Trusts Law

Penn v Lord Baltimore (1750) 1 Ves Sen 444

• Concerned a boundary dispute between Pennsylvania and Maryland.

• A 1732 agreement set the border, but Lord Baltimore claimed it wasn’t binding.

• The Penn family asked the Court of Chancery to enforce it.

• The court held the agreement was binding in equity and issued an injunction.

Wolverhampton City Council v London Gypsies and Travellers [2023] UKSC 47

• Local authorities obtained “newcomer injunctions” to stop Gypsies and Travellers camping on land without permission.

• The Supreme Court upheld that courts can grant injunctions against persons unknown, even future ones, but only in exceptional cases.

• Requirements: strong justification, full disclosure, procedural safeguards, and proportional limits on time and area.

Somani Hotels Ltd v Epping Forest District & Anor [2025] EWCA Civ 1134

• Public protest cannot justify an injunction (“incentivises protest”).

• Government duty to house asylum seekers must be considered (“wider picture”).

• Interim injunctions should preserve the status quo pending trial.

• Council’s conduct (delay/acquiescence) can weigh against granting injunction.

• Court did not decide merits of planning breach, only interim relief.

Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1

• Defendant leased a supermarket unit in a shopping centre for 35 years.

• Lease required the store to remain open during normal business hours.

• After closing 27 other stores, the defendant closed this supermarket too.

•  Plaintiffs sought specific performance to force it to reopen, or damages.

• House of Lords refused specific performance; damages were allowed.

• Specific performance would cause greater hardship to defendant than harm to plaintiff.

National Union of Rail, Maritime and Transport Workers & Anor v Tyne and Wear Passenger Transport Executive (t/a Nexus) [2024] UKSC 37

• Nexus tried to rectify 2012 collective agreement to change shift allowance calculation.

• Supreme Court dismissed: collective agreements not legally enforceable between employer and union.

• s13 ERA claims (unauthorised deductions) can argue “rectified” terms to decide proper wages.

• Rectification only applies to enforceable contracts, not collective agreements.

Marley v Rawlings [2014] UKSC 2, [2015] AC 129

• Husband and wife accidentally signed each other’s wills due to solicitor error (1999).

• Wife’s estate passed to husband; on his death, mistake discovered.

• Court considered if rectification under s20 Administration of Justice Act 1982 could fix it.

• Supreme Court: Rectification allowed because it was a clerical error, giving effect to the testator’s true intentions.

Saunders v Vautier (1841) 4 Beav 115

• Father left his son stock with a trustee, said he could get it at 25

• At 21, he wanted to terminate the trust

• Held: he could terminate the trust; absolute consent of all beneficiaries (he was the sole beneficiary); of an adult age and of sound mind

Morice v Bishop of Durham (1805) 32 ER 656.

• A bishop was granted sole executorship with wide discretionary power over funds in a bequest

• The trust could not be valid as a private trust due to the lack of identifiable beneficiaries

• Maxim that the court must control the execution of a trust, necessitating its reviewability

• For a trust to be effective, the subject and objects must be ascertainable, and if maladministration occurred, the court should be able to reform and direct a due administration

Lambe v Eames (1870-71) LR 6 Ch App 597

• Testator left estate to widow “to be at her disposal in any way she may think best, for the benefit of herself and family.”

• Widow later left part to an illegitimate grandson, challenged by daughter -> word 'family' created a trust and illegitimate = not family

• Trust vs absolute gift

• The widow took an absolute interest, not trust. Wording = wish and not legal obligation; no trust unless intention is clear and certain

Paul v Constance [1977] 1 WLR 527.

• T separated from his wife (D) and went to live with another woman, C

• T deposited money including both his and C’s bingo winnings in an account in his name, from which C would also withdraw money

• T told C that ‘the money is as much yours as mine’

• When T died, D claimed that the money in the account passed to her by intestacy

• T had created a trust over the account in favour of C

Re Goldcorp Exchange Ltd [1995] 1 AC 74.

• Customers bought unallocated bullion which was never separated or identified.

