilege can still be invoked in Intellectual Property disputes. There is an
option of complaint to gardaí who can be obtain a warrant under s.143 of Copyright
Act 2000
o However, the privilege can still be invoked in other forms of action
o Tate Access Floors v Boswell [1991]
 The decision of Browne-Wilkinson VC shows it can still provide a most effective
weapon in a defendant's fight against the application of Anton Piller orders.
 Facts:
 The plaintiffs alleged that the individual defendants who had formerly been
senior employees of theirs, had in the course of their employment fraudulently
obtained large sums from the plaintiffs and had created the defendant companies
specifically for fraudulently involving the plaintiffs
 Held:
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o
o
o
 The plaintiffs were granted worldwide Mareva injunctions against the defendants
and Anton Piller orders compelling to defendants to disclose their assets and
permitting he plaintiffs to enter the premises to search and seize relevant
documents
 Lord Browne-Wilkinson refused to discharge the Mareva injunction but set aside
the Anton Piller order
 He held the privilege against self-incrimination could properly be invoked in a
case involving discovery in a fraud action where, on the facts alleged by the
plaintiffs there was a real risk that a defendant might be prosecuted for
conspiracy in the jurisdiction and the documents and information sought by
the order might be incriminating
Universal Thermosensors Ltd v Hibben [1992]
 Nicholls VC suggested a number of safeguards in relation to the execution of Anton
Piller orders which he felt should be observed.
 Business premises, order executed during business hours
 Detailed list of items that defendant can check
 Execution being supervised by independent solicitor
Microsoft Corporation v Brightpoint Ireland Ltd [2001]
 As Smyth J made clear that the essence of an Anton Piller order is surprise and the
publication of such an order in advance of its execution can weaken or deprive it of its
element of surprise
 Smyth J commented that the essence of an Anton Piller order is surprise and that the
publication of the existence of such an order in advance of its execution could weaken
or deprive it of its element of surprise. In his view an affidavit in support of the
application for the order ought to err on the side of excessive disclosure because in the
case of material which falls into the area of possible relevance, the judge and not the
plaintiff should decide what is relevant.
 Smyth J said that there was strong prima facie evidence of dishonest conduct by the
defendants which indicated a strong probability that they would be likely to destroy
records. He stated that as there was an obligation to preserve all copies taken under
the Anton Piller order and the furnishing of a list was a courtesy which should have
been accorded.
 He added that the law on this issue was properly put by Scott J in Columbia Picture
Industries where the latter had stated that it is essential that a detailed record of
the material taken should be made by a solicitor executing an Anton Piller order
before the material is removed from the premises.
Commentary:
 Capper has commented on the options facing a defendant when confronted with an
Anton Piller order which he believes should not have been granted
 First, he may refuse to allow the order to be executed until he has had an
opportunity to apply to the court for its discharge
 This may be a potentially dangerous course of action as the defendant’s
refusal to comply with the order immediately constitutes contempt of court,
although if the application to discharge the order is successful this will not
necessarily have serious consequences
 Second, is to apply for the order to be discharged after it has been executed,
which is what happened in the Columbia case.
 However, as Capper points out, this is often of questionable value as the
damage will already have been done, and the defendant will usually simply
be seeking to force the plaintiff to comply with his undertaking in damages
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 Third, which can be pursued where a plaintiff fails to serve a statement of claim
or otherwise proceed with the action after the execution of an order, is for a
defendant to apply for dismissal of the plaintiff’s action

Bayer Injunctions
o These are likely to be sought where there are difficulties in relation to the execution of an
Anton Piller order, as in O’Neil v O’Keeffe.
o Bayer AG v Winter [1986]
 Facts:
 The plaintiffs claimed the defendant were distributing a counterfeit product and
although the plaintiffs had obtained Mareva and Anton Piller orders they were
afraid that the defendant would evade the effect of those orders by leaving the
jurisdiction
 Held:
 Court of Appeal held that it had jurisdiction to grant the order sought
 As Fox LJ stated ‘the law in relation to the grant of injunctive relief for the
protection of a litigant's rights pending the hearing of an action has been
transformed over the past ten years by the Anton Piller and Mareva relief’ and he
added that ‘the court should not shrink, if it is of opinion that an injunction is
necessary for the proper protection of a party to the action, from granting relief,
notwithstanding it may be, in its terms, of novel character.
o A Bayer injunction restrains a defendant from leaving the jurisdiction and will usually be
granted in circumstances where an existing Mareva or Anton Piller order has not been
complied with or to enable service of a Mareva or Anton Piller order.
 Fox LJ suggested that the order should be of very limited duration and should be in
force for no longer than was necessary to enable the plaintiffs to serve the Mareva and
Anton Piller orders which they had obtained and to endeavor to obtain from the
defendant the information referred to in those orders.
o O’Neill v O’Keeffe [2002]
 The principles set out in Bayer were applied in this jurisdiction in this case
 Facts:
 Plaintiff had invested monies through the defendant who offered himself as a
personal investment manager with particualr expertise in trading foreign debt
instruments through banks based on Switzerland. When the plaintiff sought
repayment he failed to obtain it
 Mareva and Anton Piller has been made but the Anton Piller had not been
executed because the premises could not be accessed, and the defendant was
nowhere to be found
 Held:
 Bayer order was made
 Kearns J stated that it went without saying that such relief could be granted in this
jurisdiction only in ‘exceptional and compelling circumstances’.
 Kearns J stated that he was happy to adopt the criteria for granting such relief as
enumerated by Courtney Mareva Injunctions (p. 457) where the author stated
that such an injunction should only be granted where:
 (1) The court is satisfied that there is a probable cause for believing that the
defendant is about to absent himself from the jurisdiction with the intention
of frustrating the administration of justice and/or an order of the court.
 (2) The jurisdiction should not be exercised for punitive reasons; a
defendant’s presence should be required to prevent a court hearing or
process or existing order from being rendered nugatory.
