GDL Elite
REVISION MANUAL 2013-14

www.gdlelite.com

Copyright © GDL Elite 2013-2014

GDL Elite
GDL Elite Revision Manual 2013-2014
Copyright © 2013-14 GDL Elite. All rights reserved.
First paperback edition printed Fe...
GDL Elite
REVISION MANUAL 2013-2014

www.gdlelite.com

Copyright © GDL Elite 2013-2014

GDL Elite
Contents
1. Contract Law ....................................................................................................
5. Land Law .................................................................................................................
1.1 AGREEMENT AND INTENTION TO CREATE LEGAL RELATIONS
1. Introduction
1) Potential contracts
- Identify all potential cont...
3) Auctions
- General Rule: An auctioneer’s request for bids represents an invitation to treat. An offer is made when the ...
o (2) Unilateral Offer
General Rule: revocation can be communicated at any time before complete performance (GNR v
Witham)...
5.9 FREEHOLD COVENANTS
1. Introduction
Definition: a covenant is a promise contained in a deed (Dano v Earl of Cadogan)
1)...
3) It must have been the intention of the original parties that the burden should run
- An intention that the burden shoul...
6.7 UNINCORPORATED ASSOCIATIONS
General Principles
Rule against perpetuities (“rule against remoteness of vesting”): futur...
2) Outright Gift to present members absolutely (Leahy v AG for New South Wales)
- The “outright gift” interpretation inter...
GDL Elite
www.gdlelite.com

Copyright © GDL Elite 2013-2014

www.gdlelite.com
GDL Elite
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GDL Elite Revision Manual Sample

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The GDL Elite Revision Manual (full version available at www.gdlelite.com) is a comprehensive guide providing a structured approach to problem questions and essays across 70 topics covered on the Graduate Diploma in Law. Packed with concise summaries of the relevant black letter law and essential cases and structured in the problem and essay question format required to excel in exams, the Revision Manual is one of the most useful, relevant and comprehensive revision guides a GDL student can buy.

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GDL Elite Revision Manual Sample

  1. 1. GDL Elite REVISION MANUAL 2013-14 www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  2. 2. GDL Elite Revision Manual 2013-2014 Copyright © 2013-14 GDL Elite. All rights reserved. First paperback edition printed February 2014 in the United Kingdom A catalogue record for this book is available from the British Library. ISBN 978-0-9928338-0-0 No part of this book shall be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information retrieval system without written permission of the publisher. Published by Note Harbour Ltd For more copies of this book, please email: info@gdlelite.com Designed and Set by Note Harbour Ltd Printed in Great Britain Although every precaution has been taken in the preparation of this book, the publisher and author assume no responsibility for errors or omissions. Neither is any liability assumed for damages resulting from the use of this information contained herein. www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  3. 3. GDL Elite REVISION MANUAL 2013-2014 www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  4. 4. Contents 1. Contract Law .............................................................................................................................................................. 1 1.1 Agreement and Intention to Create Legal Relations .............................................................................................................................. 1 1.2 Consideration, Promissory Estoppel and Duress................................................................................................................................... 7 1.3 Terms and Exemption Clauses ............................................................................................................................................................ 10 1.4 Mistake ................................................................................................................................................................................................ 18 1.5 Misrepresentation ................................................................................................................................................................................ 20 1.6 Privity of Contract ................................................................................................................................................................................ 25 1.7 Discharge, Breach and Frustration ...................................................................................................................................................... 27 1.8 Remedies............................................................................................................................................................................................. 32 2. European Union Law ............................................................................................................................................... 37 2.1 Direct Effect, Indirect Effect and State Liability .................................................................................................................................... 39 2.2 Sex Discrimination ............................................................................................................................................................................... 42 2.3 Competition Law 1 ............................................................................................................................................................................... 45 2.4 Competition Law 2 ............................................................................................................................................................................... 48 2.5 Free Movement of Goods 1 ................................................................................................................................................................. 