Equity
On 4 April 2014, Richard Mann, a wealthy media magnate, was advised by his accountant, Archie
Pythagoras, to divest himself of some of his property to minimise the property taxes which the State
government had been proposing to introduce.
Rich went home and drew up a list of purported dispositions. These were as follows:
- To my trusted solicitor, Barry (Bazza) Murphy, to hold on trust for my two daughters, Hope and Faith, I
give all my right, title and interest in my property at Vaucluse. The property is to be rented and the rental
income to be divided equally between the two girls. - To my accountant, Archibald Pythagoras, I give all my right, title and interest in my 100,000 shares in
my corporation Wolf Media, to hold on trust for my dear wife Betty. - To my accountant, Archibald Pythagoras, I also give all my right, title and interest in my collection of
rare Calathumpian marbles, to hold on trust for my youngest daughter Charity, until she attains the age of
21.
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Equity Trust
It is very important for people to have a will to express how they would like their wealth
to be distributed. These wills makes it easier when applying for the probate on the will to
distribute the property to beneficiaries 1 . The paper delineates on the expert advice Bazza and
Archie who are the executor of Rich in the case, where the problem is to establish the validity of
the three purported inter vivos dispositions made by Rich on 4 April 2013 and the three
testamentary dispositions.
I it is very important that Bazza and Archie follow the laws to handle this problem
amicably for them to get clearance by the court to transfer the property to the beneficiaries. One
of the requirements is that there should have been a declaration by Rich through his expression
of his intention to hold property of the said people on trust for another 2 . Therefore, law requires
that Rich to have declared his intention that his property are held on trust.
1 Paul Evans, Equity and Trusts, 3rd edition, Lexis Nexis, 2012, pp. 417-433 [25.1-25.26]; 440-442 [25.43-25.49]
2 Evans, Paul, Australia wills and estates law. (2014). Retrieved from:
http://www.australianwillsandestatelaw.com.au/
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The second requirement is that a transfer should have created the trust. This means that
the title transferrable to the person should have instructions that it is held on trust for another
person. This therefore, means that the transfer can happen via either an inter vivos transaction or
post mortem (by will) 3 . The third requirement is that it can occur through or by direction. In this
case, the beneficiary of an existing trust is the one who directs the trustee to hold his or her
interest on rust for another.
Furthermore, there are three certainties requiring consideration for the will to be valid.
These include the intention. There must be intention of transferring the property. The second
factor is subject matter 4 . A product or property is involved requiring transfer. The third is that
there must be a beneficiary of objects 5 .These are the people that are going to benefit or those that
the property is transferred to them. The creator who is Rich should have intended to create the
trust 6 .The creator does not necessarily have to be fully aware of the law of trusts to be found to
have intention to create the trust. Creation of intention can also be inferred from the conduct of
the person.
In case of a fixed trust, the law requires that beneficiaries be identified to allow the court
to come up with the complete list of the beneficiaries at the point that the beneficial interests
3 Ibid
4 Edgeworth et al., Sackville and Neave’s Property Law Cases and Materials, 8th edition, Lexis
Nexis, 2008.
5 Government of Western Australia. Wills and estate administration. (2014). Retrieved from:
http://www.dotag.wa.gov.au/W/wills_and_estate_planning.aspx
6 University of Technology Sydney. Equity and trusts. Retrieved from:
http://handbook.uts.edu.au/subjects/details/70517.html
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come into effect. This was illustrated in the case of Re Gulbenkian’s Settlements [1970] AC 508;
Lempens v Reid [2009] SASC 179 and the case of Prosper v Wojtowicz [2005] QSC 177
This case, therefore more so lies on the question of intention and this is what is required
to be proved to ensure that these trust is valid or not. The burden of proof is on question of
intention. Because, it was through the advice of Archier and Bazza for Rich to create the trust,
they have the duty of actually proofing that indeed it happened. One of the proof that Rich had
the intention of his trust is through the email he send to these two directing them to take over the
process by instructing the various institutions such as the company to change the ownership
stakes. This itself will actually be used in the court to ascertain that indeed there was intention
and therefore, the wish of the diseased Rich should be adhered. Inter vivos are required and this
requires that oral or written evidence is presented as evidence. Therefore, these two executors
will present the written evidence by showing the email sent to them.
In conclusion, it is very important to ensure that law is followed in such cases. Various
countries have different laws pertaining to equity trust and it is important to understand the laws.
In this case, validity of the various disposing can be proved through the email. The intention of
Rich to transfer his property is provable and therefore even after his death, can be proven and the
process can move on smoothly.
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Bibliography
Evans, Paul, Equity and Trusts, 3rd edition, Lexis Nexis, 2012, pp. 417-433 [25.1-25.26]; 440-
442 [25.43-25.49]
Edgeworth et al., Sackville and Neave’s Property Law Cases and Materials, 8th edition, Lexis
Nexis, 2008.
Evans, Paul, Australia wills and estates law. (2014). Retrieved from:
http://www.australianwillsandestatelaw.com.au/
Government of Western Australia. Wills and estate administration. (2014). Retrieved from:
http://www.dotag.wa.gov.au/W/wills_and_estate_planning.aspx
Lempens v Reid [2009] SASC 179
Prosper v Wojtowicz [2005] QSC 17
Re Gulbenkian’s Settlements [1970] AC 508
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University of Technology Sydney. Equity and trusts. (2014).
