27-5-24

Meaning of trust
- Mr Nyako, C22 at 10-12, class code: v4njom3
- IB – A trust is when a person called a trustee holds the legal or equitable
title to the property of a settlor/ testator on behalf of another person
called the beneficiary
- A trust is a tripartite relationship
- A testator is a person who disposes of his property through the use of a
will
- A will contains instructions for what is to be done with a person’s property
upon their death – Persons who are to carry out the instructions of the
testator upon their death must be stated (such persons are called
executors); they are the trustees who are to dispose of their property for
the benefit of the beneficiaries of the will
- One of the mechanisms of creating a trust is when a testator disposes of
their property by means of a will
- It’s not only by will that you can create a trust
- A settlor is the name of a person who creates a trust in his lifetime/ who
creates a trust that is to take effect while he is still alive
- When does a trust operate/ take effect? – I think for a testator, it takes
effect upon his death; and for a settlor, it takes effect at a certain time
that he sets
- A testamentary trust is created by will, it is a trust that takes effect upon
the death of the creator of the trust (testator)
- A trust inter vivos is a trust that takes effect/ operates while the creator of
the trust (settlor) is still alive
- Remember the history of equity:
- > Common law was harsh, which led to the creation of equity
- > One of the ways in which it was harsh was that common law did not
recognize the rights of beneficiaries under a trust (because it only
recognized legal titles/ only recognized the legal title that the trustee
acquired from the settlor/ testator by virtue of the trust), so equity created
equitable titles for the beneficiaries to hold
- > So, once a trust is created, the trustees are the legal owners of the trust
property, but the beneficiaries are the equitable owners of that trust
property, and they have rights with regards to the trust property, such as
the right to sue the trustee if he is mishandling the trust property (the
beneficiary could obtain remedies such as an order to account)
- So, the trust we’re talking about this semester is the trust created by
common law and modified by equity
- Extra/ earlier history:
- > They was fighting lots of wars and stuff in Europe, and soldiers going to
war did not know if they would come back alive, so they transferred the
title to their property (the property was usually land, so this was done by
conveyance) to people who were not going to war. These people were to
hold the property on behalf of the soldier’s children (who would probably
be too young to hold such property). The trustees however often
mismanaged (e.g., sold it, kept it for themselves, etc) the property, and
common law did not provide any remedy for the beneficiaries (or even for
 a settlor that wanted their property back), because the common law only
recognized legal titles
- > The reason the soldiers had to do the above was because the law then
was against transfer of land by will and was against transfer of land to
corporate entities. So, the soldiers took the risk of transferring title to their
land to other people to hold for their beneficiaries
- > Trust back then was not called trust, it was called the concept of uses –
The settlor then was called the feoffor, the trustee then was called the
feoffee, the beneficiary then was called the cestui use/ cestui que trust
- > The concept of uses is the origin (at common law) of the creation of
trust
- > The Statute of Wills 1540 was created which allowed the creation of
trust through a will (testamentary trust)

-
- There is no single universally accepted definition of trust because different
scholars/ textbooks define it differently
- This is the definition we’ll adopt in this class because it provides a good
description – Professor Keeton – A trust is the relationship which arises
when a person, called the trustee is compelled in equity to hold property
(whether real or personal, and whether by legal or equitable title) for the
benefit of some persons (of whom he may be one) or for some object
which may be permitted by law, in such a way that the real benefit of the
property accrues not to the trustee, but to the beneficiaries or other
objects of the trust
- > The property may be real (immoveable) or personal (moveable)
property
- > The settlor can be the trustee or beneficiary
- > There must be three parties – The creator of the trust, the trustee, and
the beneficiary
-
Classification/ types/ categories of trust
**********************
- Note that the classifications overlap, they depend on the angle from which
you’re viewing/ talking about trusts
For classification based on the manner in which the trust is created,
there are two types – Express trusts and implied trusts (he also added
statutory trusts under this)
- Express trusts
- Trusts created expressly
- The majority of trusts fall into express trusts (rather than implied trusts)
- Express trusts are further classified into private trusts and public trusts
- Private trusts
- There are different categories of private trusts – Inter vivos trusts,
testamentary trusts, fixed trusts, discretionary trusts
- Inter vivos trusts
- Trusts that take effect during the lifetime of the creator of the trust
(settlor)
- Testamentary trusts
- Trusts to operate upon the death of the creator of the trust (testator)
- Fixed trusts
- In such a trust, the identity of the beneficiaries are clearly defined, and
their entitlements/ interests are clearly defined or stated – E.g., the
beneficiary is named as Angel Effedua, and the trust states that she is to
receive ten million naira
- Discretionary trusts
- This is the opposite of the fixed trust – The identity of the beneficiary and
what they’re entitled to could be at the discretion of the trustee
- This kind of trust involves two variables which can operate together or
each by itself – the identity of the beneficiaries, and the interests of the
beneficiary
- > The trustee could have discretion over the identity, or over the interests,
or over both
- Are these two below supposed to fall under here (bare and protective)? –
They are under express trusts sha
- Bare trusts
- Similar to the fixed trusts, but it does not confer any form of discretion
unto the trustee, it is just for the trustee to hold the property the way it is
for the benefit of the beneficiaries
- Example is stock brokers, when they purchase shares and hold it for the
shareholders, they are not to do much with it, just hold it
- Protective trusts
- This is done when a beneficiary would be the type of person to mismanage
trust property, so a protective trust is created – The person will be getting
certain benefits during their lifetime, but on the occurrence of a certain
event (e.g., an attempt to sell, bankruptcy, etc) the trust will be
terminated
- Public trusts
- There are two under here – Charitable trusts, and statutory trusts
- Make notes on these two, maybe I didn’t hear him when he was talking
about them (charitable and statutory) – are these the only two under
public trusts?
