579:. Two problems with this are that it has not been upheld by the English courts, and that the courts would require those explicit terms to be part of the contract; Hudson considers it the most advantageous however, because it would offer the simplest protection of the money by not requiring the contract to be breached for the trust to come into existence. In
467:, where money was lent by A to B, to pay off his debts. When B went bankrupt and returned the money to A, the courts held that the creditors could not recover this money, as it was held in a form comparable to a trust. Most situations in which a trust will arise require that a specific use of the money is identified by the contract.
28:-type trusts are a species of resulting trust which arise where property (usually money) is transferred on terms which do not leave it at the free disposal of the transferee. That restriction upon its use is usually created by an arrangement that the money should be used exclusively for a stated purpose or purposes.
546:, is that because the resulting trust only comes into existence after the misuse of the loan, it may come too late; if the money is not available when the claim is brought, there is no remedy. The borrower may already have spent the money, or already be insolvent and the subject of claims by creditors.
628:
to be that "equity fastens on the conscience of the person who receives from another property transferred for a specific purpose only and not therefore for the recipient's own purposes, so that such person will not be permitted to treat the property as his own or to use it for other than the stated
549:
Another flaw with both
Wilberforce's and Millett's explanations is that if the interest is retained by the lender from the outset of the contract, it is not a resulting trust at all; the complete transfer of money should end the lender's equitable interest. It could be argued that the creation of a
589:, in that a loan agreement was made where the borrowers explicitly agreed to follow guidelines on the use of the money, something they failed to do. The Court of Appeal and the House of Lords refused to constitute any kind of trust or return the money however, applying Lord Wrenbury's judgment in
574:
trusts are express trusts. If the contract included a provision that the money was to only be used for certain purposes, it could be interpreted that this money is held on trust until it is used for those purposes. The borrower would be a trustee; using the money for any other purpose would be in
439:
in loans, through inserting a clause into the contract which limits the purposes for which the borrower can use the money. If the funds are used for a different purpose, a trust is created around the money for the benefit of the moneylender. This allows the moneylender to
123:
trust "probably ... the single most important application of equitable principles in commercial life", and further noting that despite 200 years of existence "it has resisted attempts by academic lawyers to analyse it in terms of conventional equitable doctrine".
31:
There must be an intention to create a trust on the part of the transferor. This is an objective question. It means that the transferor must have intended to enter into arrangements which, viewed objectively, have the effect in law of creating a trust."
501:
trust is an "illusory trust", where the apparent beneficiary (the moneylender, for example) takes no active role. This trust is created by the intention of either party, and is revocable at any time. The problems with this idea are that the facts in
537:
trust is a resulting trust, but held that the lender retains the interest throughout the transaction, with no need for this interest to reverse if the purpose of the loan fails. The problem with
Wilberforce's analysis, as explained by
462:
situations, the intention must be to create a secondary trust for the benefit of the moneylender, arising if the "primary trust" (the appropriate use of the money) is not fulfilled. The idea of a primary and secondary trust comes from
65:
created where a creditor has lent money to a debtor for a particular purpose. If the debtor uses the money for any other purpose, then it is held on trust for the creditor. Any inappropriately spent money can then be
528:
in the loan. Under
Wilberforce's two-stage trust, the interest in the money first goes from the lender to the borrower (the primary trust) and then, when the trust's purpose fails, reverses (the secondary trust). In
615:
situations, the requirement of "unconscionableness" could be met by the borrower using the money for a purpose other than the one for which it was lent, allowing the lender to claim an equitable interest in it. In
581:
444:
any inappropriately spent funds, and, in the case of the borrower's insolvency, prevents the money from being taken by creditors. The name and trust comes from the
479:
trusts is their categorisation within the accepted types of trust. The two-part trust structure (primary and secondary trusts) explained by Lord
Wilberforce in
633:
trusts constructive in nature. However, no constructive trust could be created until the money is misused, which may be too late for an effective remedy.
284:
575:
violation of the trustee's duties, and so void. This trust would be created as soon as the contract is agreed, with the normal requirement for it to be
450:
159:
76:
361:
109:, illusory trusts. At least one textbook has been written dedicated solely to exploring issues around the true nature and classification of
506:
are not those of a normal illusory trust, and
Millett failed to consider the mutual intention of the parties and any underlying contracts.
