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Moot Questions

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Moot Question 1

In the Supreme Court of the United Kingdom

Hill v Renais

  1. Jacquie Hill and Simon Renais met at a party in 1997, and when their son, Harry, was born in 1998, they decided to buy a property together. They found an end-of-terrace house, 8 Brook Lane, which was for sale at £195,000. Simon sold his flat and contributed £60,000 to the purchase price; the balance was raised by a mortgage. They agreed that Jacquie should give up her job as a chef at a local restaurant so that she could look after Harry. Simon told Jacquie that although it would be their house, he thought it best if legal title to 8 Brook Lane was in his name, simply because he would be paying the mortgage and it made the paperwork easier. Simon was an engineer with a large international company with interests in East Africa and the Far East. As far as Jacquie was concerned, Simon was secretive about his actual earnings, but she acknowledged that he received a good salary which he used to pay the mortgage, the household bills and an allowance to Jacquie to cover her expenses. In 1999, twin girls were born, and following Simon's promotion to head of his department, he and Jacquie decided to buy a larger family home.
  2. In 2000, they sold 8 Brook Lane for £365,000, making a profit of £170,000, and purchased a detached house, Pendrells, in the village of Hamfeld for £550,000. The purchase price was paid for with the profit of £170,000 and the balance was raised by a mortgage. Once again, and for the same reason as before, Simon persuaded Jacquie that legal title to Pendrells should be in his sole name.
  3. Simon's new role as head of department meant that he was required to travel to Dar es Salaam and Nairobi for several months during the year, and he relied on Jacquie to keep the house and large garden going single-handed and to care for the three young children. Simon's new job also involved entertaining clients from Tanzania, Kenya and the Far East. Jacquie's skill as a chef was particularly useful and she spent many unpaid hours each day cooking and catering for Simon's clients.
  4. In 2010, Jacquie's widowed mother died, leaving Jacquie and Jacquie's brother, John, £200,000 to be divided between them in equal shares. Simon had long been talking about a loft conversion to provide two extra bedrooms for their frequent guests and told Jacquie that he had received a quotation that this would cost £100,000. Jacquie agreed that her inheritance should be used for this building work.
  5. In 2014, Jacquie discovered that Simon had been having an affair with one of his colleagues and that the loft conversion had cost only £80,000, the remaining £20,000 having been spent by Simon on holidays with his lover, which Jacquie had been led to believe were business trips. When Jacquie said that she wished to separate and wanted her share in the home, Simon argued that the house belonged to him alone.
  6. In the High Court, Blakeney J, applying Lloyds Bank v Rosset [1991] 1 AC 107, held that as there was no evidence of an express understanding between the parties of a common intention to share the beneficial interest in the property, Miss Hill could not rely on an express common intention constructive trust to claim an interest in the property. Nor was it possible to infer a constructive trust as Miss Hill had made no direct contribution to the purchase price. Neither an express trust nor a resulting trust was appropriate given the facts of the case. Accordingly, Mr Renais was the sole beneficial owner.
  7. The Court of Appeal upheld the decision of Blakeney J. Miss Hill appealed to the Supreme Court on the following grounds:
    1. That the decision in Lloyds Bank v Rosset had been misinterpreted by the lower courts regarding the acquisition of a beneficial interest by Miss Hill;
    2. That, in the alternative, the decision in Lloyds Bank v Rosset was no longer good authority in sole legal owner cases and that the common intention to share the beneficial interest should be deduced objectively from the parties' conduct;
    3. That, regarding quantification, the parties' common intention was that they had an equal share in the beneficial interest.
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Moot Question 2