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 (3) The injunction ought not to be granted where a lesser remedy would
suffice.
 (4) The injunction should be interim in nature and limited to the shortest
possible period of time.
 (5) The defendant’s right to travel should be out-balanced by those of the
plaintiff and the proper and effective administration of justice,
 (6) The grant of the injunction should not be futile.
4.1.9. Academic Commentary
Brendan Kirwan, ‘Campus Oil Turns Twenty-Five: Is There Much to Celebrate’ (2008) 30 DULJ 325
o Outlined variety of issues with Campus Oil:
o Whether applies to mandatory or interlocutory injunctions;
 Understands reluctance in granting mandatory interlocutory injunctions; much harder to
undo the consequences of a mandatory order than a prohibitory order after the trial of an
action.
 Kirwan argues it is necessary to go beyond Campus Oil formulation in case of mandatory
interlocutory injunctions.
 In failing to take into account the circumstances of American Cyanamid, a distinction fails
to manifest.
o The extent of which an adequacy of damages analysis has led to a fair and consistent outcome.
o The meaning of the balance of convenience and when it should be considered.
 Kirwan calls the relationship between the balance of convenience and the consideration of
the adequacy of damages as being the most problematic, is one the element of the etc?
o The extent a court may consider the strength of a case.
 Unclear how court can prevent themselves from resolving difficult issues of fact or law.
Kirwan argues that it is inevitable that these facts and issues have been considered.
 Kirwan argues that while the courts have done not so much to consider the strength of the
case once all other matters have been considered, they have had regard to the specific
circumstances of each case which enable them to circumnavigate the Campus Oil
principles. Substantive considerations by their nature cannot adhere to Campus Oil
principles.
 Kirwan states that the need for an interlocutory injunction should be directly related to the length of
time which it takes to get a case from inception to substantive hearing. The more likely a hearing will
be quick, the less need for an interlocutory injunction. You must show that the damage accrued in
weeks or months will be irreparable in the sense of American Cyanamid.
 Kirwan states the Campus Oil guidelines should only be treated as the general guidelines which they
purported to be; to grant them an importance and lace which overreaches what they were designed
for leads to decision which appear to confuse and contradict. There should be greater evidence of
case brought outside these guidelines.
 Kirwan argues that Campus Oil should to be applied in relation to mandatory interlocutory
injunctions and a new set of guidelines set out.
Zuckerman (1993) 109 LQR 432
 Notes that in all areas of civil litigation, people have a degree of understanding of their likelihood of
success “[a litigant] does not have to grope in the dark to gauge the magnitude of this risk”.
 “The inevitably one-sided ex parte process, by which Mareva orders are obtained, makes it possible for
plaintiffs to infect the courts with their own apprehensions.”
 Zuckerman describes Mareva injunctions as a blunt weapon used to prevent a defendant from making
himself judgment proof, through depriving the plaintiff of available or traceable assets on the day of
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
the judgment. The purpose is to keep the assets of the defendant within the reach of the legal
process- not, as often happens, provide security for the plaintiff.
Zuckerman notes that extraordinarily Mareva injunctions allow the invasion of the defendant’s rights,
without a proper judgment and without the defendant being able to defend themselves. It denies the
defendant adequate use of their property rights, causing potentially far reaching disruptive
consequences and can involve a serious incursion into a defendant’s privacy.
Capper (1995) 17 DULJ 110
 States that differences between ‘good arguable case’ and ‘substantial question to be tried’ should not
be exaggerated.
 Australia and New Zealand: Case depends on factors such as risk of assets being dissipated so that the
plaintiff will be unable to enforce the entire agreement and the overall balance of convenience. Where
the plf’s case seems less strong more reliance will be placed on these factors.
 In O’Mahony v Horgan the court required intention on part of defendant to dissipate assets to defeat
a judgment. Capper notes this is not a requirement in other jurisdictions. He argues that while the Irish
case reduces the risk of abuses of the Mareva jurisdiction, it is also unrealistic and unfair, especially on
an ex parte application
 Capper notes the risk that is taken in ex parte applications of abuse and how in the absence of a
defendant it may be impossible to make a proper assessment of the plaintiff’s ultimate chance of
success.
 Capper questions why it should be up to the defendant to seek relief, instead of the plaintiff having to
return to court to justify what has happened and show why the injunction should be continued.
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4.2. Proprietary Estoppel
 Estoppel is not an exclusively equitable concept and operates today both at common law and in
equity. Two main aspects of equitable estoppel are recognised; promissory and proprietary
estoppel.
 The basis of the doctrine of proprietary estoppel is to prevent a person from insisting on his
strict legal rights where to do so would be inequitable having regard to the dealings which have
taken place between the parties.
o It developed as an exception to the formalities required for the creation of interests in land
and the rationale behind the doctrine could be said to be to prevent unconscionable
behaviour. While proprietary estoppel is almost exclusively invoked in the context of rights
in or over land, it can extend to other forms of property.
 It acts as a shield not a sword
 Thorner v Major [2009]
o Facts:
 P would work on the farm for nothing based on assurance that he would inherit the
farm. Clear that the intention that this would happen. The deceased left the farm to the
plaintiff, died without a valid will but there was lots of evidence that it was intention that
the plaintiff would inherit the farm
o Held:
 IN Court of Appeal lost because about the doubts about the assurance made, the House
of Lords held the plaintiff won
 As Lord Walker commented the doctrine of proprietary estoppel is based on three main
elements: ‘a representation or assurance made to the claimant; reliance on it by the
claimant; and detriment to the claimant in consequence of his (reasonable) reliance.’
 Important that the promise was unambiguous and intended to be taken seriously
within its context
 Gillett v Holt [2001]
o However, as Robert Walker LJ made clear in the course of his judgment in the decision of
the Court of Appeal that the doctrine cannot be treated as if it can be ‘subdivided into three
or four watertight compartments.’ As he stated, ‘the quality of the relevant assurances may
influence the issue of reliance’ and ‘reliance and detriment are often intertwined.’
