Chapter 8 Self-Test Questions

A voluntary transfer of property from A to B fails. What is the consequence?

B will hold the property on resulting trust for A.

A will hold the property on resulting trust for B.

A resulting trust cannot arise.

The court has a discretion to recognize a resulting trust if appropriate.

'Resulting trusts are less real than express trusts such that a resulting trustee will not be personally liable for breach of trust.'

True.

False.

A presumed resulting trust will arise in which of the following situations?
There might be more than one correct answer.

Where A purchases property that is vested in A and B's joint names.

Where A transfers property to B and does not receive any consideration.

Where A and B both provide half of the money to purchase property.

Where A purchases property that is vested in B's name.

An automatic resulting trust will arise in which of the following situations?
There might be more than one correct answer.

A has transferred property to B to be held on an express trust that fails immediately.

A declares that she holds property on trust for B, but later changes her mind.

A has transferred property to B to be held on an express trust, but later changes her mind.

A has transferred property to B to be held on an express trust that fails at some later point.

'Resulting trusts are better categorized as arising due to an absence of intent rather than a presumed or imputed intent.'

True.

False.

A voluntarily transfers property to B. How can B rebut the presumption of a resulting trust?

The presumption is difficult to rebut. B must provide extensive evidence demonstrating that B was intended to receive the beneficial interest.

B can demonstrate that the transfer was for a particular purpose.

B can demonstrate that the transfer was a gift.

B can demonstrate that the transfer was temporary.

In which of the following circumstances is it possible to recognize a presumed resulting trust?
There may be more than one correct answer.

Where the claimant provides value which indirectly contributes to the purchase of the property.

Where the claimant contributes to the purchase of the property.

Where the claimant has paid some of the utility bills after the purchase of the property.

Where the claimant has assisted with the cleaning of the property.

The presumption of advancement has been recognized in which of the following cases?
There might be more than one correct answer.

A transfer from a husband to a wife.

A transfer from a wife to a husband.

A transfer from a father to a child.

A transfer from a child to a parent.

'The effect of illegality on a transaction depends on the operation of the presumptions of resulting trust and advancement.'

True.

False.

Why does Equity recognize a resulting trust following the failure of an express trust?
There might be more than one correct answer.

The settlor has expressly provided for the retention of a beneficial interest in the property.

If the settlor considered the possibility of the trust failing, they would have intended to have a beneficial interest in the property.

The settlor retains the beneficial interest until it vests in someone else. If it does not vest because the trust has failed, the settlor retains it.

The recipient of the property was not intended to receive the property absolutely.

'Where an express trust fails, even if the settlor intended to transfer the property absolutely even if the trust failed, a resulting trust cannot arise.'

True.

False.

Why was the option held on resulting trust in Vandervell?

The express trust of the option failed for want of objects and so an automatic resulting trust arose.

The express trust of the option was valid but later failed as it was deemed to be a non-charitable purpose trust. An automatic resulting trust arose.

Vandervell transferred the option for no consideration and so a presumed resulting trust arose.

There was no resulting trust; the beneficial interest remained in the air until an express trust could be declared.

Notre Dame was recently damaged by a fire. People donated money for the repairs. If the building is successfully repaired and there is a surplus of money, what would happen to it?

The money would be held on resulting trust for the donors.

The money would be applied cy-près for the repair of other damaged buildings.

The money would be at the general disposal of Notre Dame Cathedral.

The money would be held on constructive trust for the families of the donors.

'It is not possible to exclude the recognition of a resulting trust by an express contract term, as the resulting trust arises by operation of law.'

True.

False.

Why was a 'secondary trust' recognized in favour of Quistclose in Barclays Bank v Quistclose?

The parties expressly agreed that if the purpose for the loan failed, the money would be held on a resulting trust for Quistclose.

The parties expressly agreed that if the purpose for the loan failed, the money would be held on an express trust for Quistclose.

The mutual intention of the parties and the essence of the bargain made it clear that the money was not free for Rolls Razor to use for any purpose. It was for one purpose and, if that failed, it was to be returned.

It would be unconscionable for Rolls Razor to retain the benefit of the money when it was clear that it was not to become part of Rolls Razor's general assets.

What distinguishes a Quistclose trust from other circumstances when money is paid for a particular purpose?

The money must be given exclusively for the specific purpose.

The money must be given to pay off debt.

The money must be given for a particular purpose with a clear intention that it is a loan and is to be paid back.

All loans result in the recognition of a Quistclose trust if they fail.

Which of the following statements is true in relation to money received under a Quistclose trust?

The money must be kept separate.

The money must be kept separate and be accompanied by instructions that it must remain separate.

It is not necessary for the money to be kept separate.

It is not necessary for the money to be kept physically separate as long as it is managed separately.

'In Twinsectra, Lord Millett considered that the money lent was held on resulting trust for Twinsectra, as the beneficial interest remains with the lender throughout, subject to the borrower's power to use the money for the specified purpose.'

True.

False.

'Lord Millett's analysis that the beneficial interest is retained by the lender must be right.'

True.

False.

Where a defendant is unjustly enriched at the expense of the claimant, what happens?

The defendant holds the enrichment on resulting trust for the claimant.

The defendant holds the enrichment on constructive trust for the claimant.

The result is a personal claim against the defendant.

The claimant can sue the defendant in tort.

A transfers £1,000 to B pursuant to a void contract. What right does A have?

B holds the money on trust for A because the contract was void and so B never received the property beneficially.

B holds the money on resulting trust for A because A has an absence of intent to benefit B.

A has an equitable proprietary interest in the money due to the contract being void.

A has a personal claim for the value of the £1,000.

'There are some circumstances where a claimant may have a claim in unjust enrichment where that property is held on resulting trust.'

True.

False.

What type of trust arises on rescission of a contract that was voidable?

A presumed resulting trust.

An automatic resulting trust.

A constructive trust.

An express trust.

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