418:
576:
164:
92:
554:
trust is not based on the recovery of the original interest, but the creation of a new one. Doubts have also been raised about the
445:
71:
254:
249:
611:
trusts could be constructive trusts, which are created when the future trustee uses the money in an "unconscionable" manner. In
455:
996:
977:
320:
487:
trusts have variously been considered resulting, express or constructive in nature. An alternate explanation is given by
483:
does not appear elsewhere in
English trusts law, and the type of trust used affects the rights available to the parties.
602:
154:
96:
346:
1042:
149:
515:
411:
182:
88:
264:
169:
488:
356:
289:
187:
116:
100:
1063:
404:
387:
351:
366:
493:
315:
244:
234:
105:
952:
259:
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441:
392:
330:
67:
46:
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8:
891:
203:
42:
525:
310:
239:
62:
1038:
992:
973:
593:, when he said that "such a stipulation will not amount to an equitable assignment".
436:
371:
269:
208:
135:
759:
1019:
687:
325:
279:
274:
539:
294:
558:
case in general, in that the facts of the case did not create a stereotypical
1057:
625:
1024:
1007:
80:(1970), although the underlying principles can be traced back further.
70:, and returned to the creditors. The name and trust comes from the
213:
953:"The Quistclose Trust: Intention and the Express Private Trust"
83:
There has been much academic debate over the classification of
562:
trust; this causes problems with applying
Millett's analysis.
1008:"Conditional Payments and Insolvency – The Quistclose Trust"
629:
purpose"; this reference to "conscience" could make
618:
Carreras
Rothmans Ltd v Freeman Mathews Treasure Ltd
524:, stated that the contract gives the moneylender an
285:
888:William Harrington Palmer vs Randal Westropp Carey
435:trust is a method by which a creditor can hold a
1055:
967:
842:
87:trusts in existing trusts law: whether they are
585:, the courts considered a situation similar to
684:Barclays Bank Ltd v Quistclose Investments Ltd
451:Barclays Bank Ltd v Quistclose Investments Ltd
77:Barclays Bank Ltd v Quistclose Investments Ltd
542:, Professor of Equity and Finance Law at the
412:
968:Edwards, Richard; Stockwell, Nigel (2007).
119:, writing extra-judicially, has called the
419:
405:
1023:
1005:
902:
719:
1032:
659:
648:
582:Swiss Bank Corporation v Lloyds Bank Ltd
255:Perpetuities and Accumulations Act 2009
250:Perpetuities and Accumulations Act 1964
1056:
986:
935:
914:
866:
854:
830:
818:
806:
794:
743:
731:
698:
671:
991:(6th ed.). Routledge-Cavendish.
950:
782:
770:
596:
533:Lord Millett also explained that a
13:
603:Constructive trusts in English law
509:
14:
1075:
972:(8th ed.). Pearson Longman.
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20:
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570:The second possibility is that
516:Resulting trusts in English law
843:Edwards & Stockwell (2007)
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725:
713:
704:
692:
677:
665:
653:
642:
607:The third main theory is that
265:Recognition of Trusts Act 1987
1:
636:
127:
957:Monash University Law Review
624:trust principle was said by
290:Variation of Trusts Act 1958
7:
10:
1080:
1033:Swadling, William (2004).
1006:McCormack, Gerard (1993).
600:
513:
388:Conflict of laws of trusts
43:[2015] EWCA Civ 59
987:Hudson, Alastair (2009).
475:The primary problem with
367:Rule against perpetuities
16:Trust to trace lent money
951:Burns, Fiona R. (1992).
756:Twinsectra Ltd v Yardley
494:Twinsectra Ltd v Yardley
270:Statute of Frauds (1677)
245:Law of Property Act 1925
235:Charitable Uses Act 1601
106:Twinsectra Ltd v Yardley
260:Public Trustee Act 1906
892:[1926] UKPC 30
760:[2002] UKHL 12
710:(1819) 2 B&Ald 683
393:Hague Trust Convention
688:[1968] UKHL 4
520:Lord Wilberforce, in
1035:The Quistclose Trust
1025:10.5750/dlj.v9i1.245
544:University of Exeter
1037:. Hart Publishing.
