Chapter 2 Multiple choice questions

. Which of the following propositions is always true?

A trustee is never the absolute owner of trust property.

The trustee holds legal title to the trust asset.

The trustee must discharge the purposes for which trust property is held.

The trustee is not a beneficiary of his own trust.

. Which of the following circumstances is likely to defeat an in personam claim?

The defendant's death.

The defendant's personal insolvency.

The claimant has suffered no personal injury.

The defendant is a company.

. Which of the following statements best summarises the ratio decidendi of the decision of the House of Lords in Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567?

Trust and debt can co-exist in the same transaction in certain commercial contexts.

Failing companies need to be rescued.

A trust can be implied to remedy a failed contract.

Equity will mend a bad bargain.

. Money is given to John to give to such of his nieces and nephews as he thinks fit, and if he makes no appointment the money is to pass to his sisters in equal shares. This arrangement is:

A resulting trust

A fixed trust

A discretionary trust

A power of appointment

. 'In the present case the intention to create a secondary trust for the benefit of the lender, to arise if the primary trust, to pay the dividend, could not be carried out, is clear and I can find no reason why the law should not give effect to it.'
What case is this quotation taken from?

Barclays Bank v Quistclose Investments Ltd [1970] AC 567

Pilcher v Rawlins (1872) 7 Ch App. 259

Beswick v Beswick [1968] AC 58

Re Duke of Norfolk's ST [1982] Ch. 61

. Which of the following statements is false?

A settlor can create a trust to protect his own assets from his creditors.

A settlor can create a trust to protect his spendthrift child's assets from the child's creditors.

A settlor can set up a trust to protect his creditors from his insolvency.

A settlor can create a trust of a debt.

. "If we were asked what is the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence I cannot think that we should have any better answer to give than this, namely the development from century to century of the trust idea".
Who said this?

Professor Maitland

Professor Megarry

Lord Denning

Professor Ashburner

. "For the purposes of this Convention the term 'trust' refers to the legal relationship created – inter vivos or on death – by a person, the settlor, when assets have been placed under the control of a trustee for the benefit of a beneficiary or for a specified______." (The Hague Convention on the Law Applicable to Trusts and on their Recognition, Article 2)
What is the missing word?

Purpose

Charity

State

Corporation

. In HMRC v Annabel's (Berkeley Square) Ltd (2008) ICR 1076, a "troncmaster" used a dedicated bank account to hold tips paid to staff at an exclusive London nightclub. What was the decision in this case?

The troncmaster was held to be a trustee of the tips.

The troncmaster was held to hold the tips as a "stakeholder".

The tips were ownerless property (bona vacantia) belonging to the Crown.

The tips were owned by the nightclub company.

. Which of the following statements is correct?

If a director takes personal advantage of a business opportunity "belonging" to the company, the director is accountable as if he were a trustee. See Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200.

If a director takes personal advantage of a business opportunity "belonging" to the company, the director is personally accountable under the common law of agency.

If a director takes personal advantage of a business opportunity "belonging" to the company, any benefits are automatically deducted from the director's remuneration.

If a director takes personal advantage of a business opportunity "belonging" to the company, the director can keep the benefits if it can be shown that the company is very unlikely to have taken advantage of the opportunity.

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