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03/05/23 LAW OF TRUST(LAW 3711) 2
English Trust Pierre Le Paulle ; “The trust is the guardian angel of
Anglo-Saxon, accompanying him everywhere, impassively, from cradle to grave.
(Gerweyn Ll Griffiths The Guardian Angel Spreads Its Wings? Trusts and What They Bring to Legal Systems.)
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Developed from the concept of use to a more stable and established institution.
Used for variety of reasons. Uniquely British institution.
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4 Essential Elements of A trust
1) Trust property : the corpus or body 2) The trustee – the person or entity in
whom the corpus is entrusted. 3) Beneficiaries – the persons on whose
behalf the property is managed 4) The Deed or instructions the documents
which outlines the manner in which the trust property is to be dealt with on behalf of the beneficiaries
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1) Trust property : The corpus or body Specific property – land or personal property Lord Browne- Wilkinson In Westdeutche v
Islington London Borough Council [1996] 2 All ER 961 at 988
“In order to establish a trust there must be identifiable trust property”
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2) The trustee The person or entity in whom the
corpus is entrusted Trustees become owners at common
law and are given control of the property
Trust property need to be constituted in the hand of trustee
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3) Beneficiaries The person who is entitled to the trust
property. The settlor / trustee may be the
beneficiary or one of the beneficiaries.
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4) The Deed When a person created a trust through
trust instruments, he is known as settlor.
Sometimes, trust can be created verbally.
It can also be created in a will – the person who created the trust is known as testator
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Article 2 of the Hague Convention on the Law Applicable to Trusts On Their Recognition
(English Recognition of Trust Act 1987)
For the purpose of this Convention, the term ‘trust’ refers to the legal relationship created
–intervivos or on death- by a person, the settlor, when assets have been placed under the control
of a trustee for The benefit of a beneficiary or for specified purpose.
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A trust has the following characteristic;a) The assets constitute a separate fund and
are not part of the trustee’s own estateb) Title to the trust assets stands in the name of the
trustee or in the name of another person on behalf of the trustee;
c) The trustee has the power and the duty, in respect of which he is accountable, to manage, employ
or dispose of the assets in accordance with the terms of the trust and the special duties
imposed upon him by law
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Classification of Trust Many ways to categorize trust. Broadly classified into: Depends on the objectives of the trust.
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From the point of view of intent to create trust
a) Express or declaredb) Presumed or implied; or
c) Constructive trust
From point of view if the objects of the trust;
a) Private orb) Public or charitable
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From the point of view of thenature of the duties imposed
upon trustee a) Simple orb) Special
From the point of view of the form of declaration
of trusta) Executed or b) Executory
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TYPES OF TRUST
Private Trust Public Trust
Express Trust
Constructive
Resulting
Charitable
Non charitable
Offshore
Executed & ExecutoryCompletely Constituted & Incompletely Constituted
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Trust and other concept. Trust and Bailment Trust and Agency Trust and Contract Trust and Debt Trust and Power.
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TRUST AND BAILMENT
Limited to personal chattel All property
Bailee : no fiduciary duties Trustee : fiduciary duties
Bailor : Legal ownershipBailee: special property
Trustee: Legal ownershipBeneficiary : Legal Ownership
Unauthorised sale by bailee: no good title
Unauthorised sale by trustee: to bona fide purchaser : good title
Bailment: Goods are delivered to a bailee to he held for a particular purpose upon an express/implied conditionthat it will be redelivered to the bailor when the purpose
has been carried out
Bailment Trust
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TRUST AND AGENCY
Agency Trust
Personal right Proprietary right
Based on contractual relationship
Based on fiduciary relationship
Act according to business agency
Act according to the trust deed
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TRUST AND CONTRACT
Doctrine of Privity Can be enforced by beneficiary
Personal Remedy Proprietary RemedyTerms of contract can be varied
Terms can only be varied under certain ctc
Limitation Period for BOC Limitation Period for BOT
Contract TrustBased on agreement Consideration
Based on intention
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Japanese Trust Very different from UK : trust is a legal
medium for property management. In Japan : all property belongs to the
family : family estate. Properties were also donated for
religious purposes No clear and defined systematic type
of trust in Japan
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Property management Civil Code of Japan : based on the principles
of German private law It satisfied every needs for property
administration : from family law – to will implementation
No need for introduction of trust Concept of act of trust and ‘trust –like act
were referred to in some court rulings and discourse
Eg : mortgage-like contract ,a pension entitlement.
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Modern trust system First introduced from the middle of the Meiji
period Can be found in article 9 paragraph 4 of
Industrial Bank of Japan Act 1900 Later in Secured Bond Trust Act 1905 :
concept of trust was put to use for the first time
Introduced Trust Act 1922 in the Parliament
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China’s Trust Law Trust business has been in existence
for over 20 years. One of the weakest and least
regulated industries. In 2001, government took steps in
introducing new trust law
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China’s Trust Law Law of People’s Republic of China on
Trusts (“Trust Law”) Adopted on 28th April 2001 In force on 1st October 2001 8 years of hard work by various
government committees. Extensive survey was conducted on
trust law in many jurisdictions.
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Impact. Enhance China’s further economic
development with respect of many matters.Eg
Corporate Organization Preservation of overseas state assets Individual estate planning NGO –charitable trust.
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The trust Law closely follows the trust laws in Taiwan, Japan and Korea- Anglo-American law of trusts.
Embodied many principles found in the common law countries.
Certain unique principles which are inconsistent with Anglo- American law of trusts,
.