FE-1 Company Law and Equity 2

Question 1

What is an express trust and what are the three certainties required for its valid creation in Irish equity?

Accepted Answer

Certainty of intention (clear intention to create a trust), certainty of subject matter (the property to be held on trust), and certainty of objects (the beneficiaries or purpose must be identifiable)

Answer

Knight v Knight [1840] established the three certainties for a valid express trust. Without all three the trust fails: intention (language must show trust was intended, not a gift or debt), subject matter (identifiable property), and objects (beneficiaries or purpose sufficiently certain to be executed).

Question 2

What is the rule in Saunders v Vautier [1841] in Irish trust law?

Accepted Answer

Adult beneficiaries who are absolutely entitled and sui juris (legally capable) and together hold the entire beneficial interest can collapse the trust and demand the legal title from the trustees

Answer

Saunders v Vautier allows beneficiaries who are of full age, of sound mind, and together entitled to the entire beneficial interest to bring the trust to an end and demand the trust property be transferred to them, regardless of the settlor's original intentions.

Question 3

What is oppression of minority shareholders under the Companies Act 2014 in Ireland?

Accepted Answer

Section 212 provides a remedy where the affairs of a company are being conducted in a manner oppressive to a member or in disregard of their interests — the court can make orders including buyout of shares or winding up

Answer

The section 212 (Companies Act 2014) oppression remedy protects minority shareholders from majority abuse. The court can make any order it thinks fit including: regulating future conduct, authorising civil proceedings, buying out the oppressed shareholder, or winding up.

Question 4

What is a resulting trust in Irish equity law and when does it arise?

Accepted Answer

A resulting trust arises by operation of law where property returns to the settlor or their estate because the trust fails (automatic resulting trust) or where one party pays for property put in another's name (presumed resulting trust)

Answer

Resulting trusts arise in two main situations: (1) automatic — where an express trust fails for lack of certainty or incompleteness, the beneficial interest results back; (2) presumed — where A pays for property conveyed to B, equity presumes B holds on resulting trust for A (rebutted by evidence of gift or advancement).

Question 5

What are the duties of a trustee under Irish equity and the Trustee Act 1893 (as amended)?

Accepted Answer

Trustees must: follow the trust instrument, act in the interests of all beneficiaries, exercise the standard of care of a prudent investor, avoid conflicts of interest, keep accounts, and act unanimously (unless authorised otherwise)

Answer

Trustees are fiduciaries with onerous obligations: strict adherence to the trust terms, no unauthorised profit from their position, investment duty (prudent investor standard under Trustee Act amendments), duty to account, and duty of impartiality between beneficiaries.

FE-1 Practice Test

FE-1 Practice Test

FE-1 Company Law and Equity 2