In the Supreme Court of the United Kingdom

Webster Co Ltd v Jeffreys

  1. Webster Co Ltd is an electrical engineering company. The managing director of the company is Sam Wong. John Jeffreys is a self-employed electrician who won almost £2 million pounds in the National Lottery in 2014.
  2. Sam Wong is a compulsive gambler and in February 2014 had gambling debts of £1 million pounds, which he was unable to pay. Through a mutual friend, Sam Wong was informed that Mr Jeffreys was seeking to invest his lottery winnings and he approached Mr Jeffreys in March 2014.
  3. Mr Wong subsequently negotiated an artificial and unauthorised loan agreement between Webster Co Ltd and John Jeffreys under which John Jeffreys would lend £1 million to Webster Co Ltd for a return of 10 per cent to be paid in March 2015.
  4. On receipt of the £1 million, Mr Wong paid off his gambling debts.
  5. In March 2015, Mr Wong transferred funds from Webster Co Ltd to repay the loan and the agreed interest.
  6. In August 2015, Mr Wong was declared bankrupt and a few weeks later was convicted of fraud.
  7. Webster Co Ltd brought proceedings in the Chancery Division of the High Court of Justice to recover the funds transferred to Mr Jeffreys on the basis that they had been received by Mr Jeffreys with knowledge that they resulted from a breach of trust or fiduciary duty by Mr Wong. Reed J held that liability for knowing receipt depended on the recipient of the money having sufficient knowledge of the circumstances so as to make it unconscionable for him to retain the benefit of the receipt. BCCI (Overseas) Ltd v Akindele [2000] 4 All ER 221 applied. Reed J found that the Mr Jeffreys' conduct was not unconscionable. The Court of Appeal upheld this decision.
  8. Webster Co Ltd now appeal to the Supreme Court on two grounds:
    1. The decision of the Court of Appeal in BCCI (Overseas) Ltd v Akindele establishing the test of unconscionability was imprecise and incapable of being applied as it gave no guidance regarding the kind of knowledge that was relevant when determining unconscionability.
    2. In the alternative, liability in equity for receipt of unauthorised funds by a third party should be strict as in the common law action for ‘money had and received' in Re Diplock [1948] Ch 465.

Dilemma Questions

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Dilemma Question 1

On September 2016, Alex was diagnosed with a serious illness and decided he had better do something about his large shareholding in Zafra Ltd before it was too late.

So the following week, having found his Zafra Ltd share certificate, he handed it to his sister, Carol, together with a completed share transfer form in her favour, and asked her to hold all his Zafra shares on trust for her son, David. Carol thanked him and agreed to do this.

The next day, Carol sent the share transfer form and the certificate to Zafra Ltd so that the shares could be registered in her name as trustee, but was informed a week later than the directors of Zafra Ltd had exercised a power contained in the company's articles of association and had refused registration.

The next day, Carol returned the share certificate to Alex, who passed the certificate to his brother, Max, saying that he would like Max to have the Zafra shares.

Three weeks later, Alex died, with the Zafra shares still in his name but the share certificate in Max's possession. By his will, Alex named his brother, Max, as his executor but gave all his personal property to his sister, Carol.

The dilemma

  • Who is entitled to the shares?
  • Are they held on trust for David under the rule in Re Rose?
  • Or is there a valid gift to Max under the rule in Strong v Bird?
  • Or is there a valid gift to Carol under the will?
  • Or is there an automatically constituted trust for David under the rule in Re Ralli?

Dilemma Question 2

By his will made in June 2016, Philip devised all his real estate to Heather, ‘trusting that she will carry out my instructions relating thereto'. The will was witnessed by Anna. On 16 August 2016, Philip telephoned Heather and asked her if she would hold any property that he left to her in his will on trust for Jane and Anna and herself in equal shares. Heather agreed to do so.

Jane and Philip were involved in a car accident on 10 September 2016. Jane died immediately and Philip died a few days later, leaving a real estate worth £900,500.

The dilemma

  • Is there a half-secret trust or a fully secret trust?
  • If it is a half-secret trust, is it valid?
  • If it is a fully secret trust, is it valid?
  • Does it matter that Anna witnessed the will?
  • Will Jane's interest lapse?
  • Can a secret trustee take as a secret beneficiary?
  • Can there be an oral secret trust of land?