Chapter 15 Multiple choice questions

. Complete the following statement made by Lord Browne-Wilkinson in Target Holdings Ltd v Redferns [1996] AC 421: "The basic right of a beneficiary is…."

"to have the trust fund managed accordance to the wishes of the settlor and the general law".

"to have the trust discharged in accordance with the provisions of the trust instrument, if any, and not the general law".

"to have the trust fund invested and distributed in accordance with settlor's intentions and the general law".

"to have the trust duly administered in accordance with the provisions of the trust instrument, if any, and the general law".

. In Tang Man Sit (Decd) (Personal Representative) v Capacious Investments Ltd [1996] 1 All ER 193, Tang, the owner of land, was party to a joint venture for the building of houses on the land. He agreed to assign some of the houses to the claimant after completion of the building works. No assignment was made. Instead, Tang let out the houses as homes for the elderly without the claimant's knowledge or approval. The presence of the tenants in the flats produced rents but it reduced the letting value of the flats, their presence therefore produced a gain and caused a loss. Accordingly, the claimant sought, on the one hand, an account of unauthorised profits and compensation for breach of trust, and, on the other hand, damages for loss of use and occupation and diminution of the value of the property due to wrongful use and occupation. Which doctrine prevented the court from giving judgment on both counts?

Double satisfaction

Election

Selection

Double recovery

. Which word should not appear in the following sentence?
"If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient damages to the trust estate to put it back to what it would have been had the breach not been committed".

Specific

Restitution

Damages

Estate

. What is the primary purpose of awarding compound interest against a trustee?

To ensure that the particular trustee does not retain unauthorised profits.

To punish the trustee.

To discourage trustees from seeking unauthorised profits.

To properly compensate the beneficiaries for their actual losses.

. According to s. 21(3) of the Limitation Act 1980 'an action by a beneficiary to recover trust property or in respect of any breach of trust … shall not be brought after the expiration of"?

Six years from the date on which the right of action accrued.

Six years from the date on which the right of action was discovered.

Three years from the date on which the right of action accrued.

Three years from the date on which the right of action was discovered.

. Lindsey, an adult beneficiary, has a life interest under a trust of which Roger is remainderman. Eleven years ago the trustees of the settlement had placed the trust fund in unauthorised investments. Lindsey died four years ago, having never got around to suing the trustees for their breach. If Roger is going to bring an action he must:

Obtain the consent of Lindsey's next-of-kin.

Apply to court for permission to bring an action out of time.

Bring the action within two years.

. Laura, an adult beneficiary, has a life interest under a trust of which Richard is remainderman. Sixteen years ago the trustees of the settlement placed the trust fund in unauthorised investments. Laura died nine years ago, never having got around to suing the trustees for their breach. If Richard is going to bring an action he must:

Bring the action on behalf of Laura's estate.

Apply to court for permission to bring an action out of time.

Bring the action within four years.

Obtain the consent of Laura's next-of-kin.

. Only one of the following statements is true, which one?

The doctrine of laches applies to bar an action to which no limitation period applies under the Limitation Act.

The doctrine of laches applies to bar an action within the limitation period under the Limitation Act.

The doctrine of laches applies to bar an action once the limitation period under the Limitation Act has passed.

The doctrine of laches applies to actions in equity by analogy to common law limitation periods under the Limitation Act.

. Before it can be said that a beneficiary has acquiesced in a breach of trust it is necessary to establish that:

He knew that what he is concurring in is a breach of trust.

It would be unfair or inequitable to allow the beneficiary to bring an action.

Acquiescence was in writing.

Acquiescence was by deed.

. Before the courts may relieve a trustee under Trustee Act 1925, s.61, it is necessary to establish that the trustee:

Acted honestly and reasonably or ought fairly to be excused.

Acted honestly or reasonably or ought fairly to be excused.

Acted honestly or reasonably and ought fairly to be excused.

Acted honestly and reasonably and ought fairly to be excused.

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