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o
Mistake to view the three elements as separate from each other, should be regarded as a
global test
4.2.1. Elements of Claim
 Assurance
o The assurance given, while it need not necessarily have been express, must have been made
by the party with the intention that it should be relied on and a mere expression of opinion
would be insufficient in this context. It will usually consist of encouragement by words or
deeds although it is possible that mere acquiescence or 'conscious silence' might also suffice.
o C.D. v J.D.F. [2006]
 Facts:
 Husband spent his father’s money to improve the house, this did give him an interest
 Held:
 However, doubt was cast on this proposition by McGuinness J in her judgment in this
case, where she said that in her view in order to establish an estoppel ‘there must
actually be a promise, or at least a reasonably clear direct representation or
inducement of some kind’ and it is not sufficient to assert that something was
permitted to happen or that third parties looking at the situation thought that a
particular outcome was likely.
o Gillett v Holt [2001]
 Robert Walker LJ made the interesting point to the effect that where assurances given
were intended to be relied on, and were in fact relied on, it was not necessary to find an
irrevocable promise as it is the other party’s detrimental reliance on the promise which
makes it irrevocable
o Thorner v Major [2009]
 The nature and quality of any assurances made as one of the key issues in this case
 Lord Scott referred to the fact that a representation, if it is to found a claim based on
proprietary estoppel, must be ‘clear and unequivocal’.
 Lord Neuberger said that this principle must be read as subject to some qualifications.
Lord Walker stated that he would prefer to say that to establish a proprietary estoppel
the relevant assurance must be ‘clear enough’ and that what amounts to sufficient
clarity will greatly depend on the context
 Reliance
o Reliance would seem to be established once it is shown that a representation ‘was calculated
to influence the judgment of a reasonable man' and generally once an assurance on the part
of the legal owner has been established, there is a presumption of reliance.
 Detriment
o Detriment will be suffered where the assurance on which reliance is placed is withdrawn and
it is the fact of detriment having been suffered which will render it unconscionable for the
legal owner to insist on enforcing his rights. While the detriment suffered by the claimant will
usually involve expenditure of money or the building of premises on another's land, it need
not consist of the payment of money or other quantifiable financial detriment as long as it is
something substantial.
 Most of these cases are based on land therefore the detriment need not be financial, but
it needs to be quantifiable. If there is no quantifiable detriment it won’t be easy. Key
word used is something substantial
o Bracken v Byrne [2006]
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
o
Situation where Clarke J held that the claim based on proprietary estoppel failed on the
lack of detriment
 Facts:
 Two sisters, one did better with the estate, made promise to the sister that she could
build a house on a plot of land on the estate. Other sister sought to rely on this,
plaintiff failed to prove substantial detriment (only detriment was a planning
application and brief discussions with a builder – not substantial)
 Held:
 It is clear from the judgment of Clarke J that the requirement that the detriment
suffered will be substantial in nature will be enforced.
 He stated that the only detriment suffered by the plaintiff was the making of a
planning application and some brief discussions with a builder and he concluded that
he as not satisfied that any sufficient detriment had been suffered
Gillett v Holt [2001]
 Facts:
 P was farm manager on a low wage done a basis that he thought he would inherit the
farm. P and D fell out and D tried to get P off the land.
 Held:
 A comprehensive analysis of the manner in which the principle of detriment operates
in the context of proprietary estoppel was undertaken by Robert Walker LJ in this
case
 There must be a sufficient causal link between the assurance relied on and the
detriment asserted, the issue of detriment must be judged at the moment when the
person who has given the assurance seeks to go back on it and whether the
detriment is sufficiently substantial is to be tested by whether it would be unjust or
inequitable to allow the assurance to be disregarded.
 He continued: ‘The overwhelming weight of authority shows that detriment is
required. But the authorities also show that it is not a narrow or technical concept.
The detriment need not consist of the expenditure of money or other quantifiable
financial detriment, so long as it is something substantial. The requirement must be
approached as part of a broad inquiry as to whether repudiation of an assurance is or
is not unconscionable in all the circumstances.’
4.2.2. Imperfect Gifts
 While the general principle is that equity will not complete an imperfect gift (Milroy v Lord) in
some circumstances the courts will allow the perfection of a gift, usually in the context of a
voluntary gift of realty,
 Dillwyn v Llewelyn (1862)
o Facts
 Son built land on father’s land with father’s consent, clear intention of giving land to son.
Father died without will. Equity intervened
o Held:
 House of Lords held that the father’s intention to convey the fee simple estate would be
carried into effect by the court, although the land had been left in trust for the benefit of
third parties by virtue of the provisions in the fathers will
 Lord Westbury stressed that a voluntary agreement would not be completed by a court
of equity in the case of a mere gift and that it was instead the subsequent acts of the
donor which gave rise to the claim.
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 He noted it was the strength of the promise made and that with the father’s
knowledge the son had incurred substantial expenditure on the land that allowed
equity to complete the imperfect gift
 Smyth v Halpin [1997]
o Facts:
 Son built onto family home, instead of building a new house as his father had suggested
that it would be his. House left to mother and then to sister. Equity intervened
o Held:
 Geoghegan J stated that the plaintiff's clear expectation was that he would have a fee
simple interest in the entire house and concluded that the protection of the equity
arising from the expenditure required that an order be made by the court directing a
conveyance of that interest to him.
4.2.3. Common Expectation
 Proprietary estoppel may also arise where parties have consistently dealt with each other in
such a way as reasonably to cause one party to rely on a shared assumption that he would
acquire rights in the other party's lands.
