FE-1 Equity 1 — Questions and Answers
Question 1: On what basis does equity traditionally act on the conscience of a defendant in Irish law?
- Common law precedent
- Statutory authority
- Personal conscience and the prevention of unconscionable conduct (Correct answer)
- Constitutional rights under Bunreacht na hÉireann
Correct answer: Personal conscience and the prevention of unconscionable conduct
Equity operates in personam, acting on the personal conscience of the defendant to prevent unconscionable conduct rather than dealing directly with property rights.
Question 2: Which of the three certainties required for a valid express trust concerns whether the settlor truly intended to create a binding trust rather than a mere moral obligation?
- Certainty of subject matter
- Certainty of objects
- Certainty of intention (Correct answer)
- Certainty of form
Correct answer: Certainty of intention
Certainty of intention requires that the settlor used words or conduct sufficient to show they intended to create a legally binding trust, not merely a precatory or moral obligation.
Question 3: Under the Statute of Frauds (Ireland) 1695, which type of trust must be evidenced in writing and signed by the settlor?
- Resulting trust
- Constructive trust
- Express trust of land (Correct answer)
- Charitable trust
Correct answer: Express trust of land
Section 4 of the Statute of Frauds (Ireland) 1695 requires that an express trust of land be manifested and proved in writing signed by the settlor or their authorised agent.
Question 4: The rule in Knight v Knight (1840) established that a valid express trust requires certainty of intention, certainty of subject matter, and which third certainty?
- Certainty of form
- Certainty of objects (Correct answer)
- Certainty of consideration
- Certainty of duration
Correct answer: Certainty of objects
Knight v Knight established that the third certainty is certainty of objects, meaning the beneficiaries or purposes of the trust must be sufficiently certain to be enforceable.
Question 5: What is the effect of the rule in Saunders v Vautier (1841) as applied in Irish trust law?
- Trustees may vary trust terms without court approval
- Beneficiaries who are sui juris and collectively hold the entire beneficial interest may collapse the trust and demand the property (Correct answer)
- Courts may modify trust terms whenever it is just and equitable
- A settlor retains a right to revoke any trust created by them
Correct answer: Beneficiaries who are sui juris and collectively hold the entire beneficial interest may collapse the trust and demand the property
The rule in Saunders v Vautier allows adult, legally competent beneficiaries who together hold the entire beneficial interest to terminate the trust and require the trustees to convey the property to them.
Question 6: Which equitable doctrine prevents a party from asserting strict legal rights over property where they have made an assurance upon which another has detrimentally relied?
- Subrogation
- Proprietary estoppel (Correct answer)
- Rectification
- Account of profits
Correct answer: Proprietary estoppel
Proprietary estoppel prevents a party from denying an equity arising from an assurance about property rights where the other party has detrimentally relied on that assurance.
Question 7: A 'Quistclose trust', derived from Barclays Bank Ltd v Quistclose Investments Ltd [1970], arises where money is lent for a specific purpose that fails. What type of trust is then imposed?
- An express trust for the lender's creditors
- A resulting trust back in favour of the lender (Correct answer)
- A constructive trust for the borrower's estate
- A charitable trust for public benefit
Correct answer: A resulting trust back in favour of the lender
Where money is advanced for a specific purpose that fails, equity imposes a resulting trust over those funds in favour of the lender, preventing the money from forming part of the borrower's general assets.
FE-1 Equity 1
On what basis does equity traditionally act on the conscience of a defendant in Irish law?