• The company became insolvent; customers claimed a trust over the bullion to outrank the bank.

• Held: No trust or proprietary interest; subject matter was uncertain (unascertained goods).

• Promises to segregate bullion and representations of ownership did not create a trust

Hunter v Moss [1994] 1 WLR 452.

• The defendant owned 950 shares and orally declared a trust of 50 for the claimant without specifying which ones. No segregation occurred.

• Held: The Court of Appeal held the trust was valid; segregation was unnecessary for identical shares.

• For intangible, fungible assets (like identical shares), certainty of subject matter does not require physical identification, unlike tangible property (e.g. wine or bullion)

McPhail v Doulton [1971] AC 424.

• Trust for company employees, their relatives, and dependants; executors claimed it was invalid for uncertainty.

• Held: It was a trust, not a power; valid if it can be said whether any person is or is not within the class.

Re Baden’s Deed Trusts (No 2) [1973] Ch 9.

• Follow up case after McPhail

• The court confirmed a trust is valid if beneficiaries can be identified conceptually.

• It distinguished conceptual uncertainty (invalid) from evidential difficulty (acceptable).

• “Relatives” and “dependants” were held sufficiently certain.

Vandervell v Inland Revenue Commissioners [1967]

• tried to donate shares to a charity via a trust company, with an option to repurchase.

• had he fully divested his beneficial interest for tax purposes?

• Held: the option was on resulting trust for Vandervell; he retained interest and was liable for dividends.

• beneficial interest not disposed of results back to settlor; oral directions can suffice if settlor controls legal and equitable title.

Pennington v Waine [2002] EWCA Civ 227

• Ada intended to gift 400 shares to her nephew, Harold, signing a transfer form and giving it to her agent, but failing to complete the transfer formalities. Harold relied on the gift to become a company director.

• Held: The donor (Ada) was deemed to hold the shares on constructive trust for the nephew (Harold), perfecting the imperfect gift.

• The shares were held to be equitably assigned because it would have been unconscionable for Ada to revoke the gift, as Harold had acted to his detriment (taking up directorship) in reliance on it.

• Exception to the Re Rose rule

Hudson v Hathway [2022]

• Couple bought Picnic House jointly. After separating, Hudson’s emails indicated he was relinquishing his interest. Hathway paid the mortgage and gave up claims on his assets, relying on this understanding.

• Held: Emails signed with a name can satisfy s.53(1)(c) LPA 1925; detrimental reliance is required for a constructive trust. Hathway’s reliance entitled her to the whole beneficial interest.

• Informal language suffices if intention is clear; reliance need not be financial; technological developments justify email signatures.

Frenkel v LA Micro [2024]

• The case considered whether a beneficiary can dispose of their entire beneficial interest in personal property (shares) orally to the legal owner, or whether s.53(1)(c) LPA 1925 requires signed writing.

• Held: A vendor-purchaser constructive trust of scintilla temporis arises between the beneficiary and trustee, effecting the disposal itself. Because it’s by constructive trust, s.53(1)(c) does not block an oral disposal.

• Supreme Court confirmed s.53(1)(c) applies to personal property as well as land, but the constructive trust mechanism allows oral agreements to suffice.

National Iranian Oil Company & Anor v Crescent Gas Corporation Ltd [2025]

• NIOC transferred London property (NIOC House) to a pension fund. CGC claimed the transfer was at an undervalue.

• NIOC argued it held the property on trust for the Fund, based on documents signed by agents.

• Held: A declaration of trust under s.53(1)(b) LPA 1925 must be signed by the settlor personally, not by an agent.

• The agent-signed documents did not satisfy the writing requirement, so the trust could not be recognised for this purpose. Transfer treated as undervalue.

Rochefoucauld v Boustead [1897]

• The defendant bought Ceylon estates at auction with an understanding to hold them for the claimant, but the deed made no express trust.

• Defendant later mortgaged the estates and became bankrupt. Claimant delayed formal claim for 14 years.

• Held: Defendant held the estates on constructive trust for the claimant. Equity will not allow formalities statutes to be used to commit fraud.