 Ramsden v Dyson (1866)
o The accepted classic formulation of this proposition was laid down by Lord Kingsdown in his
dissenting speech in this case
 ‘If a man, under a verbal agreement with a landlord for a certain interest in land, or,
what amounts to the same thing, under an expectation, created or encouraged by the
landlord, that he shall have a certain interest, takes possession of such land, with the
consent of the landlord, and upon the faith of such promise or expectation, with the
knowledge of the landlord, and without objection by him, lays out money upon the land,
a Court of equity will compel the landlord to give effect to such a promise or
expectation. If, on the other hand, a tenant being in possession of land, and knowing the
nature and extent of his interest, lays out money upon it in the hope and expectation of
an extended term or an allowance for expenditure, then, if such expenditure has not
been created or encouraged by the landlord, the tenant has no claim which any Court of
law or equity can enforce.’
o It is important to stress that before Lord Kingsdown's dicta will apply it is essential that the
expenditure has been requested, or more commonly encouraged, by the land owner. As the
second paragraph of his statement makes clear, where the other party merely lays out
money in the hope or expectation of acquiring an interest, which has not been encouraged
by the land owner, no estoppel will arise.
 Attorney General of Hong Kong v Humphrey's Estate [1987]
o Facts:
 It was agreed in principle between the Hong Kong government and a group of
companies, which included the respondent, that the government would grant the group
a lease of specific property in exchange for flats which belonged to the latter. The
government rook possession of the flats and fitted them out for civil servants before the
contract was concluded and the respondents withdrew from the transaction. The
applicant took an action contesting the respondents right to withdraw as they were
estopped from withdrawing, the respondents sought a declaration that it was entitled to
the possession of the flats
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Held:
 The Privy Council rejected the claim that the respondents were estopped from
withdrawing as it would have to be established that the government acted to its
detriment to the knowledge of the respondents in the hope that it would not withdraw,
but also that the respondents created the belief that it would not withdraw and the the
government relied on that belief
 The Privy Council accepted that while ‘the government acted in the confident and not
unreasonable hope that the agreement in principle would come into effect,' the group
had not encouraged or allowed a belief or expectation on the government's part that it
would not withdraw from the agreement and that in the circumstances no estoppel
arose.
 Lord Templeman’s opinion was that any expectation that the government had hadn’t
been created or encouraged by the group of companies
 It wasn’t an unreasonable expectation, but they had been led on
 The importance of the fact that any expectation or belief be created or encouraged by a land
owner can also be seen
 Haughan v Rutledge [1988]
o Facts:
 Deal for a trial period for harness racing on land, expectation of a permanent lease.
Suffered detriment in creating the track but the owner of the land didn’t give them a
lease
o Held:
 Blayney J held that four conditions would have to be satisfied before an estoppel could
arise, namely detriment, expectation or belief, encouragement and finally, that there be
no bar to the equity.
 On the facts of the case the third and fourth conditions had not been satisfied
 He said ’I consider that the plaintiffs laid out money on the construction of the track in
the hope and expectation that the defendant would continue to make lettings of the
track to them, but as that hope and expectation was not created or encouraged by the
defendant, the plaintiffs have no claim which can be enforced at law or in equity.’
 It wasn’t a shared expectation
 Court wasn’t satisfied that there was an expectation created or encouraged
o
4.2.4. Unilateral Mistake
 Proprietary estoppel may also be invoked where one party has made an error as to the nature of
his rights, the crucial factor being that detriment is suffered by the party who innocently relies
on the mistaken assumption that he has rights in land.
o Claims usually fail because the person is not mistaken as to their rights over the land
 Ramsden v Dyson (1866)
o Lord Cranworth: ‘If a stranger begins to build on my land supposing it to be his own (where
the unilateral mistake comes in), and I, perceiving his mistake, abstain from setting him right,
and leave him to persevere in his error, a Court of equity will not allow me afterwards to
assert my title to the land on which he had expended money on the supposition that the land
was his own. It considers that, when I saw the mistake into which he had fallen, it was my
duty to be active and to state my adverse title, and that it would be dishonest in me to
remain wilfully passive on such an occasion, in order afterwards to profit by the mistake
which I might have prevented.’
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However, he continued: ‘If a stranger builds on my land knowing it to be mine, there is no
principle of equity which would prevent my claiming the land with the benefit of all the
expenditure made on it.’
 Therefore, it is necessary that the person spending the money thought he was building on
his own land and the real owner knew at the time knew that the land in fact belonged to
him
Key point is that the person who suffered the detriment known they didn’t own the land
It is necessary that the person spending the money thought that he was building on his own land
and that the real owner knew at the time that the land did in fact belong to him; no estoppel will
arise under this heading where the ‘stranger’ knows that he has no rights over the land.
O’Callaghan v. Ballincollig Holdings Ltd [1993]
o Facts:
 Plaintiffs claimed that they had acquired title to a house by adverse possession and this
claim was rejected by the defendants and a notice to quit was served. Plaintiffs sought a
declaration of their title or alternatively that they had a lien, based on the grounds of
proprietary estoppel, on the house for the money they spent reinstating it while the
defendant counter-claimed for possession
o Held:
 Blayney J was satisfied that the submission of the plaintiffs was not well founded; as long
as the plaintiff’s tenancy continued to subsist, the defendant was not entitled to interfere
and it was not a case of the defendant standing idly by
 Hr approved the second limb of Lord Cransworth’s dicta in Ramsden and concluded that
the plaintiffs knew that they held the defendants house as tenants and therefore could
not prevent the defendant from claiming the house with the benefit of their expenditure
on it
Wilmott v Barber (1880)
o Historically there was a restrictive interpretation
o Facts:
 Neither the plaintiff assignee of a lease nor the lessor had realised that the lease
prohibited assignment of the lease without the lessors consent
o Held:
 Fry J concluded that the lessor could not, by his acquiescing in the expenditure incurred by
the lessee, be estopped from asserting his right to refuse consent to assignment
 Fry J laid down the proposition that a person should not be deprived of his strict legal
rights unless he has acted in a manner which would make it fraudulent to assert those
rights, fraud in this context being dependent on establishing five necessary elements.