51 2.6 Free Movement of Goods 2 ................................................................................................................................................................. 53 2.7 Free Movement of Persons ................................................................................................................................................................. 55 2.8 Freedom to Provide and Receive Services ......................................................................................................................................... 58 2.9 Freedom of Establishment ................................................................................................................................................................... 60 3. Tort Law .................................................................................................................................................................... 65 3.1 Trespass to the Person ....................................................................................................................................................................... 67 3.2 Land Torts ........................................................................................................................................................................................... 69 3.3 Defamation .......................................................................................................................................................................................... 77 3.4 General Negligence ............................................................................................................................................................................. 85 3.5 Vicarious Liability ................................................................................................................................................................................. 95 3.6 Employer’s Liability .............................................................................................................................................................................. 98 3.7 Professional and Clinical Negligence................................................................................................................................................. 100 3.8 Occupier’s Liability ............................................................................................................................................................................. 103 3.9 Product Liability ................................................................................................................................................................................. 108 4. Criminal Law........................................................................................................................................................... 115 4.1 Basic Principles of Criminal Law ....................................................................................................................................................... 117 4.2 Murder ............................................................................................................................................................................................... 121 4.3 Involuntary Manslaughter ................................................................................................................................................................... 125 4.4 Non-Fatal Offences Against the Person ............................................................................................................................................ 127 4.5 Sexual Offences ................................................................................................................................................................................ 133 4.6 Drug Offences.................................................................................................................................................................................... 138 4.7 Theft .................................................................................................................................................................................................. 144 4.8 Burglary ............................................................................................................................................................................................. 148 4.9 Robbery ............................................................................................................................................................................................. 151 4.10 Making off without Payment............................................................................................................................................................. 153 4.11 Fraud ............................................................................................................................................................................................... 154 4.12 Blackmail ......................................................................................................................................................................................... 157 4.13 Criminal Damage ............................................................................................................................................................................. 159 4.14 Inchoate Offences ............................................................................................................................................................................ 162 4.15 General Defences ............................................................................................................................................................................ 165 www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  5. 5. 5. Land Law ................................................................................................................................................................ 173 5.1 Basic Principles of Land Law............................................................................................................................................................. 175 5.2 Registered and Unregistered Land .................................................................................................................................................... 