- Can be created by individuals, musn’t necessarily be created by
government
- Charitable trusts
-
- Statutory trusts
-
- Implied trusts
- When the trust is not express (i.e., it hasn’t been said or written), it is
implied
- There are two categories of implied trusts – Resulting trusts and
constructive trusts
 - Resulting trusts
- Remember the maxim that says nature/ equity abhors a vacuum
- Sometimes a trust (an express trust) is created that is valid, but for one
reason or the other, it cannot be implemented
- > An example is where the beneficiary of such a trust dies before he can
benefit from the trust. In this scenario, there are two options – the trustee
would convert the property to himself ***
- > Equity abhors a vacuum, so instead of leaving the trustee to benefit
from the trust because the beneficiary has died, equity creates a resulting
trust
- > A resulting trust is a trust that creates a solution to a problem that
makes a trust unenforceable
- > A new kind of trust is created called a resulting trust where new
beneficiaries will emerge
- > An example is that intestate menene***
- > There are other examples
- > Under charitable trusts, someone could create a trust for a particular
purpose, and that purpose cannot be fulfilled, so the trust might be used
for another purpose similar to what the trust was to be used for
- Constructive trusts
- This is created by interpreting the intention of the settlor/ testator***
- In other words, equity is trying to say that in this situation, there should
be/ there is an intention to create a trust; therefore, a trust is created
- The intention is interpreted from the circumstances of the case
- Reid v Attorney Gen of Hong Kong 1994 – A public official was found to
have collected bribes. The bribes were in his possession when he was
caught. The question was, what is the status of that money found in his
hands? The court held that a constructive trust was created whereby the
official was a trustee, and the state was the beneficiary, hence, the money
would be passed unto the state
- According to him, there is also a third type of trust which stands
on its own
- Trusts created by statute
- This can fall under express or implied, public or private, etc
For classification based on interests in the trusts – Vested interests, ***
- Vested interests
- Means that the beneficiary has a present interest in the property (instead
of a future interest)
- There is something called present rights in a present interest, and present
rights in a future interest
- Example – A will says that to my two daughters (A and B) I give ten million
naira each, and my property in Maitama. It means that immediately, the
present rights is conferred on them on the present interest, meaning that
they would have immediate access to the money and property that has
been willed to them in the trust
- Example – A will says that to my two daughters (A and B), ten million
naira, and properties in Maitama to have for their life time, and then after
that the property in Maitama will go to my third daughter (C) – For the
cash, A and B have a present right to a present interest. For the property
 in Maitama, A and B also have a present right to a present interest.
However, for the third daughter, she has a present right to a future
interest in the property in Maitama
- You have to read the language of a trust and interpret the words used by
the settlor/ testator – It is the interpretation of this that would determine if
there is a present right to a present interest, or a present right to a future
interest
- Contingent interests
- Your entitlement is based upon certain conditions, if the conditions are
fulfilled, you get the interest, if not, it is in abeyance (what that mean)
- Example – To my daughter (A) the sum of 20 million upon reaching the age
of twenty one – The entitlement is based on A reaching that age, if she
never reaches that age, then too bad
- Example – To my two daughters (A and B) my properties in Maitama, then
to my third daughter (C) when she reaches the age of twenty one – A and
B have a present right to a present interest (vested interest), while C has a
contingent interest***
-
-
-

28-5-24
- Mr Ibrahim Bello, Moot Court, 3-5
- Things to know before helping a client create a trust:
- > Ask the client, what type(s) of trust do you want to create?