These were as follows:
 1.The claimant must have made a mistake as to his legal rights.
 2. The claimant must have expended some money or done some act on the faith of his
mistaken belief.
 3. The owner of the land must know of his own right which is inconsistent with the
right claimed by the plaintiff.
 4. The owner must know of the claimant's mistaken belief as to his rights.
 5. The owner must have encouraged the claimant in relation to the expenditure
incurred or other acts done, either directly or by refraining from asserting his legal
rights.
 These so called five probanda came to be applied by the courts in cases where a claim of
proprietary estoppel was made irrespective of the basis of such a claim and even where it
o
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did not involve a case of unilateral mistake and restricted the development of the doctrine
for some time as a result.
4.2.5. A Move Towards a Test of Unconscionability
 Taylor's Fashions Ltd v Liverpool Victoria Trustees Co. Ltd [1982]
o First instance decision
o Unconscionability has taken over as a result of this case
o Oliver J: ‘the more recent cases indicate, in my judgment, that the application of the
Ramsden v. Dyson principle … requires a very much broader approach which is directed
rather at ascertaining whether, in particular circumstances, it would be unconscionable for
a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or
encouraged another to assume to his detriment rather than to inquiring whether the
circumstances can be fitted within the confines of some preconceived formula serving as a
universal yardstick for every form of unconscionable behaviour.’
 One question the court needs to ask
 Is repudiation, going back on an assurance, unconscionable
 Lim Teng Huan v Ang Swee Chuan [1992]
o Succeeded, wouldn’t have succeeded in the scope of unilateral mistake
o Plaintiff and the defendant were co-owners of a piece of land, the defendant on the basis of
an assurance of the plaintiff built a house on the jointly owned land. He did so on the basis
that there would be a land swap and the land the house was built on would become his. He
built the house and the plaintiff refused to transfer his interest
o Lord Browne-Wilkinson said that in order to found a proprietary estoppel, ‘it is enough if, in
all the circumstances, it is unconscionable for the representor to go back on the assumption
which he has permitted the representee to make.’
 Taylor v Dickens [1998]
o First instance decision
o Claim failed because it would leave too much uncertainty
o Individual worked as a handyman for an elderly widow with no family, she had told him that
she left all her property in her will. AS a result, he did not charge her for any of the work he
did. Unbeknownst to him she changed her will so she got nothing, he didn’t know until after
she died
o Judge Weeks concluded that there was nothing unfair or unjust in the deceased changing
her will and that no equity arose in the plaintiff’s favour.
o In his view if one were to conclude otherwise ‘one might as well forget the law of contract
and issue every judge with a portable palm tree. The days of justice varying with the size of
the Lord Chancellor’s foot would have returned’.
 Not about contract but about equity – only arises where there is no contractual claim
 Gillett v Holt [2001]
o Worked for wealthy farmer, no doubt that he was told that he would inherit the farm.
Parties fell out during the owner’s life time and he was cut out of the business. There was
clear assurance, reliance and detriment
o Robert Walker LJ said that ‘the fundamental principle that equity is concerned to prevent
unconscionable conduct permeates all elements of the doctrine. In the end the court must
look at the matter in the round.’
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He added that the requirement of detriment must be approached as part of a broad inquiry
as to whether repudiation of an assurance is or is not unconscionable in all the
circumstances.
The role which unconscionability plays in establishing a claim based on proprietary estoppel
particularly in a commercial context will need to be reassessed in the light of the decision of the
House of Lords
o Cobbe v Yeoman’s Row Management Ltd [2008]
 Outcome different to Thorner v Major due to context
 Claimant, experienced property developer, entered into oral agreement with
defendant. Claimant to apply for planning permission to develop apartment block. At
the last minute the defendants pulled out, claimant had suffered detriment and sued
under proprietary estoppel
 Succeeded at first instance and in the CoA but failed in HoL
 Lord Walker expressed the view that it was not enough ‘to hope, or even to have a
confident expectation, that the person who has given assurances will eventually do the
proper thing.’
 As he stated, ’hopes by themselves are not enough’ and in his view in the cases in
which an estoppel has been successfully established, the claimant had believed
that the assurance on which he relied was binding and irrevocable.
 Lord Walker also voiced concerns about how the courts ‘should be very slow to
introduce uncertainty into commercial transactions’.
 Lord Scott expressed the view that unconscionability of conduct may well lead to a
remedy but, in his opinion, proprietary estoppel could not be the route to it unless the
ingredients for such an estoppel were present.
Thorner v Major [2009]
o There are signs in the decision of the House of Lords in this case that a more flexible
approach will be taken towards the use of the concept of unconscionability where
proprietary estoppel is not invoked in a commercial context.
o McFarlane and Robertson (2009) 125 LQR 535, 542 have expressed the view that the
decision in Thorner, by implicitly rejecting the limitations set out by the House of Lords in
Cobbe, allows proprietary estoppel to continue to perform its role of protecting those who
reasonably rely on assurances in relation to another’s land. However, as they point out the
inquiry in relation to whether an assurance has been made and whether reliance on it is
reasonable will have to be sensitive to the background of the case.
Coyle v Finnegan [2013]
o Backs up UK approach in non-commercial cases, v similar to Gillet v Holt and Thorner v
Major
o Facts:
 Plaintiff had worked for many years (over 10 years) for the deceased for very little
money. The plaintiff and the farmer had slowly fallen out and the defendants had
taken over the role of helping out on the farm, for about 5 or 6 years. At the time the
plaintiff was working there was no doubt that the deceased had promised the plaintiff
would inherit the farm. No doubt he had relied on the assurance and suffered
detriment.
o Held:
 Laffoy J found that there had been an express representation or assurance by the
deceased to the plaintiff, that the plaintiff had acted in reliance on the assurances
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given to him by the deceased and had suffered detriment in consequence of his
reasonable reliance on the deceased’s assurances.
