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Question 1

A constructive trust may arise in many different situations. Which of the following would not be a constructive trust?

a) The conscience of the recipient is bound in such a way as to justify equity in imposing a trust on him

b) A person holds property in circumstances which in equity and good conscience should be held or enjoyed by another

c) A remedial institution which equity imposes regardless of actual or presumed intention

d) Two parties have contributed financially to the purchase of land and hold that land in proportion to those contributions

Question 2

Fiduciaries have very strict duties. Which of the following are they actually allowed to do?

a) Purchase the trust property

b) Make a profit for themselves

c) Purchase trust property with the consent of the beneficiaries

d) Use knowledge acquired from their fiduciary position

Question 3

What great practical advantage did the decision in Attorney General for Hong Kong v Reid 1994 1 AC 324 have for the government of Hong Kong?

a) Bribery was condemned as evil

b) Property bought with the bribes belonged to them

c) The bribes were held on constructive trust

d) Reid was personally liable as a fiduciary

Question 4

Which of the following persons is not a fiduciary?

a) A foreman in a factory

b) An army sergeant

c) The Director of Public Prosecutions

d) The solicitor to the trustees

Question 5

What is a trustee de son tort?

a) A person who acts as the agent of the trustees

b) A person who acts as a trustee, although they were not appointed as a trustee

c) A person who receives trust property

d) A person who knowingly assists in a fraudulent and dishonest design by the trustees

Question 6

According to Twinsectra v Yardley [2002] 2 AC 164, what is the test for dishonesty in a dishonest assistance constructive trust?

a) The defendant believed that they were acting dishonestly

b) The defendant acted dishonestly by the ordinary standards of reasonable and honest people

c) The defendant acted dishonestly by the ordinary standards of reasonable and honest people and believed that they were acting dishonestly

d) The trustee was dishonest

Question 7

What makes the defendant liable for knowing receipt of trust property?

a) The defendant knew enough to make it unconscionable for them to retain the property

b) The trustee knew that there was a breach of trust

c) The defendant should have known that they were receiving trust property

d) The defendant was dishonest

Question 8

When does an institutional constructive trust come into existence?

a) From the date of the court order

b) From the date of the conduct or circumstances that give rise to the constructive trust

c) From the date that the claimant realises that they have a claim against the defendant

d) From the date when a third party is affected

Question 9

When does a remedial constructive trust come into existence?

a) From the date of the court order

b) From the date of the conduct or circumstances that give rise to the constructive trust

c) From the date that the claimant realises that they have a claim against the defendant

d) From the date when a third party is affected

Question 10

Why have the English courts declined to allow remedial constructive trusts?

a) Because they are based on justice and good conscience

b) Because they prevent unjust enrichment

c) Because the courts have no power to vary property rights

d) Because they are part of the law of the USA

Oxford University Press, Online Resource Centre, Chapter 14.

Chapter 14

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