- > What is the capacity of the client, do they have proper title, are they of
age, etc
- We’ll look at:
- > How to draft a will
- > The maxim, equity will not aid a volunteer, and its exceptions such as
laches and acquiescence
- Q – A has 100 million, and approaches you as a lawyer that he wants it to
be used for the benefit of all the students in Baze University, what will you
tell him?:
- > Three Cs – Certainty of intention, subject matter, object
- > When drafting your trust, you have to be clear about your intention,
clear about the subject/ the property to be used in the trust, and clear
about the object/ the beneficiaries
- > Defined beneficiaries are beneficiaries that are mentioned expressly/
clearly, make sure your beneficiaries are defined (and not undefined/
unclear)
- > In all you’re doing as a lawyer, make sure you ensure that the three Cs
are present
 - > From the first time of meeting with the client, ask them who they intend
to be the beneficiaries, what specific property they want to be held in
trust, etc
- > You will need to find out the type of trust that will fit the client’s needs
the best
- > Sometimes it is advisable to record your clients so that you can
remember the whole conversation
- > Don’t advice at the first meeting, no matter how sure you are
- > Make sure you collect your money/ bill your clients properly
- > Even during interviewing, you can make a contract with your client, so
that they can’t escape your billing and run away without paying for your
services
- > Most times, you can’t be a witness to a trust and still be a beneficiary,
advise the client about things like this
- > If the trust is unworkable the court might invalidate it, for example, if
the settlor wants to give property to all lawyers in Abuja
- Read the three Cs before next class (plus their cases if you want)
-

3-6-24
- The two challenges faced at the beginning of before the creation of trusts
- > You could not make a will for the transfer of your property to your heirs
- > You could not transfer your property to a corporation
- This was a problem because at the time, there were wars being fought,
and people going off to war did not know if they would come back alive or
not
- Etc etc – See first class
- The sources of the law of trusts were*
- 1. Common law
- 2. Equity
- 3. Statute
- Benefits/ purpose of trusts
- 1. For asset management and planning for the benefit of the settlor
- 2. When you are old and don’t have the energy or good health to manage
your property or create income, you can create a trust in which you
receive a pension or retirement income
- Don’t forget that the settlor who creates a trust can also be a trustee or a
beneficiary
- 3. Trust can also be deployed by couples to support each other
- You can create a trust or will to secure the future of your spouse – A trust
may be more preferrable, because sometimes a will may not be
implemented the way you want it to be
- 4. Trusts can be deployed as a means of transferring property to your heirs
or loved one, it can be a method of inheritance
 - 5. You can create a trust for the benefit of your society/ community/ to
support a particular cause
- This is where public or charitable*** trusts come in
- Example – Trust inter vivos – 6. You can have money in your bank account
as savings for something, but there would be temptation to use the
money; so instead, you create a trust
- Someone’s question – How does a trustee make money? – He won’t
answer this on now, it is part of its own topic, but a hint is that as a
general rule, trustees perform their work gratuitously (without deriving
financial benefit) but there are exceptions
- Next lecture – Requirements for the creation of a trust, read in advance
- Sort out these shites /\
-

5-6-24
The three C’s/ three certainties
- ***********
- He said he’ll give us his notes after class
- Certainty of intention
- Certainty of subject matter
- If you have 20 children, and you expressly mention 5 of them but don’t
expressly mention 15 of them
- > The 5 will benefit
- > Then the remaining property will be shared equally among the
remaining 15 children (equality is equity)
Certainty of objects
- Intention has to do with the intention of the settlor
- Subject matter – Elaborate about the property in the trust, and about the
interests of each of the beneficiaries
- > There are two exceptions – Where you give discretion to the trustee to *,
and ***
- The objects are the beneficiaries, you have to define each beneficiaries
and what they are getting, if not, they cannot benefit from the trust.
However, if something causes the trust to fail, the property will revert back
to the settlor/ testator’s estate, and will be shared equally among their
children
- Effect of uncertainty of any of the three Cs
- If you fail to be certain, then there is no trust
- Must be in writing
- When the client comes to you for a client interview, you elicit all the
necessary information from them that is required in the trust under law
- If what you’re creating trust around is in relation to landed property, it
must be in writing
- Uncertainty of intention or subject matter
- ***
 - Uncertainty of only object/ beneficiaries
- The property will revert back to the estate of the settlor, then it will be
shared equally among the children
- Other
- Section 9 Wills Act – All three certainties must be there, etc***
- Secret trusts? – Where only the trustee (and maybe the custodian of the
beneficiary) knows who the beneficiary of your trust is and what they’re
getting
Who has capacity to create trust
- In court, there is presumption of capacity to create trust, so the one
challenging the trust because of lack of capacity must prove that there is
lack of capacity
- 1. Anyone below 18 years of age can’t create a trust
- 2. A person declared bankrupt by a competent court can’t create a trust
- 3. An insane person can’t create a trust
- > But in this situation, you need to ask if the trust was created when the
person was lucid/ sane or not
- > If the person creates the trust when they are of unsound mind, that trust
is invalid
- > If someone is challenging a trust (talking about unsound mind) you are
supposed to defend as a lawyer, you have to argue that the trust was
created when the person was of sound mind
- 4. A person declared by a court to be unfit to create a trust also can’t
create a trust
-

10-6-24
- Assignment
- Compare and contrast two forms of secret trust and discuss the
compatibility of secret trusts with the Wills Act
- Type and submit to the Google Classroom
- Minimum of three pages, maximum of four, font Times New Roman, font
size 12
- Due before this Sunday night
- Ten marks
- Don’t go and copy (from a textbook or other), research and then answer in
your own words
Testamentary trusts
- This operates upon the death of the testator (unlike inter vivos trust which
operates during the lifetime of the settlor)
- Q – Possible exam question, also see the classification of trusts
- Part of what we’re talking about today will be what is needed in the
assignment
- A is the owner of property. As the owner, A can deal with the property as
they wish, one of the rights of the owner of property is to dispose of the
property. Disposing property is not the same thing as selling it, it just
means getting rid of it. There are several ways to dispose of your property
- 1. Gift
- You have to execute a deed of gift for it to be valid
- As we learnt in contract law, every contract must have consideration. If
you’re giving a gift, the person is providing no consideration, but you can
escape this principle if you give the gift through deed (of gift)
- 2. Selling it
- Has to be done through deed of conveyance
- 3. Creating a trust
- You choose whether you want to give the property through inter vivos
trust or through testamentary trusts
- Disposition of property by way of a will (testamentary trust)
- A will cannot be valid/ cannot operate until the death of the maker of the
will
- You can change your will until you die
- Requirements for a testamentary trust
- There are two main requirements
- 1. Compliance with the legal requirements applicable to the particular
property you’re going to dispose
- Remember we are talking about disposition of property, property can be
real or personal, tangible or intangible, etc
- If it’s moveable property, check the requirements for the disposition of
moveable properties, if it’s landed property, check the requirements for
that
- Requirements can vary, can be requirements such as doing it in writing,
having certain formalities, etc
- 2. Compliance with the provisions of the Wills Act
- Remember we’re talking about testamentary trusts, trusts created by
wills. There’s a statute governing wills called the Wills Act of 1837
- This number 2 is subject to number 1, so you have to fulfil requirement 1
then fulfil this requirement 2
- What are the provisions of the Wills Act that you need to comply with?