She concluded that looking at the facts in the round, she was satisfied that it would be
unconscionable if the plaintiff was not recompensed for the labours and services he
had provided to the deceased. She further found that it would be unconscionable if the
defendants acquired the deceased’s farm free from any entitlement of the plaintiff to
be recompensed.
 Used language similar to that in Gillet v Holt
Plaintiff got 1/6 of the value of the farm
 Likely to be considered a reasonable recompense for the services he did for the 10
years while respecting the defendants being left the farm in the will and the work
they did on the farm
4.2.6. The Extent of the Remedy
 The Minimum Equity
o It has been recognised that ‘of all doctrines, equitable estoppel is surely one of the most
flexible’ and that the court must look at the circumstances of each case in order to
determine how the equity which arises can be satisfied
 The Expectation-based and Reliance-based Approaches
o There has always been a degree of uncertainty about what the doctrine of proprietary
estoppel should seek to achieve. Is it designed to fulfil the expectations of a party which
have arisen as a result of his dealings with another? Or is its role more limited one of
reversing any detriment suffered as a result of reliance on the promise of another?
o Expectation Based Approach
 Traditionally in Ireland, Courts try to give effect to expectation. Court would ask what
the plaintiff thought they were going to get and then give them what they expected
 Problem because it may not be clear what the plaintiff expectations are.
 Issue of expectations being out of proportion
 Subject to the criticism that it is more likely to lead to the creation of informal rights in
land and that ‘it threatens an improper outflanking of the requirement for contractual
consideration’
o Reliance Based Approach
 Traditionally in counties like Australia they had a reliance-based approach. Asked what
detriment the plaintiff suffered and focused on remedies based on that
 Hard to quantify the detriment
 If Someone spends $100 putting up a shed on a piece of land worth €1 million
based on an assurance that if they put up the property that they would get the
land, there is a huge difference between the expectation approach and a
reliance-based approach.
 Proportionality Approach
o UK Courts now try to take a balance approach and look at whether the expectations are
proportionate
 Jennings v Rice [2003]
 Facts:
 Claimant had worked for the deceased for many years, as a gardener and then
doing odd jobs then staying in the house to look after the deceased. Promised
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that she would leave everything to him, through vague statements. After she
died her estate was worth £1.2 million but plaintiff first awarded £200,000 (half
the value of the house). This was upheld on appeal
 Held:
 Court of Appeal dismissed the appeal
 Robert Walker LJ stated that it was no coincidence that the statements of
principle in relation to this question referred to satisfying the equity rather
than satisfying or vindicating the claimant’s expectations and that the equity
arises not from the claimant’s expectations alone, but from the combination of
expectations, detrimental reliance, and the unconscionableness of allowing the
benefactor to go back on the assurance.
 He added that while it may be the natural response of the court to seek to
fulfil the claimant’s expectations, if these are uncertain, extravagant or out
of all proportion to the detriment which he has suffered, the court can and
should recognise that the claimant’s equity should be satisfied in another
and generally more limited way. He concluded that ‘the essence of the
doctrine of proprietary estoppel is to do what is necessary to avoid an
unconscionable result, and a disproportionate remedy cannot be the right
way of going about that.’
 Suggitt v Suggitt [2012]
 Facts:
 Son wasn’t doing what father wanted, father left everything to one of the
daughter. The son had been promised quite a lot. Father was very wealthy and
the son was seeking farm land and one of the houses. Daughter appealed
decision that her brother was entitled to part of the estate
 Held:
 The Court of Appeal upheld the decision of the High Court that under the
doctrine of proprietary estoppel a son was entitled to a share of his deceased
father's estate despite the terms of his will where repeated assurances of
inheritance had been given to the son by the deceased.
 It concluded that there was no basis for interfering with the judge's evaluation
of reliance and detriment or change of position, and the relief granted could
not be said to be disproportionate.
 Arden LJ referred to the principles set out by Robert Walker LJ in Jennings v
Rice at and stated as follows: “In my judgment, this principle does not mean
that there has to be a relationship of proportionality between the level of
detriment and the relief awarded. What Walker LJ holds in this paragraph is
that if the expectations are extravagant or ‘out of all proportion to the
detriment which the claimant has suffered’, the court can and should recognise
that the claimant's equity should be satisfied in another and generally more
limited way.
 So the question is: was the relief that the judge granted ‘out of all proportion
to the detriment” suffered?’
 She concluded that it was not.
o Australian decision
 Waltons Stores (Interstate) Ltd v Maher (1988)
 As Brennan J commented ‘the remedy required to satisfy an equity varies according
to the circumstances of the case’.
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o
Academic Commentary:
 Mee 2018 Conv 280 look page 291 and 297
 Sometimes the expectation-based remedy is going to be disproportionate to the
detriment incurred
4.2.7. The Relationship Between Proprietary Estoppel and Constructive Trusts
 It has been accepted that there is a close relationship between the concepts of proprietary
estoppel and constructive trusts, in that both involve the application of the equitable principle
that it would be unfair to allow a party to enforce his strict legal rights when it would be
inequitable to do so on the basis of the dealings which have taken place between the parties.
 Grant v Edwards [1986]
o Browne-Wilkinson VC stated: ‘In both, the claimant must to the knowledge of the legal
owner have acted in the belief that the claimant has or will obtain an interest in the
property. In both, the claimant must have acted to his or her detriment in reliance on such
belief. In both, equity acts on the conscience of the legal owner to prevent him from acting
in an unconscionable manner by defeating the common intention.’
 Undoubtedly a common theme can be discerned in cases of proprietary estoppel and
constructive trusts; they both allow for the creation of informal interest in land and the concept
of unconscionability appears to underline them both
 Yaxley v Gotts [2000]
o Facts:
 Plaintiff promised he would get part of a house in exchange for work that he carried out.