177 5.3 Proprietary Estoppel .......................................................................................................................................................................... 183 5.4 Co-ownership ..................................................................................................................................................................................... 186 5.5 Leases and Licences ......................................................................................................................................................................... 193 5.6 Leasehold Covenants ........................................................................................................................................................................ 197 5.7 Mortgages .......................................................................................................................................................................................... 203 5.8 Easements ......................................................................................................................................................................................... 209 5.9 Freehold Covenants........................................................................................................................................................................... 216 6. Equity and Trusts ................................................................................................................................................... 223 6.1 The Three Certainties ........................................................................................................................................................................ 225 6.2 Constitution ........................................................................................................................................................................................ 228 6.3 Formalities ......................................................................................................................................................................................... 231 6.4 Implied Trusts of the Home ............................................................................................................................................................... 233 6.5 Private Purpose Trusts ...................................................................................................................................................................... 237 6.6 Secret Trusts ..................................................................................................................................................................................... 239 6.7 Unincorporated Associations ............................................................................................................................................................. 243 6.8 Fiduciary Duties and Breach of Trust ................................................................................................................................................ 247 6.9 Maintenance and Advancement ........................................................................................................................................................ 253 6.10 Tracing and Liability of Strangers .................................................................................................................................................... 255 6.11 Equitable Remedies ......................................................................................................................................................................... 261 7. Constitutional and Administrative Law ................................................................................................................ 267 7.1 Human Rights: Problem Questions.................................................................................................................................................... 269 7.2 Judicial Review: Preliminary Issues ................................................................................................................................................... 278 7.2.1 Procedural Impropriety .................................................................................................................................................................... 280 7.2.2 Illegality ........................................................................................................................................................................................... 283 7.2.3 Legitimate Expectation.................................................................................................................................................................... 285 7.2.4 Unreasonableness .......................................................................................................................................................................... 287 7.3 Separation of Powers ........................................................................................................................................................................ 289 7.4 Parliamentary Sovereignty ................................................................................................................................................................. 292 7.5 UK Constitution .................................................................................................................................................................................. 295 www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  6. 6. 