There are many, but the one we are concerned with here is section 9 of
the Wills Act
- Download the Act and read section 9
- Section 9 deals with the requirements for a will to be valid:
- a. Must be in writing
- For your will to be valid, it must be in writing
- b. It must be signed by the testator in the presence of two witnesses (who
are present at the same time). Each witness must sign or attest to their
signature in the presence of the testator
- c. There must be clear intentions of the testator to dispose of the property
by will
- Read section 9 for details, for example what happens when the testator is
unable to sign
 - Any will that does not comply with these requirements is null and void
- If you made a will last year, and between last year and this year you’ve
acquired new properties, and you wish to modify your will, those new
modifications must comply with the requirements of section 9
- Any subsequent modification of your will must also comply with the
requirements in section 9
- The testator cannot exclude the application of section 9 to his will
- Our concern in this class is not about how to make a will, it is about ***
- If you read Family Law or *, you will find many cases on people contesting
a will, even when the will meets all the requirements on the face of it. For
example, Mojekwu v Mojekwu*** – In this case, even though the testator
complied with all the requirements, the person contesting said that at the
time of him signing the will and everything else, he was not of sound mind
Secret trusts
- What is the connection between secret trusts and testamentary trusts?
- About 99% of secret trusts arises out of a will, but about 1% arises outside
of a will
- A will is a public document, which creates a problem when you have shady
stuff you want to use your will to do. For example, you have a secret
second family and want to leave things in your will to both your first family
and second family. You can secretly give someone the money you want to
give to the second family without the first family knowing. However, things
might not go according to plan. For example, the person you entrust with
the money for the second family could choose to pocket that money. If you
take them to court, they may argue that they did not receive any money
from you, or that you did not comply with the Wills Act (since you wanted
to keep it secret) so you aren’t entitled to get the money back
- There could be other reasons for you wanting to maintain confidentiality
when disposing of your property. For example, you have stolen money
from your public office and wish to hide this fact when disposing of your
property/ money
- There are two types of secret trust
- 1. Full secret trust
- Here, the existence of the trust is not disclosed on the face of the will
- See the example he gave earlier, where on the face of the will, you give a
person money as a beneficiary, but meanwhile you have secretly agreed
with him that he is to hold the money on behalf of your second family
- You can regard this person as the primary donee, but off the record there
are secondary donees who are not shown on the will
- Full secret trust occurs where the will lists someone as a beneficiary when
in actuality they are secretly a trustee/ primary donee holding the money
on the behalf of some beneficiaries/ secondary donees
- 2. Half secret trust
- This occurs when in the will you list the primary donee as a beneficiary
and put in the will that they are to hold the money for a purpose that you
will specify
- The difference between no 1 and no 2 – The language that would be used
in no 1 would name the person as a beneficiary when in actuality they are
secretly a trustee for the secondary donees/ the actual beneficiaries. The
 language that would be used in no 2 would name the person as a trustee,
but will not state who the actual beneficiaries are
- > For example, a half secret trust in a will could say, ‘20 million to Mr A for
the purpose which I disclosed to him’. Upon reading this, it would be
obvious that Mr A is a trustee, not the actual beneficiary, even though the
actual beneficiaries have not been mentioned
- > So basically, for full secret trust, the fact that the person is a trustee is
not known, and the actual beneficiaries are not known. But for half secret
trust, the fact that the person is a trustee is known, even though the
actual beneficiaries are not known
- When it comes to full secret trust, oral evidence can be admissible to
prove its existence
- A problem with a full secret trust is the trustee taking the money for
themselves
- There are requirements for there to be a valid full secret trust
- 1. There must be clear indication that the testator intended to create a
secret trust
- Mccormyck v Rogan – In this case, a testator made a will and gave all his
properties to the defendant in the case. On his deathbed, he invited him to
communicate the fact that he is going to give him the properties, and to
tell him that there will be a letter for him that will come with the will. Then
he died. The will was opened, and the letter was read; the letter contained
a list of persons who were to be actual beneficiaries. However, the letter
also stated that D could use his discretion to do as he thinks the testator
would have done if he was alive. D chose to give money to some people
on the list and not some others on the list. The plaintiff was one of the
people that did not get anything, and he argued in court that there was a
secrete trust created in his favour, so he was entitled to a share. The court
held that given the circumstances of the case and the wording of the
letter, there wasn’t a firm command for D to give the money to the people
on the list, instead, it was left up to D’s discretion. So, there was no secret
trust
- 2. There must be communication by the testator to the supposed trustee
about the terms of the trust
- This communication is very important
- There must be communication between A (the testator) and B (the trustee
that appears on the face of it as a beneficiary) that the money B is holding
is not actually for him, but for other people
- Must communicate your intention and also the terms of the trust (what
property are you giving, who are the actual beneficiaries, how will it be
shared amongst them)
- There is a timing for the communication – If you want to distinguish
between half and full secret trusts
- In the case of a full secret trust, communication must be done either
before the will was made, during the will being made, or after the will
being made but before the death of the testator. Communication done
after the death of the testator is not valid
- In the case of half secret trust, the communication must be before the will,
or at the time of the will, but not after the will has been made. Here, if you
make the communication after the will has been made, it is null and void
- Ottoway* v Norman – This laid down the requirements for full secret trust –
Basically says that there must be intention to create a trust, there must be
communication of that intention, and there must be acceptance
- Wallgrave v Tevvs – In this case, a person wrote a will, and in that will, she
bequit 12,000 pounds to two persons, which on the face of it appeared to
be donations she was giving to them. Just before she died, the executor of
the will was given an instruction to write a letter to the ‘beneficiaries’ to
explain that the money was for certain purposes. She died and the letter
was not yet written. It was after her death that the ‘beneficiaries’ found
out that they were actually supposed to hold the money for other people.
