Chapter 11 Scenario Questions

Enid holds shares on trust for Finn. In breach of trust, Enid sells the shares to Gerry. Gerry is Enid's business partner and knows that he holds shares as a trustee, but Gerry suspected that he did not hold any shares in his own right. Gerry decides not to investigate as Enid has offered such a good price which is well below the value of the shares. Gerry purchases the shares.
Which of the following options are available to Finn?

Finn cannot assert his equitable interest in the shares against Gerry as Gerry is a purchaser for value.

Finn can assert his equitable interest in the shares against Gerry as Gerry had constructive notice that the shares were held on trust.

Finn can adopt Enid's sale of the shares and so the proceeds from the sale are held on trust for Finn.

Finn can both assert his equitable interest in the shares against Gerry and adopt Enid's sale of the shares so that the proceeds are also held on trust for Finn.

Aaron holds money on trust for Belinda. Belinda asks Aaron to transfer the legal and equitable proprietary interests to Celine. Aaron does so by transferring the money into Celine's bank account.
Does Celine hold the legal and equitable title to the property?

Celine cannot hold the legal title as Belinda cannot direct Aaron to transfer the legal title to another.

Celine holds the money on resulting trust for Belinda.

Celine holds the legal title, but the transfer of the equitable title is void as it was not accompanied by signed writing.

Celine holds the money absolutely.

Aaron holds money on trust for Belinda. Belinda asks Aaron to hold the property on trust for Celine. The request is in writing but is not signed. Celine finds the document and signs it herself.
Is this a valid disposition of Belinda's equitable interest?

This is a valid disposition because the writing was signed by someone related to the transfer of the equitable interest.

This is a valid disposition because it involves the destruction of Belinda's equitable interest and the creation of a new equitable interest for Celine. Accordingly, there is no need for signed writing.

This is not a valid disposition, but it is the creation of a sub-trust.

This is not a valid disposition as it is not in signed writing.

Terence holds property on a discretionary trust for Ryan, Reena, Renee, and Ruben. Terence must distribute the whole of the fund but has a discretion as to which object will benefit and by how much. Ryan, Reena, and Renee are all 25 years old and agree to terminate the trust and request Terence to transfer the property to them. Ruben is 8 years old and is persuaded by the other objects to agree to the proposal.
Can Terence terminate the trust by transferring the property to Ryan, Reena, Renee, and Ruben?

All of the objects agree, and so Terence can transfer the property.

All of the objects agree, and so Terence can transfer the property, but only to the objects who are adults.

Terence cannot transfer the property as not all of the objects are adults.

Terence cannot transfer the property as the rule in Saunders v Vautier does not apply to discretionary trusts.

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