SQE1 Equity & Trusts 2

Question 1

Which type of resulting trust arises where a person contributes to the purchase price of property but legal title is conveyed into another's name?

Accepted Answer

Presumed resulting trust

Answer

A presumed resulting trust arises from circumstances giving rise to a presumption — such as a purchase price contribution — that the legal owner holds on trust for the contributor.

Question 2

In Stack v Dowden [2007], the House of Lords held that where unmarried cohabitants hold the legal title to a family home jointly, the starting presumption is that:

Accepted Answer

Beneficial interests are presumed equal but this can be rebutted by the whole course of dealing between the parties

Answer

Stack v Dowden established a strong presumption of equal beneficial ownership for jointly-held property, but this presumption can be displaced by examining the whole course of dealing including non-financial factors.

Question 3

How does English law characterise the constructive trust, in contrast to jurisdictions such as Canada?

Accepted Answer

As an institutional trust arising automatically by operation of law

Answer

English law treats the constructive trust as institutional — it arises automatically by operation of law on the occurrence of certain events — rather than as a discretionary remedy.

Question 4

In Lloyds Bank plc v Rosset [1991], Lord Bridge identified two bases on which a common intention constructive trust can arise. Which answer correctly states both?

Accepted Answer

Express common intention plus detrimental reliance, or direct financial contributions to the purchase price implying common intention

Answer

Lord Bridge held that a common intention constructive trust arises either from an express common intention accompanied by detrimental reliance, or from direct financial contributions to the purchase price which imply a common intention.

Question 5

A Quistclose trust (Barclays Bank Ltd v Quistclose Investments Ltd [1970]) arises in which of the following circumstances?

Accepted Answer

Money is lent for a specific purpose and that purpose fails, leaving it on resulting trust for the lender

Answer

A Quistclose trust arises where money is advanced for a specific purpose; if that purpose fails or cannot be carried out, the money is held on resulting trust for the lender rather than being available to general creditors.

SQE1 Practice Test

SQE1 Practice Test

SQE1 Equity & Trusts 2