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Lanbuk on the Law of Equity and Trusts: model answers

Essay and problem questions answered with IRAC: issue, rule, application, conclusion.

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Problem

The uncle's house

In 2020 Kemoh paid the whole price of a house in Bo, which was conveyed into the name of his nephew Sorie, aged 30. Kemoh said nothing about why. Sorie lived there and paid nothing. In 2025 Kemoh, who is ill, gives Sorie's sister Isata the key to a box holding his savings book, saying 'If I don't come back from the hospital this is yours.' He then writes a letter to Sorie: 'I want you to have the house.' He recovers, and later dies. Sorie is his executor. Advise Isata and Sorie.

issue

Does Sorie own the house beneficially, or hold it on resulting trust for Kemoh's estate; and did Isata receive a valid donatio mortis causa of the savings?

rule

Where A pays for property put in B's name, equity presumes a resulting trust for A: Dyer v Dyer; Westdeutsche v Islington. The presumption of advancement traditionally applies only to a father or a person in loco parentis, and to a husband: Bennet v Bennet. It is rebutted by evidence of a gift. An imperfect lifetime gift is perfected if the donee becomes executor and the donor's intention to give continued until death: Strong v Bird; Re Gonin. A donatio mortis causa requires contemplation of death, delivery of the subject matter or dominion over it, and a gift conditional on death; it is revoked by recovery: Cain v Moon; Sen v Headley.

application

Kemoh is Sorie's uncle. Unless he stood in loco parentis, no presumption of advancement arises, so Sorie presumptively holds the house on resulting trust for Kemoh. The letter is strong evidence that Kemoh meant Sorie to have the house. Sorie already has the legal title, so all Kemoh had to give was his equitable interest. Section 9 of the Statute of Frauds requires a disposition of an equitable interest to be in signed writing, and a signed letter saying he wants Sorie to have the house may itself be enough. If it is not, Sorie is the executor, so Strong v Bird may perfect the gift, provided the intention was to give at once and continued until death. Nothing on the facts shows a change of mind. As to Isata, the gift was made in contemplation of a specific risk, the hospital stay, and dominion was given through the key. But it was conditional on death from that illness, and Kemoh recovered. Recovery revoked the gift. Nothing was redelivered later, so the savings form part of the estate.

conclusion

Sorie probably keeps the house beneficially, either because the presumption is rebutted by the letter or because Strong v Bird perfects the gift. Isata has no claim to the savings, which pass under Kemoh's will or intestacy.

Problem

The sealed letter

Fatmata's will leaves Le 100,000,000 'to my friends Hawa and Mariama on trust for the purposes I have made known to them'. Before signing, she told Hawa, but not Mariama, that the money was for her granddaughter. After signing, she gave Mariama a sealed envelope marked 'open after my death', which named a different beneficiary. She also left her car to her driver Alpha 'absolutely'; Alpha had agreed to sell it and give the money to her church. Advise on who is entitled to the money and the car.

issue

Is there a valid half-secret trust of the money, and in whose favour; and is there a fully secret trust of the car?

rule

Secret trusts need intention, communication and acceptance: Ottaway v Norman. For a half-secret trust, Blackwell v Blackwell and Re Keen require communication before or at the execution of the will, consistent with its terms. For a fully secret trust, communication may be made at any time before death, including by a sealed envelope the trustee knows contains the terms, and acceptance may be by silence: Moss v Cooper. A failed half-secret trust results to the estate. A fully secret trust binds the legatee who accepted it.

application

The will shows that Hawa and Mariama take as trustees, so the trust is half-secret. The communication to Hawa before the will satisfies Re Keen. The sealed letter to Mariama came after the will, so under Re Keen it is ineffective, and its different terms cannot be relied on. Since the trustees take jointly as trustees under the will, the communication to one before execution binds the trust property, and the trust is for the granddaughter. If the trust had failed, both would hold on resulting trust for the residuary beneficiaries, because the will shows they are not meant to benefit. As to the car, Alpha appears to take absolutely, so any trust is fully secret. He agreed to the terms before her death. Intention, communication and acceptance are present, so he holds the car or its proceeds on trust for the church.

conclusion

The money is held for the granddaughter. The sealed letter has no effect. Alpha holds the car on a fully secret trust for the church. A Sierra Leone court may be urged to drop the Re Keen rule, as other jurisdictions have, but it is the English law usually followed.

Essay

Has law and equity fused?

'The two streams of jurisprudence, though they run in the same channel, run side by side and do not mingle their waters.' Discuss whether this is still true, with reference to the Judicature Acts and later cases.

issue

Did the Judicature Acts 1873 and 1875 fuse only the administration of law and equity, or the substantive rules too?

rule

The Judicature Acts created one High Court applying both law and equity, with equity prevailing in conflict. Ashburner's view is that only administration was fused. Walsh v Lonsdale shows equity prevailing in one court. Lord Diplock called the metaphor mischievous and deceptive and said the systems had fused. Equitable remedies remain discretionary: American Cyanamid, Shelfer. Equitable interests remain subject to the bona fide purchaser rule: Pilcher v Rawlins. In Sierra Leone section 74 of the Courts Act 1965 receives the common law and equity as separate bodies.

application

The case for fusion of administration only is strong. A claimant who proves a breach of contract is entitled to damages as of right, but specific performance and injunctions remain discretionary and subject to the maxims. Legal rights bind everyone, equitable interests do not bind equity's darling. Trusts still split title. These differences would vanish if the rules had truly fused. On the other side, courts now mix doctrines freely: equitable compensation is shaped by common-law ideas of causation, as Target Holdings v Redferns shows, and estoppel crosses the line. Walsh v Lonsdale shows a single court giving effect to equity rather than law. The better view is that the procedure is fused, and the rules influence each other, but the distinct character of equitable rights and remedies remains.

conclusion

Ashburner's metaphor is still broadly true as a description of rights and remedies, though the waters now mix at the edges. In Sierra Leone the reception provision itself keeps law and equity as distinct sources.

Problem

The trustee's side deal

Ibrahim is a trustee of a family trust that owns 40 per cent of a Freetown logistics company. Through the trust's shares he is elected a director and paid fees. At a board meeting he learns the company will soon win a big contract, and he buys more shares personally. The share price doubles. The trust also gains. A beneficiary sues. Advise Ibrahim.

issue

Must Ibrahim account for his fees and his share profit?

rule

A trustee must not profit from his position or place himself where duty and interest may conflict: Keech v Sandford; Boardman v Phipps. Profits are held on constructive trust. Fees received as a director through the use of trust shares are prima facie trust property unless the instrument or the beneficiaries authorised them. The court may allow remuneration for work and skill: Boardman v Phipps. Fully informed consent of all adult beneficiaries is a defence.

application

Ibrahim became a director because of the trust's votes, so the fees came from his position. Unless the trust instrument allowed him to keep them, or the beneficiaries consented with full information, he must account for them. The information about the contract came to him as a director appointed through the trust. Buying shares with it put his interest in conflict with his duty, as in Boardman. That the trust also gained, and that he may have acted honestly, is no defence. He holds the shares, or their profit, on constructive trust. The court may give him an allowance for any genuine skill or work, though it is less likely to do so where he did not disclose.

conclusion

Ibrahim must account for the fees and the share profit, subject to any allowance the court considers fair. He should have sought the consent of the beneficiaries, or of the court.