The question was whether there was a secret trust, and if so, if it was full
or half?
- > For the purpose of exam, there are four categories of secret trust
- > Valid or invalid full secret trust
- > Valid or invalid half secret trust
- > First ask if it is full or half, then ask the question of whether it is valid or
invalid
- > What determines whether it is a full or half secret trust is the language
of the will. In the example above, on the face of it, appears as if the
persons the 12,000 pounds is going to are the beneficiary, and there is no
indication on the will that they are actually supposed to be trustees. So,
this is a case of full secret trust. Is it valid or invalid? It is invalid, because
the communication was done after the death of the testator, which makes
it an invalid full secret trust. That was the verdict of the court in the case
- Note that in the case of a regular will with no secret trusts, the executors
are the trustees of the will. But when it comes to secret trusts, this is a
type of trust brought by equity into the will itself
- > For example, A makes a will and in the will says that 1million will go to
B. The executors/ trustees of the will generally, will give B the money.
However, A has secretly told B that the money is not for him but is for
another person. This means that B is the trustee for that 1 million that he
has been given, and he is to give the money to the secondary donee
- 3. Acceptance by the person to serve as a trustee
- If the primary donee has not accepted their role as a trustee, then the
secret trust is not valid
- The law has created the concept of constructive communication and
constructive acceptance – you look at the circumstances of the case and
presume that there is communication and acceptance
- > For example, A makes B a primary donee and B does not do or show
anything to show that he is rejecting that role, the law will presume that
there is acceptance. This presumption will arise if B does not outrightly say
no
- Comparing this with the requirements for half secret trust
- In the case of half secret trust, only evidence that is consistent with the
will would be admissible. But for full secret trust, oral evidence or written
evidence will be admissible***
- Blakeford v Wilks – A testator made a will and in the will, she granted a
bond (a kind of investment) to someone. D came to meet her, and asked
her to give him the bond, and said that he would give it to the actual
beneficiary when she dies. The testator/ testatrix (for female testators)
 then changed her will and made the bond in D’s name. D later refused to
give the bond to the actual beneficiary. The actual beneficiary/ secondary
donee then came to court to give oral testimony that D was actually
supposed to be a trustee and was supposed to give him the bond. The
court held in the actual beneficiary’s favour
- In the case of a full secret trust, communication must be done either
before the will was made, during the will being made, or after the will
being made but before the death of the testator. Communication done
after the death of the testator is not valid
- In the case of half secret trust, the communication must be before the will,
or at the time of the will, but not after the will has been made. Here, if you
make the communication after the will has been made, it is null and void
- Blackwell v Blackwell – A testator gave 5,000 pounds to five persons, but
in the will, he stated that it would be for purposes that would be made
known to the five persons (they were executors and on the face of the will
were beneficiaries as well). At the time of making the will, he called one of
the five persons, and said this money is actually for this and that person,
they are the actual beneficiaries. For the other executors, he just gave
them the outline of the will, not the underlying purposes. The wife
contested the will when he died, and argued that it did not comply with
section 9 of the Wills Act
- > The court said that this is a valid half secret trust, because he disclosed
to one of the primary donees the persons that they were actually trustees,
and disclosed to him the actual beneficiaries before he died
- Q – When it comes to exams, you have to address these two questions
separately – Is it full or half secret trust? Then is it valid or invalid?
-

11-6-24
Constitution of trust/ conveyance of property
- Moving an interest from the owner to the trustee
- There are two ways to do this by law
- 1. Constitution of trust
- This is when you transfer the interest in the trust property to the trustee
- It is necessary to transfer interest from the creator of the trust to the
trustee so that the trustee can validly pass it onto the beneficiaries
- 1. Gift
- Here, you transfer the entire legal and equitable interest from the
transferor to the transferee
- 2. Transferring title to the trustee to hold for the benefit of the
beneficiaries
- So, the trustee will have the legal interest, while the beneficiaries will have
equitable interest
- 3. Declaration
- Here, you are not transferring interest to anybody, but you (the owner of
the property) declare that you are holding some of your property on behalf
of certain beneficiaries
- Can be in oral or in writing
- Oral can be problematic, because it is harder to prove than if it is written
- We’re not concerned with gifts in this class, any questions we’ll get will
most likely be on transfer of title and declaration
- Q – A declares that he is holding certain of his properties for B, but he later
takes it back and B does not have any proof (no writings or witnesses),
what is your advice to B?
- Q – What are the requirements for the transfer of different types of
property?
