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Exam_notes_full - 1 TOPIC 1 EQUITABLE INTERESTS ARISING BY...

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1 TOPIC 1: EQUITABLE INTERESTS ARISING BY OPERATION OF LAW EXPRESS TRUST 1. Concept of trust – separation of legal and equitable ownership. Trustee is the legal owner Beneficiary is the owner in equity (same as equitable owner) Trust by transfer: I transfer my land to T to hold on trust for me (or for Ben) Declaration of trust: I declare that henceforth I hold my land on trust for Ben. 2. Must be created in writing: s 53(1) PLA S. 53(2) – basically says you don’t need to expressly make a trust for one to exist. See Corin v Paton etc. PROPERTY LAW ACT, S 53(1) 1. (1) (a) No interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law; 2. (b) A declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will; 3. (2) This section shall not affect the creation or operation of resulting, implied or constructive trusts. CONSTRUCTIVE TRUSTS 1. Trusts that equity ‘construes’ from the circumstances in defined situations, eg Specifically enforceable contract for sale of an interest in land: Lysaght v Edwards Gift of Torrens System land under the rule in Corin v Paton: once gift is effective in equity, donor becomes a constructive trustee for the donee RESULTING TRUSTS 1. In some situations, where S (setmore) confers property upon X, equity presumes that S did not intend to transfer all of his or her beneficial interest. 2. Where the presumption of resulting trust operates, X holds the property as trustee for S. PRESUMED RESULTING TRUST – In both situations, X has paid NOTHING. 1. Voluntary (gratuitous) transfers S, the owner of property, transfers a whole or part interest to X (a volunteer, which is somebody who receives with NO consideration ). Equity presumes S intended to retain the beneficial interest. Can be rebutted, ie if done out of love, so a gift. Can occur where S owns property, transfers to X for no reason. Presumed to have been a mere transfer of benefit. MUST be NO consideration!!! 2. Purchase money resulting trust 1
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2 S pays for property but it is purchased in the name of X, or S and X jointly. Equity presumes that S intended to retain beneficial interest. PURCHASE MONEY RT: X CONTRIBUTES 1. S and X each contribute in equal shares but property is conveyed to X solely. 2. S is presumed not to have intended to pass the beneficial interest to X 3. X holds on trust for S and X in shares proportionate to their respective contributions. UNEQUAL CONTRIBUTIONS 1. A, B and C buy land together. A puts in 60%, B and C each put in 20%, and they have the vendor transfer to the three of them jointly.
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