Sample Report On Equity and trusts
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Equity and trust body of law is developed by UK parliament in order to govern the contractual agreements of trust and unincorporated associations in an appropriate manner. For this aspect, legislatory terms are described which are considered by the court of panel in order to provide judgement in situation of dispute. Present study is based on the evaluation of provided case scenario of Brighton Orchid Growing Society for the allocation of their assets in situation of dissolution of association. For this aspect, ILAC approach will be used in order to provide legal outcome of the set scenario. Case laws will be linked to the provisions of English law and previous case precedents for better understanding.
ISSUE IN CASE SCENARIO In the given case scenario, there are various issues. First issue is related to the status of association are they for society or for members. Further, donors of all the funds are not identifiable. Another issue is of allocation of assets that are available with the trust. It is because; funds were collected for the specified purpose (i.e. formation of glass house and cultivation of orchids in Sussex) but due to decision of the current president, assets of society are proposed to be equally distributed among members. Further, issue in this case is linked to the allocation of surplus funds in situation where club is wound up by the unanimous decision of members.
LEGAL ASPECTS By considering the provisions of English law, equity refers to the fairness. Further, trust law is set of rules and regulations developed for the situation in which one individual is trusted to look out the affairs of another person (Pettit, 2012). Trust can be defined as a relationship in which property is held by one party for the benefit of another in accordance with the described Toll Free No: +1 213-929-5632 E-mail: help@instantessaywriting.com Get best Essay Writing by the subject oriented experts of Instant Essay Writing, we provide best writing services to students at affordable price.
terms. Assets of trust are held by the trustee for the benefit of beneficiaries. This aspect also includes governance of situation in which charities are provided through the will of person to the particular trust.
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According to the provisions of English law, trust is required to make use of funds as per the described original purpose. Motive of the donor is required to be satisfied as per the norms of Charity Act 2006. This fact was also stated in the case of Re Delany [1902] 2 Ch 642. Further, provision of perpetuity states that purpose may last forever in the trusts (Hudson, 2012). Due to this aspect, offending of rule against the perpetual trusts is not acceptable unless specification is stated in the gift. In other words, it can be stated that trust should make utilization of funds for which it was proposed to (Appelbaum, Batt and Clark, 2013). However, alteration of purpose is
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said to be valid if funds are used for the other similar purpose but not for the unjust benefit. This factor is supported by the norms of English doctrine according to which trustees are entitled to make other use of trust property. However, use of funds by the trustees should be for justifiable purpose. Trustees are provided with the legal titled of property of trust but they are obliged to act fair and good for the beneficiaries. By considering this aspect, it can be said that trustees are required to act in accordance with their fiduciaries duties (Baird, 2013). They should not make unjustifiable use of the property of trust and they act in the interest of public or beneficiaries. In situation where trustees violate such fiduciaries duties, they are obliged for the self dealings. For such self dealing actions, court is entitled to provide order of reverse actions, return of available profits and can impose other similar sanctions (Charles and Draper, 2012). Trust can be governed by single or multiple trustees and in most of the jurisdictions; it is supported by contractual agreement or deed. As per the norms of English law, an unincorporated association is formed by two or more members. These associations are bound by the rules that are developed by society and legislation. For the governance of rights of such associations, several theories are proposed by the English law (Sitkoff, 2013). In such associations, a transfer can be made in direct or indirect favour to joint members or in common. In alteration to this, funds transferred to this aspect can be under the terms of a private purpose trust. In several situations, purpose trusts does not get succeeded for the need of a beneficiary and this aspect can lead to the result in the gift failing. However, purpose trusts are said to be valid as in various situations, the rights are associated
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with the unincorporated associations (Baker, 2012). In accordance with the norms of dominant theory, rights regarding association are transferred to the members in an absolute manner. However, for the applicability of this theory, trust should be created for the benefit of members and it must be supported by the contractual deed.
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Kindly Mail us at: help@instantessaywriting.com By considering this aspect in situation of dissolution, allocation of rights related to the association will vary as per the way they were held. By considering the nature of purpose trust, it may or may not survive after the dissolution of association. In situation where it fails due to decision of wound up, then the rights will be held on resulting trust for the contributors (Strong, 2012). However, this provision will not be applied if members have renounced their right to such a trust in their favour. Further, in situation where the rights of association are held subject to contract, then assets will be distributed among the existing members of trust. This allocation of assets will be supported by the terms of contracts (either by inter se or by an implied term
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according to contribution). If, as a consequence of contract or legislation, no member is entitled for the claim then the rights related to the association will pass to the Crown in form of Bona vacantia. In accordance with the legal provisions of Equity and trusts, if there is situation of dissolution of an unincorporated association then assets available with the association are required to be distributed as per the norms of contract law. For this aspect, deed prepared by parties (members of association) will be considered (Equity and trusts, 2012). However, in situation where there is no such contract, then legal presumption is applied that assets will be equally distributed among the members. In accordance with the case of Re Bucks Constabulary Widows and Orphans Fund Friendly Society (no 2) [1979] 1 All ER 623, assets of the association are required to be equally distributed in situation where there is absence of contractual norms. In this, decision was provided by Walton J as per the norms of “bona vacantia*”. Cited case was referenced by Hanchett‐ Stamford v Attorney‐ General. *Bona vacantia is Latin phase used for the goods which do not have owner. It is a legal concept associated with the properties on which none of the parties have title of ownership. It is common law doctrine used for the distribution of assets of unincorporated associations, companies and in some failed trust property. However, in accordance with the case facts of Re West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts [1971] Ch 1, fund was developed by the association for the payment of allowances to the widows and dependants of the deceased individuals. Members of the association had decided to wind up the fund. Money in this association was
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collected by members themselves, from the boxes, from donation, legacies, sweepstakes and raffles. In this case scenario, court had held that the entire collected money by the association was bona vacantia (except the amount attained from legacies and donations). In this case, judicial party cited that members are not entitled to make claim on property on the basis of fact that such rights are described in their contractual agreement. By considering different sources of funds, court of law held that:
Funds contributed by the members do not provide them right to make claim of the residue thus, this amount will be bona vacantia.