1.1 AGREEMENT AND INTENTION TO CREATE LEGAL RELATIONS 1. Introduction 1) Potential contracts - Identify all potential contracts e.g. o Albert v John – contract for car o James v John – contract for car - In order for agreement to exist there must be a valid offer and acceptance 2. Determine whether a valid offer has been made 1) Offer - A valid offer must be: o (1) Clear & Certain1 (Storer v Manchester CC cf. Gibson v Manchester CC2) o (2) Communicated to the offeree (Taylor v Laird), either (1) In writing, (2) Orally, or (3) By conduct o (3) Open i.e. not lapsed, revoked or rejected (see below) - Whether an offer has been made is judged objectively: “the alleged offeror will be bound if his words or conduct are such as to induce a reasonable person to believe that he intends to be bound, even though he in fact has no such intention” (Smith v Hughes) - The following potential issues must also be considered (if applicable): o Invitations to Treat o Option Contracts o Counter-offers and Requests for Further Information o Termination 2) Invitations to Treat - An offer must be distinguished from an invitation to treat o Offer: “An expression of willingness to contract on specified terms, made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed” (Treitel) o Invitation to treat: An expression of willingness to enter into negotiations 1) Advertisements - General Rule: Advertisements constitute invitations to treat (Partridge v Crittenden) o Exception 1: The manufacturer’s exception (Grainger v Gough, obiter per Lord Herschell). If the offeror manufactures the goods on offer (i.e. the goods are in large supply), his advertisement may constitute an offer3 o Exception 2: Unilateral offers4 (Carlill v Carbolic Smoke Ball Co5; Lefkowitz v Great Minneapolis Surplus Store) where acceptance may occur through performance of the offer’s prescribed act 2) Display of Goods - General Rule: A display of goods constitutes an invitation to treat6 (Fisher v Bell) o The offer is made by the presentation of the goods at the till7 (Pharmaceutical Society v Boots) o Acceptance occurs when the cashier accepts the offer 1 2 3 4 Phrases such as e.g. “£1,000 or nearest offer”, “a price to be determined” or “a car for sale” are not sufficiently clear and certain Tentative phrases are uncertain e.g. the wording “will” (Storer) was held to be sufficient to meet the clear and certain requirement, whereas “may” (Gibson) was not E.g. brochures and price lists The unilateral offer must be sufficiently certain and show an intention to be bound. Note the distinction between bilateral and unilateral contracts: in a bilateral contract, both parties make promises; in a unilateral contract, only one party makes a promise. There are two aspects to a unilateral offer: (i) an express offer to reward performance of the prescribed act and (ii) an implied offer not to revoke the offer once the offeree commences performance 5 C.f. Lefkowitz v Great Minneapolis Surplus Store: in order to accept the offer, the offeree had to be the first to arrive with $1 6 Even if the shop actually expressly designates that the goods are “on offer” (Fisher v Bell) 7 Not when placed in a shopping basket (for instance). N.b. the exact point when the offer is accepted is unclear. It has been suggested that it occurs when the items are scanned into the till. However, it does not occur when the cash is accepted – payment is merely fulfilment of the contract www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  7. 7. 3) Auctions - General Rule: An auctioneer’s request for bids represents an invitation to treat. An offer is made when the bidder places a bid, which the auctioneer is free to reject or accept. Acceptance occurs at the fall of the auctioneer’s hammer. An offer can be withdrawn at any time before acceptance (Payne v Cave) o Exception 1: Auctions without reserve. Here a unilateral offer is made by the auctioneer when he promises that the auction will be without reserve. The highest bidder accepts this offer when they make their bid (Warlow v Harrison; Barry v Davies) o If the auctioneer subsequently refuses to sell to the highest bidder they will be in breach of the unilateral contract and can be sued for damages for the value of the goods being auctioned (Barry v Davies). Note that the bidder cannot sue for the goods themselves as they are part of a bilateral contract for sale which is independent of the unilateral contract 4) Tenders - General Rule: Tenders represent invitations to treat (Spencer v Harding) o Exception 1: where the offeror makes an express undertaking to accept the most competitive bid8 (Harvela Investments v Royal Trust Co) o Offers submitted according to the requirements of a tender must be considered (Blackpool & Fylde Aero Club v Blackpool BC) 3) Option Contracts - Where the offeror agrees to keep an offer open for a period of time in return for valid consideration from the offeree, a separate (“option”) contract will be created. If the offeror revokes his offer during this period he will breach this option contract9 (Dickinson v Dodd; Routledge v Grant) - An option contract must meet the same requirements as any other contract to be valid i.e. there must be valid agreement, consideration and intention to create legal relations 4) Counter-offers and Requests for Further Information A counter offer should be distinguished from a request for further information: - (1) Counter-offer: o Definition: an attempt to accept an offer on new (different) terms by changing a key term in the offer10 (Hyde v Wrench) o Effect: kills off the original offer and itself becomes capable of acceptance o “Battle of the forms”: where multiple counter-offers exist, the last counter-offer to be accepted will prevail (Butler Machine Tool v Ex Cell O) - (2) Request for Further Information o Definition: an enquiry expressed in interrogatory language relating to ancillary aspects of an offer o Effect: no effect on the original offer, which remains open and capable of acceptance (Stevenson Jacques v Mclean) 5) Termination - An offer may be terminated through: 1) Rejection, 2) Revocation, or 3) Lapse 1) Rejection - Rejection of an offer can occur by the offeree making an: o (1) outright rejection, or o (2) making a counter offer which is unaccepted by the original offeror A request for information will not constitute a rejection of the offer 2) Revocation - Whether an offer is revoked depends on whether it is a bilateral or unilateral offer: o (1) Bilateral Offer Revocation can occur at any time before acceptance (Payne v Cave) Revocation must be communicated11 (Byrne v Van Tienhoven) • Revocation can be communicated through a third party12 (Dickinson v Dodds) but note Treitel’s criticism13 8 9 An undertaking to accept the most competitive bid creates a unilateral contract to enter into a contract with the winning bidder N.b. only the option contract will be breached by early revocation by the offeror, and the offeree will only be able to sue for damages for breach of the option, not for the main contract (as the main contract has not been formed yet) 10 E.g. the price 11 How the revocation is communicated is irrelevant as long as the offeror’s clear intention to revoke the offer has been demonstrated (through words or conduct) and the offeree receives notice of this intention www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  8. 