Session 6_DN

Emma, a tech entrepreneur, was embroiled in a bitter patent dispute with a competitor. In a rash decision to eliminate competition, she created the "Tech Dominance Trust" to fund corporate espionage activities. The trust was overseen by her son, David, with specific instructions to gather competitive intelligence through unethical means. Shortly after the trust was funded with $200,000, Emma reconsidered her actions, feeling overwhelmed by guilt and the potential consequences. Before any espionage was undertaken, Emma contacted David, requesting the return of the funds. David refuses, claiming the funds were a gift from his mother and not held in trust. Which legal principle would be best suited to Emma's demand for the $200,000?

• Doctrine of locus poenitentiae

• Reliance principle

Answer explanation

Emma can rely on the Doctrine of Locus Poenitentiae. Emma has expressed genuine repentance and terminated the illegal purpose of the trust before any action was taken. She can’t use the reliance principle bcoz if she tries to argue that the transfer to David was not a gift then she can only justify it by claiming that it was for an illegal purpose. There is no other legal purpose she can use to justify the claim that the transfer to David was not a gift.

Based on the facts of Nelson v Nelson (1995) 132 ALR 133 could Mrs. Nelson have invoked the doctrine of locus poenitentiae to justify her claim that her children held the proceeds for the Bent St pty on resulting trust for her as the purchaser?

• Yes

• No

Based on the facts of Nelson v Nelson (1995) 132 ALR 133, could Mrs. Nelson successfully rely on the reliance principle established in Tinsley v Milligan [1993] 3 ALL ER 65 to rebut Elizabeth’s claim that she gave the Bent St pty as a gift [presumption of advancement] )? (Reliance principle - substantiate claim without relying on illegality)

• Yes

• No

To meet the asset threshold for the full Age Pension, Betty transferred the legal title of her $3 million home to her son, Marcus. Although the transfer appeared complete, Betty intended to retain a beneficial interest and for the property to later pass to her grandchildren through her will. Contrary to this, Marcus sold the home and kept the proceeds. Betty has filed legal proceedings, claiming a beneficial ownership under a resulting trust and asserting the transfer was not a gift. Marcus contends the property was an outright gift, allowing him unrestricted control. The case hinges on whether Betty’s claim would succeed based on Nelson v Nelson, assessing if a party would have to rely on the illegality, and if such a plea would undermine the law’s purpose. Note: Under the Criminal Code Act 1995 (Cth), s 134.2 (1) (a) (b), obtaining a financial advantage from a Commonwealth entity through deception or dishonesty can lead to a 10-year imprisonment penalty.

• Betty would have to admit her illegality to argue the transfer wasn’t a gift, but this likely didn’t undermine the policy’s purpose

• Betty would have to admit her illegality to argue the transfer wasn’t a gift, and the illegality likely undermined the policy’s purpose

• Betty can justify that the transfer was not a gift without admitting the illegality

Answer explanation

Silverwood v Silverwood (1997) 74 P & CR 453, 457

Tom, who is currently living, has drafted a will containing the following provision: "I bequeath my property to Harold, to hold in trust for Mary for the duration of her life, with the remainder interest to vest in my eldest great-grandchild.” At what point will Mary’s interest vest?

• Immediately the will is created

• Upon Tom's death

• When Mary demands the property

Tom, who is currently living, has drafted a will containing the following provision: "I bequeath my property to Harold, to hold in trust for Mary for the duration of her life, with the remainder interest to vest in my eldest great-grandchild.” At what point will the eldest great-grandchild’s interest vest?

• Upon Mary's death provided the eldest great-grandchild is identifiable at that time

• Upon Tom's death provided the the eldest great-grandchild is identifiable at that time

• Upon Mary's death

• Whenever the eldest great-grandchild is born, even if it is years after Mary's death

Jacob's last will and testament states: "The trust established herein shall persist until the death of my last surviving grandchild who is alive at the time of my passing. Upon the death of the aforementioned last surviving grandchild, the remaining assets in the trust shall be distributed to my descendants then living.” Who is/are the life in being in this trust?

• Jacob's descendants living after the time of his passing

• Jacob's descendants living at the time of his passing

• Jacob's last surviving grandchild who is alive after his passing

• Jacob's last surviving grandchild who is alive at the time of his passing

Janet’s will provides: “I leave my house to my daughter Mary and thereafter to her eldest child upon attaining the age of 30yrs.” At the time of the Janet’s death Mary had not yet had a child. Who is the ‘life in being’ in this trust?

• Janet

• Mary

• Mary's eldest grandchild

Janet’s will states: “I leave my house to my daughter Mary for her lifetime, and thereafter to any of Mary’s offspring who reach the age of 30 years.” At the time of Janet’s death, Mary had not yet had any children. As the appointed executor of Janet’s estate, you must determine whether the trust will be considered valid under the Common Law perpetuity period.

• It will be valid from the outset

• It will be void from the outset

A testator’s will states: “I leave my house to my daughter Mary, and thereafter to her eldest child upon attaining the age of 30 years.” At the time of the testator’s death, Mary was 25 years old and had not yet had a child. Using the statutory provisions on the rules against perpetuities outlined in the Property Law Act 1969 (WA), determine how the courts are likely to interpret the trust.

• The trust will be void from the outset as it is impossible for the future interest in Mary's unborn child to vest

• The trust will be void from the outset owing to the uncertainty as to whether Mary will ever bear a child

• The trust will remain in effect until Mary's death, at which point it will be determined whether she had a child who could attain the age of 30 within 21 years following her death