- > Landed property must be by writing (see section 9 Statute of Frauds,
section 78 Property and Conveyancing Law), deed, registration
- > Shares must be by memorandum of transfer, registration
- > Chattels (e.g., a painting) must be by writing, deed of transfer, and
there must be delivery (delivery can be actual or constructive, actual is
where I directly give you the property, constructive can be where I give
you the means by which you are to access the drawing)
- Q – When you get a question, identify the type of property that is being
talked about, then the laws and requirements needed for that type of
property
- When you don’t meet all the requirements for the transfer of property
under law, then your trust fails, and the beneficiaries become volunteers,
and they cannot enforce the trust. There are exceptions under equity
though:
- 1. Donatio mortis causa
- This is where you make the gift when you are about to die/ a gift made by
a person who is about to die
- You must actually end up dying – but doesn’t apply if you commit suicide
- It is a present gift, not a future gift
- There must be actual or constructive delivery
- The gift is within subject matter of donatio mortise causa
- Example – A is on his way to meet his lawyer with his driver, then they
have an accident and A is about to die. A makes a promise to B (the
driver) that he will get A’s house in Maitama. This is a future gift, not a
present gift, so it is not valid
- Q – A gifts B a cheque as he is about to die, is this valid? No, it is not valid,
A is already dead and would not be able to verify the cheque if there is
need to do so
- Q – A gives C a cheque to give B as A is about to die, is this valid? Yes,
because C is alive and able to give the cheque to B, and can verify the
validity of the cheque on behalf of B
- 2. The rule as is in the case of Strong v Bird (or the Strong v Bird rule)
- Example – A hires B to work for him on the condition that after 20 years, B
would have the house that A is living in (A does this instead of paying B
money). A ends up not giving the house to B. A makes a trust on behalf of
his children and makes B the trustee. Equity would make it so the house in
the trust goes to B
- 3. Proprietary estoppel
 - Example – A promises to give B a house, and while A is still alive, B starts
renovating the house. A doesn’t say anything about it and keeps quiet,
and after B is done renovating, A changes his mind and says that he won’t
give B that house anymore. B can take A to court and argue that by virtue
of laches and acquiescence A is estopped from refusing to give B the
house
- Q – If I want to create a trust over money, how do I constitute the trust?
- > There must be actual delivery*
- Note the maxims, ‘equity does not assist volunteers’ and ‘equity does not
perfect an imperfect gift’
- > When you have followed all the necessary requirements and stuff, then
your gift is said to be perfect
-

24-6-24
- There will be a quiz on the 8th of July
- We’ll do three CAs with Nyako, each one will be scored out of ten
- In answering the assignment we did, we were to talk about
- > What the connection is between testamentary trusts and secret trusts
- > Whether secret trusts come under the Wills Act and are an exception to
section 9
- > The consensus is that secret trusts is a separate concept, it is a creation
of equity operating outside of the Wills Act
- > So, it would not be correct to say that secret trusts are an exception to
the provisions of the Wills Act – Shit, that was my argument
- > First talk about the two forms of secret trust, then talk about their
compatibility with the Wills Act separately, because there would be some
differences – For example, while oral evidence would be admitted to prove
the existence of a full secret trust, that would not be permitted in the case
of half secret trust if the oral evidence contradicts the terms of the written
will
- > There are different theories that justify the existence of secret trusts,
but the dominant theory is the fraud theory – Says that secret trusts are
accepted/ enforced so as not to allow someone commit fraud by relying on
the provisions of a statute (the Wills Act)
- > For the conclusion of the essay, must not necessarily say that secret
trusts are compatible or incompatible with the Wills Act – Say that it is an
independent/ separate concept outside the purview of the Wills Act
created by equity in order to ensure fairness and justice (and in order to
prevent people from using the Wills Act to commit fraud)
Charitable Trusts
- Things done for public good/ benefit can be considered charity
- There is no concise/ precise/ clear definition of what charity is
- Charitable trusts are under the category of express trusts, specifically
public trusts/ it is a kind of express public trust
- Being a public trust, one of the differences that differentiates a public trust
from a private trust, is that in the case of a public trust, enforcement of it
is not for the individual to do, it is only the state that can enforce a public
trust, and this is usually done by the AG of the federation or an AG of a
state
- How do you identify charitable trusts?