1012:Denning Law Journal
497:; this is that the
458:maintained that in
160:Discretionary trust
97:constructive trusts
1064:English trusts law
597:Constructive trust
526:equitable interest
311:Account of profits
240:Charities Act 2006
155:Constructive trust
39:Bellis v Challinor
998:978-0-415-49771-8
989:Equity and Trusts
979:978-1-4058-4684-4
970:Trusts and Equity
437:security interest
429:
428:
372:Three certainties
362:Trustee liability
136:English trust law
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456:Lord Wilberforce
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326:Equitable remedy
280:Trustee Act 2000
275:Trustee Act 1925
150:Charitable trust
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89:resulting trusts
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660:Swadling (2004)
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649:Swadling (2004)
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643:
639:
626:Peter Gibson J.
605:
599:
577:validly created
568:
540:Alastair Hudson
518:
512:
510:Resulting trust
473:
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316:Breach of trust
183:Resulting trust
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29:
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11:
5:
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601:Main article:
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595:
591:Palmer v Carey
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514:Main article:
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471:Categorisation
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465:Toovey v Milne
446:House of Lords
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93:express trusts
72:House of Lords
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49:
45:at 56–57, per
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963:(2): 147–168.
962:
958:
954:
949:
948:
938:, p. 974
937:
936:Hudson (2009)
932:
923:
917:, p. 973
916:
915:Hudson (2009)
911:
905:, p. 108
904:
899:
893:
889:
884:
875:
869:, p. 972
868:
867:Hudson (2009)
863:
857:, p. 971
856:
855:Hudson (2009)
851:
844:
839:
833:, p. 970
832:
831:Hudson (2009)
827:
821:, p. 969
820:
819:Hudson (2009)
815:
809:, p. 968
808:
807:Hudson (2009)
803:
797:, p. 967
796:
795:Hudson (2009)
791:
785:, p. 155
784:
779:
773:, p. 154
772:
767:
761:
757:
752:
746:, p. 967
745:
744:Hudson (2009)
740:
734:, p. 966
733:
732:Hudson (2009)
728:
721:
716:
707:
701:, p. 965
700:
699:Hudson (2009)
695:
689:
685:
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674:, p. 963
673:
672:Hudson (2009)
668:
662:, p. vii
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566:Express trust
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945:Bibliography
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862:
850:
845:, p. 22
838:
826:
814:
802:
790:
783:Burns (1992)
778:
771:Burns (1992)
766:
755:
751:
739:
727:
722:, p. 95
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489:Lord Millett
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448:decision in
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188:Secret trust
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120:
117:Lord Millett
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101:Lord Millett
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82:
75:
74:decision in
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55:
53:
38:
30:
25:
18:
454:, in which
352:Formalities
204:Beneficiary
1018:: 93–115.
637:References
631:Quistclose
622:Quistclose
613:Quistclose
609:Quistclose
587:Quistclose
572:Quistclose
560:Quistclose
556:Twinsectra
552:Quistclose
535:Quistclose
531:Twinsectra
522:Quistclose
504:Quistclose
499:Quistclose
485:Quistclose
481:Quistclose
477:Quistclose
460:Quistclose
433:Quistclose
176:Quistclose
128:Definition
121:Quistclose
111:Quistclose
85:Quistclose
57:Quistclose
26:Quistclose
209:Protector
47:Briggs LJ
1058:Category
303:Remedies
227:Statutes
113:trusts.
103:said in
357:History
347:Cy-près
331:Tracing
321:Damages
219:Trustee
214:Settlor
99:or, as
1041:
995:
976:
926:Ch 207
878:AC 584
620:, the
68:traced
890:
758:
686:
442:trace
339:Other
178:trust
63:trust
61:is a
59:trust
41:
1039:ISBN
993:ISBN
974:ISBN
1020:doi
491:in
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1014:.
1010:.
961:18
959:.
955:.
431:A
95:,
91:,
54:A
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1016:9
1001:.
982:.
420:e
413:t
406:v
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