Hi! I have my exams in August (they were deferred due to an illness). I was revising Equity and came across the three different theories for disposition of beneficial interest (declaring yourself trustee for a 3rd party).
The three theories are regarding bare sub-trusts and non-bare sub-trusts. They are as follows:
- According to David Hayton, under the bare sub-trust, the original beneficiary can drop out of the picture (original beneficiary disappears, and the trustee simply holds the property on trust for x). The replacement of the original beneficiary with the sub-beneficiary is a s53(1)(c) disposition.
- The Penner theory says that a sub-trust is not a s53(1)(c) disposition, it is simply the declaration of a new trust, and because of this, we do not need s53(1)(c).
- Brian Green says we do need s53(1)(c) for a bare sub-trust because, the statute does not specifically say how much of the beneficial interest must be disposed of. so, he says, if it is all, it is s53(1)(c), and if it is some, it is also s53(1)(c).
In the exams, would I need to state all three theories, or could I just state one of them? The only one of those to have relevant approval in case law in the Penner theory in Nelson v Greening & Sykes.
Thank you! (:
Equity & Trusts - Disposition of beneficial interest.
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