The promise to transfer land was not enforceable because it was not in writing
o Held:
 Trial judge allowed the transfer
 CoA allowed the outcome of the trial judge’s decision (that he get part of the house) but
did this through a constructive trust instead
 Robert Walker LJ stated that ‘at a high level of generality there is much common
ground between the doctrines of proprietary estoppel and the constructive trust’ and
that in the area of a joint enterprise for the acquisition of land, the two concepts
collide.
o In this case it didn’t affect the outcome very much but in other cases it may be different
 Stack v Dowden [2007]
o Changed the approach to common intention in family law disputes
o Lord Walker made reference to the encouragement he had given to the notion of the
equating of proprietary estoppel and constructive trusts but said that he was now ‘rather
less enthusiastic’ than he might previously have been about the idea that the two doctrines
could or should be completely assimilated.
 It is also clear following Stack, that the imposition of a common intention constructive
trust does not depend in any way on establishing detrimental reliance.
 Thorner v Major [2009]
o Lord Scott stated: ‘For my part I would prefer to keep proprietary estoppel and constructive
trust as distinct and separate remedies, to confine proprietary estoppel to cases where the
representation, whether express or implied, on which the claimant has acted is
unconditional and to address the cases where the representations are of future benefits,
and subject to qualification on account of unforeseen future events, via the principles of
remedial constructive trusts.’
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Would prefer to keep proprietary estoppel and constructive trusts separate
Suggested confining proprietary estoppel to cases where representation is unconditional
Preferred to regard the plaintiff’s claim as established through remedial constructive
trust [but note this was not the view of other law lords in this case]
Finnegan v Hand [2016]
o Facts:
 Plaintiff started working on a part time basis at 11 years old. Worked for 38 years at a
clear under payment, expecting to inherit it.
o Held:
 White J stated that ‘the House of Lords decision in Thorner v Major would suggest that it
is open to the court where it has concerns about the uncertainty of the promise or
promises in particular to a future promise of a bequest in a will, to hold that a
constructive remedial trust arises.’
 He added that ‘[t]his Court would consider the decision of Thorner v Major a further
evolutionary step in the development of proprietary estoppel and, in particular, its
overlap with constructive trust or constructive remedial trust.’
o Be careful relying on Finnegan, other cases suggest that other Irish judges are happy
applying proprietary estoppel
4.2.8. The Relationship Between Proprietary Estoppel and Promissory Estoppel
 Traditionally, a distinction has been drawn between cases in which promissory and proprietary
estoppel may arise, although there have also been suggestions to the effect that making such
distinctions is not helpful
 One of the most controversial developments in the area of equitable estoppel has been the
judgment of Costello J in Re J.R. [1993]
o Facts
 Assurance that plaintiff would have a home for the rest of her life. The assurer became
unwell and eventually made a ward of court
o Held:
 He concluded that the respondent had made out a case of promissory estoppel as she had
acted to her detriment on the representation made to her. ‘It would be plainly inequitable
for the ward now to deny that she has a right to live in his house and it seems to me that
she has an equity which entitles her to stay in the house rent free for as long as she wishes
to which the court must give effect.’
o Controversial for using the phrase promissory estoppel when it was a typical proprietary
estoppel
o Commentary:
 Mee said that ‘it is not readily apparent why Costello J chose to rest his decision on
promissory estoppel rather than proprietary estoppel and this remark might equally be
applied to a later decision in which the plaintiff sought to assert his entitlement over land
arising out of assurances allegedly made to him
 Dicta in a number of Australian decisions suggest that there is ‘but one doctrine of estoppel’.
o Waltons Stores (Interstate) Ltd v Maher (1988)
 Mason CJ stated as follows: ‘One may therefore discern in the cases a common thread
which links them together, namely the principle that equity will come to the relief of a
plaintiff who has acted to his detriment on the basis of a basic assumption in relation to
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which the other party to the transaction has ‘played such a part in the adoption of the
assumption that it would be unfair or unjust if he were left free to ignore it’.
 Equity comes to the relief of such a plaintiff on the footing that it would be
unconscionable conduct on the part of the other party to ignore the assumption.’
 Mee suggests that ‘there has been nothing resembling a carefully considered (or even conscious)
decision to merge the estoppels in Ireland’ (1998)
o And states that the present position in this jurisdiction appears to be that the doctrines of
proprietary and promissory estoppel retain their separate identities.
 Thorner v Major [2009]
o Lord Walker gave consideration to some of the distinctions between what he clearly viewed
as separate doctrines.
o He stated that in his opinion it is a necessary element of proprietary estoppel that the
assurances given to the claimant, whether expressly or impliedly or even tacitly should relate
to identified property owned, or about to be owned, by the defendant.
o In his view this is one of the main distinguishing features between promissory estoppel and
proprietary estoppel. As he stated, promissory estoppel must be based on an existing legal
relationship, usually a contract, but not necessarily a contract relating to land, and while
proprietary estoppel need not be based on an existing legal relationship, it must relate to
identified property, usually land, owned or about to be owned by the defendant.
Concluding comments
The role which unconscionability plays in the doctrine of proprietary estoppel has given rise to
considerable debate and uncertainty.
 As Etherton comments [2009] it is ironic that the House of Lords relaxed the requirements for a
constructive trust in Stack v Dowden while at the same time restricting the doctrine of
proprietary estoppel in Cobbe v Yeoman’s Row Management Ltd: in his words, ‘[i]t might be said
that they have shot the wrong beast.’
 Advantages to proprietary estoppel
o Flexibility as to remedy
o Requirement of detrimental reliance preferable?