Contract with the raffles and sweepstakes does not provide them right to make claim for the left over thus, this money also belongs to the bona vacantia.
Collection box money is absolute bona vacantia because public had contributed without having intention to have refund even if there is event of dissolution.
However, funds collected from the donation and legacies are intended money and it should be retained only for the period where fund is operated. By considering these facts, anything left over will be considered as resulting trust.
Distribution of property among members is only possible in situation where the formation of group is done for the benefits of members.
APPLICABILITY OF LEGAL ASPECTS As per the described legal aspect, it can be noticed that given case scenario is based on the provisions of purpose trust. In accordance with the provided case scenario, Brighton Orchid Growing Society is a trust with having one hundred members. Society had planned for the Toll Free No: +1 213-929-5632 E-mail: help@instantessaywriting.com Get best Essay Writing by the subject oriented experts of Instant Essay Writing, we provide best writing services to students at affordable price.
building of new glass house. In order to raise funds for this glass house, they had organized a fancy dress ball event. From this event, they are able to raise ÂŁ10000. After two weeks of the ball, Annabelle (former president of the society) had died and in his will, he left ÂŁ1 million for the society. However, these funds were required to be utilized for the purpose of cultivation of orchids in Sussex and for the erection of a bronze statue of Lady Slipper orchid.
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Kindly Mail us at: help@instantessaywriting.com One month later of the death of former president, general meeting was called by the current president. He had proposed that growing of orchid is not a sound idea and further, this society should be wound up by the distribution of assets in an equal share to all the current members. This proposal was unanimously accepted and this decision was communicated to the treasurer. However, daughter of Annabelle and local people were not happy with this decision. They have collected the funds from public for the development of glass house through
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organizing a fancy dress ball event. However, later president of society died and he had left amount for trust for the development of orchid. New president had proposed for the dissolution of trust by making equal distribution of the available assets. Proposed decision by the new former president is not justifiable because funds attained through will and fancy dress ball event is required to be used for the specified purpose. In this aspect, trustees have duty to accomplish the work for which funds were collected. By considering the case reference of Re West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts [1971] collected funds by association will be transferred under provision of bona vacantia. It is because, provided funds by members and public does not mean to be refunded in situation where association is subjected to the dissolution.
CONCLUSION By considering the described legal facts, conclusion can be drawn that members of the association have duty to accomplish the work for which funds were collected. For this purpose, they are required to develop the glass house from the funds collected from the event of fancy ball dance. In addition to this, amount provided through the will of Annabelle should be used for the work of cultivation of orchid. In accordance with the above described provisions, it can be said that surplus funds or available assets will not be distributed equally amongst the members. Local public and daughter of Annabelle have right to interfere in this decision. It is because; in the described case scenario, decision of Re West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts [1971] Ch 1 will be applied. Surplus of the trust assets will be continued in the form of Toll Free No: +1 213-929-5632 E-mail: help@instantessaywriting.com Get best Essay Writing by the subject oriented experts of Instant Essay Writing, we provide best writing services to students at affordable price.
resulting trust. By the virtue of unanimous decision, trust can be wound up but available surplus cannot be equally distributed among existing numbers. As per the evaluation, it can be said that proposal made by the new president is not valid because it is contradictory to the legislative aspects. Due to this aspect, assets will not be distributed even they will be supported by unanimous consent of the members.
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REFERENCES Books and Journals Pettit, P. H., (2012). Equity and the Law of Trusts. Oxford University Press. Hudson, A., (2012). Equity and trusts. Routledge. Appelbaum, E., Batt, R. and Clark, I., (2013). Implications of financial capitalism for employment relations research: evidence from breach of trust and implicit contracts in private equity buyouts. British journal of industrial relations. 51(3). pp.498-518. Baird, A. J., (2013). Acquisition of UK ports by private equity funds. Research in Transportation Business & Management. 8. pp.158-165. Charles, A. and Draper, H., (2012). â&#x20AC;&#x2DC;Equivalence of careâ&#x20AC;&#x2122;in prison medicine: is equivalence of process the right measure of equity?. Journal of medical ethics. 38(4). pp.215-218. Sitkoff, R. H., (2013). Trust law as fiduciary governance plus asset partitioning.Harvard University Law & Economics Discussion Paper. (711). Baker, J. R., (2012). Failure and Promise of Common Law Equity in Domestic Abuses Cases, The. Loy. L. Rev. 58. p.559. Strong, S. I., (2012). Arbitration of Trust Disputes: Two Bodies of Law Collide.Vand. J. Transnat'l L.. 45. p.1157. Online Equity and trusts. (2012). [Online]. Available through <http://www.qlts.com/blog/examtips/question-of-the-week-equity-and-trusts>. [Accessed on 29th December 2015].
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