- There are two key requirements that you should look out for – A trust must
pass these two requirements for it to be a charitable trust
- 1. The trust must be for a charitable purpose or object
- The aim/ purpose/ object of the trust must be charitable
- There is no concise/ precise/ clear definition of what charity is, and there is
also no concise definition of what a charitable purpose or object is
- However, the law has over time given us various definitions
- The first definition of charitable purpose can be derived from the Statute
of Uses (also known as the Statute of Elizabeth 1601)
- > In the Preamble, a description was given of what would amount to a
charitable purpose or object
- > This statute has been repealed, but what was written in the Preamble
has formed the basis of judicial definitions of what a charitable purpose or
object is
- > Q – Don’t worry about this historical stuff, don’t write them out in the
exam for him
- This is the important definition to note
- In the case of Commissioners of Income Tax v Pemsel, Lord Macnaghten
outlined the definition and scope of charitable purpose or object
- He outlined four principles/ four areas that provides the scope of
charitable purpose or object
- 1. Trust created for the alleviation of poverty
- Poverty here does not mean that you have to reach the level of being
destitute or being in extreme/ abject poverty (i.e., you cannot afford basic
amenities like food and shelter)
- What the law looks at is the intent behind the trust/ what is the target
audience/ who are the beneficiaries/ what class of people are targeted by
the trust – You would have to look at the language of the trust instrument
in order to determine if it can be accepted as a trust for the alleviation of
poverty
- > For example, a trust was created for the benefit of some members of
the working class, and the key phrase in the trust was working class. The
question was whether that description could qualify the trust as one for
the alleviation of poverty. In the case, the court held that it does not
qualify because the term working class is too wide and can contain both
those who are poor and those who are not poor
- > A trust created for the benefit of widows and orphans was held to qualify
as a trust for the alleviation of poverty – Though being a widow or an
orphan does not mean that one is living in poverty, the term ‘widows and
orphans’ concern people that might need support or might be poor
- When interpreting these things, look at the context of the environment
- Look at the case laws, get three cases that qualified here and three that
did not qualify
- 2. Trust created for the advancement of education
- Here as well, it is not as straightforward to determine what the
‘advancement of education’ means exactly. But looking at cases, you
would be able to determine the scope/ extent of this no. 2
- Must not be solely formal education, even informal education can qualify
here, as long as it incorporates research and learning
- Look at the case laws, get three cases that qualified here and three that
did not qualify
- 3. Trust created for the advancement of religion
- Again here, it is not easy to define the scope of this
- A society or group that organizes themselves for the purpose of training
someone on morality and good behaviour does not qualify here. According
to the case law, it must involve the faith or belief in a supernatural being
that is entitled to worship. It doesn’t matter how many members are in the
religious group, or what the religion is
- Look at the case laws, get three cases that qualified here and three that
did not qualify
- 4. Trust created for other purposes that are for public good but don’t fall in
the above three categories
- Don’t assume that ‘other’ has no boundary, we’ll look at the boundaries
for this number four
- There are some things that have been listed to fall under this ‘others’ but
note that there are others under others
- > Trusts for sports or recreation
- > Health
- > Trusts for the protection of animals
- >>> For example, in a case, someone created a trust in order to protect
the welfare of animals against human beings. The trust was not carried
out because it was focused on preventing people from eating animals and
stuff***
- > Others/ other trusts considered beneficial for the community
- Look at the case laws, get three cases that qualified here and three that
did not qualify
- 2. Generally, it must be for a public purpose/ it must have a public
element
- You cannot create a charitable trust for the benefit of an individual/ private
person, it must be for the benefit of the public at large or a section of the
public
- Iyanda v Ajike – A made a will, and in the will A said that one of his
properties should be sold, and the rent be applied to maintain a mosque/
prayer house attached to his family house. Blah blah***. The question was
whether this was a charitable trust or not
- > To the extent that the trust is concerned with giving resources for the
maintenance of a mosque, it passes requirement one. However, it does
not pass requirement two. The court held that given the circumstances
(given the location of the mosque in a family house, and the fact that it is
the family that would use it not members of the public) it is not a
charitable trust because the public element was not fulfilled
- 2.1 Sub requirement
- There must be a wholly public element/ charitable purpose
- Reverend Shodipo v FBIR – Here, Reverend Shodipo can be said to have
been acting as a trustee of the church. FBIR checked the church and found
out that they were making money from providing a guesthouse for people.
FBIR tried to tax them for this, but the church said that the guesthouse
was operating under a charitable purpose. The court held that for
something to qualify as a charitable purpose, it must be wholly charitable
purpose/ charitable element. While the church was operating charitably,
the guesthouse was being used for a commercial purpose, so there was
not a wholly/ completely charitable purpose in operation
- As a general rule
- These two requirements in bold above must be fulfilled for a trust to be a
charitable trust
- However, there is an exception
- The court has held that a trust for the alleviation of poverty does not have
to fulfil requirement no. 2
- Case *** - A set up a trust for the allocation of funds for the education of
her three children. There were about 25 of them that qualified as
descendants. The question here was whether the trust was charitable or
not; the question was important because whether it was a charitable trust
or not would determine if tax would be paid from the funds or not. The
court held that it did not qualify as a charitable trust, it was for her family
members, not members of the public
- Benefits of charitable trusts
- Looking at this would indirectly provide the answer for what the
differences are between public and private trusts
- Q – We won’t be asked direct questions in the exams, we would be given a
scenario to look at and determine what type of trust there is, etc
- 1. Entitlement to tax relief/ exemption from taxation
- Private trusts do not enjoy any tax benefits or tax exemptions
- Most of the cases above (e.g., Shodipo v FBIR) were in dispute because
they needed to determine whether or not funds from the relevant trust
would be subject to taxation or not
- 2. Exemption from certainty of object
- 3. Exemption from the rule against perpetuity
- Perpetuity is a concept that is applicable against private trusts – A private
trust cannot be forever; it must have a determinable date*
- 4. The cypres rule
- This is a rule that validates a private trust when elements of invalidity
occurs/ are present
- > It applies in two ways – Sometimes you create a trust, but because of a
missing requirement, it is invalid ab initio; or sometimes you create a trust
that is valid, but it subsequently becomes invalid. For example (for the
second scenario), you create a trust, and the object of the trust gets
destroyed, or the beneficiary dies before the trust can be carried out
- > For private trusts, any time an invalidating element occurs, the trust
cannot be carried out, and the trust comes to an end. Resulting trust then
steps in to solve the problem of the trust no longer being valid, and the
 property goes back to the estate of the deceased person to be shared
according to the person’s custom
- In the case of charitable trust, the above is not what happens. The trust
will not fail simply because an object of a charitable trust is no longer
there, and the trust cannot be performed as initially created. For example,
your trust concerns giving funds to a school, but the school gets shut
down. Instead of the trust coming to an end (like it would if it were a
private trust), the court will substitute another object close enough to the
former object so that the trust may continue. However, if the trust was so
definite that a new object cannot be substituted, the trust would still fail.