 Disadvantages
o Uncertainty re rights relating to land where formality requirements tend to be strict
o Can introduce uncertainty in relation to commercial transactions where parties can be
expected to enter into a contract

Recent Developments

Naylor v Maher [2018]
o Facts:
 The deceased executed a will in 2005 which left most of his land to his son, the plaintiff. In
2006 he executed another will, revoking the first, and leaving those lands to his daughter,
the defendant, but making a bequest to the plaintiff of €150,000. The plaintiff sought to
have the second will condemned on the basis of duress or alternatively on the basis that
the deceased held the lands on an equitable trust for him, and therefore was precluded
from leaving the lands to the defendant in his 2006 will
o Held in the High Court:
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IN the High Court the claims for duress were rejected. However, the claim for proprietary
estoppel by the plaintiff was upheld and the plaintiff was awarded the land. Thereby the
2006 will was upheld and the bequest of €150,000 to the plaintiff still stood
 Defendant appealing on the grounds that awarding the all of the lands to the plaintiff is
disproportionate to the detriment he suffered
o Held in the Court of Appeal:
 Upheld that the lands would go to the plaintiff through proprietary estoppel
 Held that the it would be unjust that the €150,000 bequest would go to the plaintiff as
well as it was clearly intended to be a substitution for the lands
4.2.9. Academic Commentary
Martin Dixon, ‘Confining and Defining Proprietary Estoppel: The Role of Unconscionability’
 Dixon argues that unconscionability has a reasonably clear meaning within the law of proprietary
estoppel and that it can be used to define and confine proprietary estoppel within reasonably
clear boundaries.
o Dixon recognises the issue that often estoppel can be used as the ‘penicillin’ to many issues,
thus many judges have sought to reign the doctrine in. Dixon seeks to solve this issue by
finding a confined definition of unconscionability.
 Dixon argues that proprietary estoppel is at heart an antidote to a lack of required formality in
the creation and transfer of property rights and consequently that the proper meaning of
unconscionability is linked to these formality requirements.
o Two methods of sidestepping formalities: stating that the contract was not yet fully
completed so the formalities do not apply (Thorner), The second argument is that once
estoppel is established, it does not fall foul of formalities because the landowner is subject to
a constructive trust protecting the claimant’s proprietary equity. Estoppel is essentially
shielded from the formality through the application of a constructive trust,
 Dixon argues that unconscionability is therefore not a cover for unregulated judicial discretion,
nor a loose term to describe a general sense of unfairness, but a concept which can be used to
discriminate objectively between valid and invalid estoppel claims.
o Calls the core meaning of unconscionability double assurance.
o Unconscionability can be the antidote to the imperfect and otherwise flawed creation of
property rights, if, but only, if, there is clear justification for ignoring the formality rules that
otherwise normally apply. Unconscionability will exist, if but only if, the landowners
assurance amounts both to an assurance of a ‘certain enough’ right in relation to land and
this carries with it a further assurance that the right will be granted despite the absence of
the formality that is normally required to create, transfer and enforce that right.
o An estoppel is made out when a landowner makes a double assurance, an assurance that the
claimant will have some right over the representor’s land combined with an assurance that
the right will ensue even if the formalities necessary to convey that right are not complied
with.
Biehler, ‘Remedies in Cases of Proprietary Estoppel: Towards a More Principled Approach?’
o Biehler argues that there has been a move towards an expectation-based remedy, rather
than reliance based.
o Reliance based: aimed at putting the plaintiff in the position he or she would have been in if
the representation had not been made and relied upon.
o Expectation based: Designed to fulfil the expectation relied upon by the plaintiff.
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Move in Ireland is not exactly clear, although Naylor v Maher and Coyle v Finnegan are the
most relevant cases.
Looks at Australian jurisdiction:
o Fulfilment of expectations is the starting point and proportionality mitigates this, used as a
method to withhold relief in circumstances where it otherwise could have been granted.
o In general, in Australia the courts have accepted that they should prima facie enforce a
reasonable expectation created or encouraged by the defendant and that it is only where it
would be wholly inequitable and unjust to insist on what would amount to a
disproportionate making good of the relevant assumption, that a lesser remedy may be
considered.
Looks at New Zealand:
o Judgment by Randerson J in Wilson Parking New Zealand Ltd v Fanshawe appears to strike
the fairest balance, assesses the quality and nature of the assurances made, the extent and
nature of the claimant’s detrimental reliance and the question whether it would be
unconscionable for the defendant to depart from the assurances given.
o


Hilary Delany, ‘Is There a Future for Proprietary Estoppel as We Know it?
 One of the advantages of proprietary estoppel is the flexibility in relation to the type of remedy
which should be imposed in order to do justice between the parties or to achieve the minimum
equity necessary in the circumstances.
 Argues that prior to Cobbe, proprietary estoppel provided a coherent framework across
estoppel, trusts and restitution for providing remedies in relation to land. States that it is now
difficult to reconcile the decisions of the HoL in Cobbe and Thorner, other than stating that the
former related to a commercial transaction, while the latter did not.
Etherton [2009] Conv 104
 Notes that it is ironic that the HoL has relaxed the requirements for a constructive trust in Stack
v Dowden while at the same time restricting the doctrine of proprietary estoppel in Cobbe v
Yeoman’s Row, in his words ‘it might be that they have shot the wrong beast’.
o Proprietary estoppel has usually been considered a more reliable and certain instrument for
remedying unconscionable conduct than the rather fluid concept of the constructive trust.
 States that the tension between the desirability of providing a remedy and the need for certainty
in the law has always been a critical feature of judicial decision-making in the common law and
equity. Argues that the necessity for certainty ought not be an obstacle to the provision of a
principles remedy for unconscionable conduct in relation to land.
 Concludes that there is a real need ro a coherent legal framework across the boundaries of
trusts, estoppel and restitution to provide remedies for unconscionable conduct in relation to
the acquisition and ownership of land.
Mee [2013] Conv 280
 Notes that proprietary estoppel is a very powerful and very unpredictable doctrine. Difficult for
solicitors to give advice to their clients, ‘how can parties bargain in the shadow of the law of
equity when that law is so ‘flexible’?’
 It is not in the public interest for the legal system to tolerate an indulgent and confused
proprietary estoppel jurisdiction.
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