8. o (2) Unilateral Offer General Rule: revocation can be communicated at any time before complete performance (GNR v Witham) • Exception 1: The offeror cannot withdraw the offer once the offeree has begun performance (Errington v Errington & Woods) and cannot prevent the offeree from completing that performance (Daulia v Four Milbank Nominees, per Goff LJ) • Equal notoriety rule: the revocation must be given the same notoriety as the original offer (Shuey v USA) 3) Lapse - Lapse can occur through: o (1) The Passage of Time (Ramsgate Victoria Hotel v Montefiore). The rules vary depending on whether the offer has prescribed a period for acceptance or not: (a) Prescribed period: lapse will occur if acceptance does not take place within the offeror’s prescribed period (b) No prescribed period: lapse will occur if acceptance is not made within a “reasonable time” • What constitutes a “reasonable” time will depend on the circumstances o (2) Death (a) Death of the Offeror (Bradbury v Morgan) • The offer will lapse if the offeree is notified/ aware of the offeror’s death before acceptance (b) Death of the Offeree • After the offeree’s death, the offeree’s representatives cannot accept the offer (Duff’s Executors’ Case; Kennedy v Thomassen) o (3) Non-fulfilment of a condition An offer will lapse where the offeree fails to comply with a condition attached to the offer by the offeror Conditions may be impliedly attached to offers in certain circumstances (Financings v Stimson14) 3. Determine whether a valid acceptance has occurred 1) Acceptance - Acceptance must be: o A mirror image of the16offer15 (Hyde v Wrench) o Made by the offeree (Boulton v Jones) o In response to/ with knowledge of the offer (R v Clarke) Knowledge of the offer does not have to exist initially, only at some point before completion (Gibbons v Proctor) In reward cases, unless stated otherwise, only the person to first give information is entitled to the reward (Lancaster v Walsh) o Acceptance must be communicated (Felthouse v Bindley) Acceptance may be communicated via an authorised third party (Powell v Lee) Acceptance may be by conduct (Taylor v Allon; Intense Investments v Development Ventures) Exception 1: Unilateral offers. Here the communication requirement is waived or implied by performance of the prescribed act (Carlill v Carbolic Smoke Ball Co) Exception 2: The Postal Rule (Adams v Lindsell) (see below) Exception 3: The failure of communication is due to the fault of the offeror17 (Entores v Miles Far East Co; The Brimnes) o The offeree’s motive for acceptance is irrelevant (Williams v Carwardine) o An offeree cannot “snap up” an offer which he knows or ought to have known was made in error (Hartog v Colin & Shields) (CONTINUED IN FULL VERSION) 12 The issue will be whether the third party demonstrates the offeror’s clear intention to revoke the offer. If the third party communicates anything less to the offeree (e.g. that the offeror has made an offer to someone else) this will likely constitute insufficient evidence of the offeror’s intention to revoke the offer 13 Treitel argues that revocation should only be possible by the offeror, not by a third party, because otherwise an unfair burden is placed on the offeree to determine whether the third party communicating the revocation on behalf of the offeror is reliable or not: “Certainty would be promoted if the rule were that withdrawal must be communicated by the offeror, as well as to the offeree.” Other commentators, such as Jill Poole, have argued that the question is whether the “third party ought reasonably to be believed” 14 Financings v Stimson: an implied term was attached to an offer that a car would be kept in the same condition until acceptance 15 i.e. acceptance must be unqualified and correspond precisely with the offer’s terms. If the acceptance is qualified in any way, it will be invalid 16 You cannot accept an offer made to someone else 17 i.e. it is the offeror’s fault that acceptance is not communicated e.g. he fails to check his fax messages or his computer is off www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  9. 9. 5.9 FREEHOLD COVENANTS 1. Introduction Definition: a covenant is a promise contained in a deed (Dano v Earl of Cadogan) 1) Potential claims - (1) Identify the parties and determine their status e.g. o Original covenantor18 (James) – successor in title (Lucy) o Original covenantee (Marcus) – successor in title (Alfred) - (2) State the issues e.g. Alfred - potential breach of covenant by failing to pay for maintenance of the lift - (3) State the formalities for creating a freehold covenant (i.e. in writing, signed by the covenantor (s.53(1)(a) LPA 1925)) and that these are presumed to have been complied with 2. Determine whether the burden of the covenant has passed in equity It should first be determined whether the burden has passed in equity because: - (1) at common law the burden does not pass (Austerberry v Oldham; Rhone v Steven) - (2) equitable remedies are preferable as injunctions are available There are four conditions which must be met for the burden of a covenant to pass in equity (Tulk v Moxhay): 1) The covenant must be negative 2) The covenant must accommodate the dominant tenement 3) The original parties must have intended that the burden should bind successors 4) The person against whom the covenant is being enforced must have notice of the covenant 1) The covenant must be negative in substance - Test: does compliance with the covenant require that money is expended?19 (Haywood v Brunswick) o If yes: it is a positive covenant o If no: it is a negative covenant - Where a covenant contains both positive and negative obligations, one of two approaches may be taken: o (1) Severance of the covenant into its negative and positive obligations (Shepherd Homes v Sandham) In order to sever the covenant, the obligations must be distinct and separable The burden of the negative obligations will pass, but the burden of the positive obligations will not o (2) The covenant will be determined to be either substantially positive or substantially negative with (respectively) a mere negative or positive condition attached (Powell v Hemsley) The burden will pass if it is substantially negative, not if it is substantially positive 2) The covenant must accommodate the dominant tenement There are three requirements for the covenant to accommodate the dominant tenement: 1) The covenantees must have an interest in land (London CC v Allen) - The original covenantee must possess an interest in land on the date when the covenant is granted - The successive covenantee must possess an interest in land at the time when the covenant is enforced 2) The covenant must touch and concern the dominant land (P&A Swift Investments v Combined English Stores, per Lord Oliver) - “Touch and concern” requires that the covenant benefits the land itself by affecting its value, nature, quality or use and not simply benefit a particular owner purely in his personal capacity o Note that a covenant may benefit an individual owner personally, as long as it benefits the land to some extent (Newton Abbot v Williamson & Treadgold20) 3) The servient and dominant land must be sufficiently proximate (Bailey v Stephens) - This requires that the dominant land is close enough to the servient land in order to benefit from the covenant 18 Note the terminology: (1) covenantor: the person who made and bears the burden of the covenant (2) covenantee: the person who enjoys the benefit of the covenant (3) dominant land: the land enjoying the benefit of the covenant (4) servient land: the land which bears the burden of the covenant 19 This is sometimes referred to as the “hand in pocket” test 20 Newton Abbot v Williamsons & Treadgold: here the covenantee was an ironmonger and the covenantor promised not to use his premises as an ironmonger. The covenant was permitted because it benefited the use and value of the land by preventing competition, even though it also benefited the covenantee in his personal capacity www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  10. 10. 3) It must have been the intention of the original parties that the burden should run - An intention that the burden should run may demonstrated: o Expressly, using express words in the covenant, and (if not expressly) o Impliedly, by s.79 LPA 1925 s.79 will apply unless the parties have expressly excluded its application (Morrells v Oxford UFC) 4) Notice A covenant will only bind the person buying the servient land if that person has notice of the covenant. The requirements for notice depend on whether the land is registered or unregistered: - Registered Land o Entering a charge on the Charges Register of the servient land constitutes notice (s.32 LRA 2002) o If no notice is entered, the purchaser will not be bound if he is a purchaser for valuable consideration (s.29(1) LRA 2002) o Any person who acquires the freehold who is not a purchaser for valuable consideration will be bound by the restrictive covenant if it constitutes an overriding interest. The restrictive covenant will be overriding if the person with the restrictive covenant is in actual occupation of the land (Schedule 3 Paragraph 2 LRA 2002) o A donee or volunteer will be bound by a restrictive covenant regardless of whether it is entered on the charges register - Unregistered Land21 o (1) Restrictive covenants granted on or after 1st January 1926 Registration of the restrictive covenant as a Class D(ii) land charge on the land charges register (s.2(5)(ii) LCA 1972) constitutes notice and will bind all purchasers (s.198 LPA 1925) If not registered, the restrictive covenant will bind anyone who is not a purchaser of the legal estate for money or money’s worth (s.4(6) LCA) o (2) Restrictive covenants granted before 1st January 1926 The doctrine of notice applies (see 5.2 REGISTERED AND UNREGISTERED LAND for full details): • (a) actual, constructive or imputed notice of the easement will bind a purchaser, but • (b) a donee will be bound regardless of notice 3. Determine whether the benefit of the covenant has passed in equity In order for a covenant to be enforceable, the benefit as well as the burden must be shown to pass (Miles v Easter; Re Union of London and Smith’s Bank) In order for the benefit to pass in equity the covenant must: 1) Touch and concern the land o The covenant must not be purely personal to or merely benefit a particular owner but must benefit the land itself by affecting its value, nature, quality or use (P&A Swift Investments v Combined English Stores, per Lord Oliver) (see above) 2) Have passed in one of the following three ways (Renals v Cowlishaw, per Sir Charles Hall VC) o (1) Annexation o (2) Assignment o (3) Scheme of development 1) Annexation - The benefit of the covenant must be permanently attached to the dominant land at the point when the covenant is created o Annexation of the benefit to the whole of the dominant land constitutes annexation to every part of the land (Federated Homes v Mill Lodge Properties) o The size of the dominant land is irrelevant (Wrotham Park Estate v Parkside Homes; Marten v Flight Refuelling) - There are three methods of annexation: 1) Express 2) Implied 3) Statutory (CONTINUED IN FULL VERSION) 21 The same principles of enforcement in unregistered land apply to restrictive covenants in a lease www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  11. 11. 