• Delay or bankruptcy did not defeat the claim; laches was not a defence.

Grey v IRC [1960]

• H transferred company shares to trustees and gave oral directions for them to hold the shares for grandchildren.

• Under s.53(1)(c) LPA 1925, a disposition of an equitable interest must be in writing and signed, so the oral directions were ineffective.

• The declarations of trust executed later were subject to ad valorem stamp duty.

Re Vandervell’s Trusts (No.2) [1974]

• instructed VTL to exercise a repurchase option using his children’s trust money, intending the shares for the children.

• No signed writing was made for the transfer of the equitable interest, raising s.53(1)(c) LPA 1925 issues.

• The Court of Appeal held a resulting/constructive trust arose for the children; formalities were not needed for personal property trusts.

Oughtred v IRC [1960]

• Mother and her son orally agreed to transfer his reversionary interest in shares to her; a deed transferring the shares was executed later.

• Did the oral agreement create a constructive trust disposing of the equitable interest, or did the signed deed effect the disposition under s 53(1)(c) LPA 1925?

• The House of Lords held the deed effected the disposition; the oral agreement alone did not satisfy the writing requirement.

Re Rose [1952]

• Husband transferred shares to his wife (and another) as gifts; he completed all steps on his side, but registration by the donee was pending when dividends accrued.

• Who was entitled to dividends before the donee completed registration?

• Held: Court held that once the donor had done everything required on his part, the gift took effect in equity; the shares were held on constructive trust for the donee.

T Choithram International SA v Pagarani [2001]

• Donor signed a trust deed creating a foundation and orally declared he was giving all his wealth to it; some assets were not fully vested in all trustees before his death.

• Was the oral declaration and partial vesting sufficient to constitute a valid gift to the foundation?

• Held: Privy Council held that the donor intended an immediate and absolute gift; property vested in him as trustee for the foundation, completing the gift.

London Borough of Merton Council v Nuffield Health [2023]

A registered charity, ran a gym charging £70–£80/month.

The council argued the fees excluded people of modest means, so the gym wasn’t being used for charitable purposes and shouldn’t get 80% business-rates relief under s 43(6) LGFA 1988.

Held (Supreme Court): Relief granted. You assess charitable use by looking at the charity’s overall purposes, not the affordability of one site. The gym was used wholly/mainly to advance Nuffield’s established charitable purpose (health), and that is enough.

Re Endacott [1960]

• Testator left the residue to a parish council “to provide some useful memorial to myself,” with no specification of what the memorial should be; executor sought directions on validity.

• Whether this wording created a valid trust (charitable or non-charitable) or was too uncertain to enforce.

• Held: The wording imposed a trust obligation, not an absolute gift, but the purpose (“some useful memorial”) was too vague and uncertain.

• The trust failed for uncertainty; it was neither charitable nor one of the recognised anomalous valid non-charitable purpose trusts.

Re Denley’s Trust Deed [1969] 

• Land was conveyed to a company and held on trust as a sports ground “primarily for the benefit of employees and secondarily for others the trustees may allow.”

• The company wanted to sell part of it, raising questions about the validity of the non-charitable purpose trust.

• Did the trust fail under the beneficiary principle because it was for a purpose rather than identifiable beneficiaries, or could the employees count as enforceable beneficiaries?

• Held: Trust valid,  employees were a definite class able to enforce the trust; the “direct or indirect practical benefit” to real people satisfied the beneficiary principle. Clauses allowing use by others were treated as a mere power rather than creating uncertainty.

Independent Schools Council v Charity Commission for England and Wales [2011]

• Independent Schools Council challenged parts of Charity Commission guidance requiring that fee-charging schools not exclude the poor and that fees not unreasonably restrict access, arguing this was wrong in law.

• Whether charging fees for education prevents a school from qualifying as charitable, and whether guidance imposing specific obligations on schools was legally valid.

• Held: Tribunal quashed the relevant parts of the guidance. Schools can charge fees without losing charitable status, provided they do not actively exclude the poor; de jure exclusion matters more than de facto effect, and trustees have wide discretion.