LAWS2205_6205 Deferred Examination Paper
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Australian National University *
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6205
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Law
Date
Jan 9, 2024
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4
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AUSTRALIAN NATIONAL UNIVERSITY ANU COLLEGE OF LAW Semester 2 - Deferred End of Semester Exam, 2022 LAWS2205/6205 Equity and Trust
Exam Date: Monday, 20 February 2023 Writing period: 120 minutes duration Exam Mode: Online Exam - WATTLE IMPORTANT WARNING:
Students are reminded that answers to this exam must be based on their own work. Any collusion or communication with other students or persons about the contents of this exam during the period of the exam would constitute academic misconduct.
Downloading, and/or using notes, summaries, or example answers from any website other than the course Wattle site in order to write your answers may also constitute academic misconduct.
There is no ‘grace period’ for any s
ubmission issues for this exam. Any late submissions will not be accepted.
Final Exam
The Australian National University 2 of 4 LAWS2205 Equity and Trusts 2022 Part B –
35% Student Instructions for Part B: Open a document and type your answers in that document. Upload your document to Turnitin dropbox before the submission time. There is no word limit. However, we have provided a rough guide below as to how many words each answer should be in order to address the question fully, and a suggested time allocation. Please do not just copy and paste large amounts of text from your notes into your responses. You will lose marks for answers that include irrelevant or incorrect material, or are unnecessarily long. Part B includes 3 questions. Answer all questions. Question One [10 marks] Word length guide = 400 - 600 words, Suggested time allocation = 20 minutes Question Two [5 marks] Word length guide = 200 - 300 words Suggested time allocation = 10 minutes Question Three [20 marks] Word length guide = 800 - 1,000 words Suggested time allocation = 60 mins The questions follow on pages 3 and 4.
The Australian National University 3 of 4 Question One: Bobby, who lived in Canberra his whole life, died recently. His will contains the following provision: I leave my entire wine collection on trust to be sold and half the proceeds to be used to encourage the playing of chess in ACT private schools and half to go to my sister, Jenny, hoping that she will distribute the proceeds at her discretion amongst my relatives. Advise Bobby’s executor whether the provision is valid [10 marks] Question Two: In the context of a claim for equitable compensation for a breach of fiduciary duty that does not involve trust property in Australia, a causation test is applied. Explain the causation test with reference to cases covered in this course, and explain how this approach has been justified as consistent with general principles of Equity. [5 marks] Question Three: Margery, who has lived her whole life in Canberra, died five years ago. By her will, she created the following valid trust: Clause 10 I leave the residue of my estate to my son, Robbie, on trust, to distribute the annual income at his discretion to such of my grandsons (Cliff, Dave, Angus and Malcolm) to engage in musical activities. The trust fund is to be distributed equally amongst them ten years after my death. Margery had two children, Robbie and Chuck. Robbie has one son (Cliff), Chuck has three sons (Dave, Angus and Malcolm). The grandsons are all aged in their twenties. In each year of the trust’s operation so far, Robbie distributed t
he annual trust income to his son Cliff on the basis that Cliff was learning classical guitar. Dave, Angus and Malcolm, who play in a heavy metal group and regularly
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The Australian National University 4 of 4 perform at Canberra venues, have complained to Robbie that no distributions have been made to them. Robbie’s response was that he hated heavy metal music. Recently, Robbie withdrew $15,000 from the trust’s bank account and deposited it in his personal bank account, which had a balance of $5,000 at the time of the deposit (bringing the balance to $20,000). He did this because he was keen to pursue an investment opportunity, but did not have sufficient funds to do so. And, he reasoned, $15,000 was a fair payment for all the unpaid work he had done as trustee to date. The next day, he withdrew $10,000 from his account and purchased shares in Goldmine Pty Ltd. He then withdrew $10,000 to pay some of his bills. The Goldmine shares tripled in value overnight due to a mining discovery. Robbie promptly sold them for $30,000 and paid the proceeds back into his bank account, which was now overdrawn by $5,000 due to some automatic mortgage payments having come out of the account in the meantime. Dave, Angus and Malcolm learn all of the above facts and come to you for advice on their rights and remedies in equity in relation to Robbie’
s administration of the trust. Advise Dave, Angus and Malcolm with respect to: (a) Robbie’
s refusal to distribute trust income to them: can they challenge his decision in court, and are other options open to them? [10 marks] (b) any remedies available in relation to Robbie’
s recent withdrawal of $15,000 of trust money (assume that no transactions, other than those detailed above, have occurred in relation to Robbie’ bank account). [10 marks] END OF EXAMINATION