6.7 UNINCORPORATED ASSOCIATIONS General Principles Rule against perpetuities (“rule against remoteness of vesting”): future interests (i.e. interests not taking immediate effect) must vest within the perpetuity period - The rule requires that there exists a point in time when the class of beneficiaries becomes closed and fixed (as only at that point can the trust be closed and legal title be transferred from the trustees to the beneficiaries22) Perpetuity periods The perpetuity period varies depending on when the will was executed: - (1) Wills executed on or after April 6 2010 o The perpetuity period is automatically fixed at 125 years (s.5 Perpetuities and Accumulations Act 2009) - (2) Wills executed before April 6 2010 o The perpetuity period is automatically fixed at 80 years (s.1 Perpetuities and Accumulations Act 1964), or o (where no perpetuity period is specified) 21 years after the date of death of the last life in being 1. Introduction Definition: “an association of persons bound together by identifiable rules and having an identifiable membership” (Re Koeppler’s Will Trust, per Slade LJ) Unincorporated associations are problematic because they have no separate legal personality and are therefore unable to own property or contract as an independent entity 1) Potential gifts/ trusts - Determine the potential gifts/ trust to the unincorporated association e.g. Charles – £50,000 to the scouts club 2. Determine whether an interpretation can be applied (if any) The court has devised a number of interpretations to effectively permit gifts to unincorporated associations. The court will attempt to choose the interpretation that best fits the testator/ donor’s intentions for the gift (Re Recher, per Brightman J): 1) Ordinary purpose trust 2) Gift to members absolutely 3) Gift to members subject to contract (the “Contractual Analysis”) 4) Trust for present and future members 5) Re Denley purpose trust 1) Ordinary purpose trust - An ordinary purpose trust is likely to fail for one or more of the following reasons: o (1) Beneficiary principle The beneficiaries of the trust must be ascertainable o (2) Perpetuity The trust may contravene the rule against inalienability o (3) Uncertainty The purpose of the trust may be too uncertain - The trust must also be for the direct benefit of the members, not merely for a non-charitable purpose relating to the trust (Leahy v AG for New South Wales, per Viscount Simonds) otherwise it will be void o The members must ultimately obtain the trust property themselves (Philippe v Cameron) 22 The reason for this is that if the class of beneficiaries never became closed and fixed, the trustees would be required to retain the trust property forever, which would defeat the whole purpose of the trust as the beneficiaries would never receive their beneficial interest www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  12. 12. 2) Outright Gift to present members absolutely (Leahy v AG for New South Wales) - The “outright gift” interpretation interprets the testator’s gift as divided into equal shares among the individual members of the association - The outright gift to present members absolutely only applies in limited circumstances: usually where (Re Grant, per Vinelott LJ): o (1) the testator/ donor has not directed how the gift should be used (Cocks v Manners), and o (2) the group of beneficiaries is small (Re Grant, per Vinelott J) Ideally, the club name should only be functioning as a convenient label for a small number of individuals whom the testator wishes to benefit - The current members of the club each receive equal shares of the gift (each member taking an immediate individual share) - Beneficiary principle o The beneficiary principle is complied with as the current members are all ascertainable - Perpetuity o The perpetuity requirements are complied with as the property vests in the members immediately (i.e. the beneficiaries are free to treat the property as they wish) - Potential issues o Because each of the members receives a share of the gift absolutely, there may be issues with the construction due to the following (Leahy v AG for New South Wales): (1) The gift’s wording • The construction must take affect as a gift. This will contradict any wording which indicated that the testator indicated a trust. In addition, the testator is unable to: o (1) retain any control over the property, or o (2) ensure the property is used according to his intentions (or even for the purposes of the association) (2) The nature of the property • It is unusual for a testator to have intended a gift to an association to be divided into small shares between every beneficiary (3) The nature of the beneficiaries • It will be difficult to use the “outright gift” interpretation where the beneficiaries are: o (a) Numerous, and/ or o (b) Diversely located 3) Gift to members subject to contract (The “contractual anaylsis”) (Re Recher) - The “contractual analysis” interprets the gift as a gift to the members of the club subject to their duties and obligations to the club - The contractual analysis is the most common interpretation (Artistic Upholstery v Art Forma; Hanchett-Stamford v HM Attorney General) - The interpretation can only apply where: o (a) the testator intends a gift (Leahy v AG for New South Wales), and/or o (b) the association possesses identifiable rules, and o (c) the association still exists (Re Recher) - It is irrelevant who the club benefits (i.e. its members or someone else) (Re Recher) - Beneficiary principle o The beneficiary principle is satisfied as all members are identifiable at any particular given point in time The fact that the composition of the members may change over time is irrelevant - Perpetuity o The perpetuity rules are satisfied as long as the members are free to deal with the property (i.e. they must be able to divide up the property themselves at any time) - Control o The association’s rules must permit its members to have a sufficient degree of control over the assets (“internal control”) to the extent that they are free to deal with the property, including both its capital and income, as they wish. This includes the right of the members, as a group, to decide to use the gift for a purpose other than that intended by the testator o There may be some element of external control over the association (Re Horley Town) but it must be minimal and not in any way restrict the members’ internal control (Re Grant) - Where a testator states a specified purpose or limitation for the gift that will not necessarily invalidate the members’ control over it as it may instead be viewed as a motive (Re Lipinski23) (CONTINUED IN FULL VERSION) 23 Note however the controversial nature of Re Lipinksi www.gdlelite.com Copyright © GDL Elite 2013-2014 GDL Elite
  13. 13. GDL Elite www.gdlelite.com Copyright © GDL Elite 2013-2014 www.gdlelite.com GDL Elite

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