Otherwise, the substitution would be made, and the trust would still be
carried out
- 5. In the case of private trust, the trustees must act unanimously. But in
the case of charitable trust, things will be done according to what the
majority wants
- Charitable trust is a public trust, but it is not the only form of public trust.
There are also statutory trusts, which can fall under both private and
public trust
-

1-7-24
- CA on Monday with Nyako
- > Less than 15 minutes
- Q:
- Who is Lord Macnaghten
- What was the decision in Commissioners of Income Tax v Pemsel (case
where Lord M gave the four areas under the scope of ‘charitable purpose’)
- What was the issue in Iyanda v Ajike (mosque prayer room case)
- Talk about what happened in the case of Shodipo v FBIR (church guest
house case)
- Etc
TRUSTEES
- No trust can function without trustees
- > Note that this is not the same thing as saying that a trust in invalid
without trustees
- > Law and equity always find a way of filling a vacuum
- > For the trust to be functional/ carried out, there must be trustees
- We’ll talk about:
- 1. Appointment
- 2. Duties
- 3. Powers
- 4. Removal
- 5. Remedies for the breach of trust
- Remember the trust is a tripartite relationship between the creator of the
trust, the trustee, and the beneficiary
- The whole idea of trust is hinged around the trustees, which is why this is
being discussed as a topic of its own
- Appointment of trustees
- 1. Appointment by the creator of the trust (settlor/ testator)
- As a general rule, each time a settlor/ testator creates a trust, they
appoint the trustees as well
- *****
- Sometimes, the settlor/ testator does not appoint the trustee in the trust
instrument. They could instead pick a person that would appoint the
trustees
- The moment a creator creates a trust and appoints trustees, he becomes
what is known as functus officio – meaning that you have exhausted your
role, and you don’t have any other role to play when it comes to the trust
instrument
- The trustees take over; the creator can’t recall the trust property back or
make the trustees manage the property in a certain way
- If the settlor wants to also be able to manage the trust property after the
creation of the trust, then he can do this in two ways
- i. He can make himself a trustee
- Here, the settlor acts as a trustee, not as a settlor
- If there is any role that the settlor wants to play in a trust after the
creation of the trust, he must provide for such in the trust instrument.
Otherwise, he would be functus officio
- ii. ***
- 2. Appointment by trustees
- Trustees can appoint subsequent trustees, as provided by law or the trust
instrument
- 3. Appointment by statute
- There are two sections of the Trustees Act 1893 that govern the
appointment of trustees
- One is section 10, the other one is section 25
- Note the sources of the Law of Trusts – Common law, equity, statute – The
primary statute is the Trustees Act of 1893 (as amended)
- Scenario – John creates a trust and appoints four trustees (A, B, C, and D).
Trustee A dies. The law says no problem, the remaining three trustees can
continue without any effect. Then B resigns or is removed. The law says no
problem, you have C and D. C is subsequently disqualified from acting as a
trustee. At this point, D becomes a sole trustee, the law says carry on.
What would happen if D died? – There would then be no trustee. The
statute says that the legal representative of the last trustee can appoint a
trustee
- 4. Appointment by the court
- The court is empowered to do so either by some express provision of
statute, or by the inherent jurisdiction of the court (even if there is no
statute)
- As a general rule, the court will not interfere in the appointment of
trustees except it has been shown that it is inexpedient, unpracticable, or
 unrealistic for the trustees to be appointed in a different way other than by
the court
- Example – In the scenario we painted above where the last surviving
trustee dies, and his legal representative is not willing to appoint a new
trustee, there would be a vacuum the court has to fill
- Example – Where you have three *** that don’t agree with each other at
all, the court can interfere and appoint a trustee on the application on any
of the trustees or some other stakeholder***
- Example – Even if there are two or three or so trustees in place, but they
are unable to agree with each other for the purpose of making an
appointment in order to fill a vacancy, then the court will intervene to fill
that vacancy
- The court only appoints trustees in very rare and exceptional
circumstances
- Duties/ roles of trustees
- 1. Collect and take custody of the trust property
- The will go on a ‘search, locate, and retrieve’ mission
- The first thing the trustee has to do is identify the assets he has been put
in control of, trace them, and take control of them
- 2. Management of the trust asset/ property
- This is now in the hands of the trustees
- 3. Duty to distribute assets
- 4. Duty to comply with/ carry out the instructions of the settlor/ testator as
contained in the trust instrument
- Note that non-compliance with the duties of a trustee amounts to a
breach of trust
- 5. Duty to act gratuitously
- This means that a trustee acts free of charge in their role
- This is not a salary job, it is not based on renumeration
- Note that this is a general rule, but there are exceptions where some form
of commission or renumeration is allowed
- Example – If the trade and custom of the particular role requires payment,
e.g., if the person is a lawyer***
- This does not mean that you cannot give your trustee money at all if you
want to***
- 6. Duty to insure the trust property
- Especially against fire, there is a law that says trustees must insure landed
properties against fire
- 7. Duty not to delegate
- Trustees are not expected to delegate their role to another sub-trustee. It
comes within the category of personal service, the appointment is
personal to the trustee
- This again is a general rule, but there are exceptions when delegation can
occur
- Fiduciary duties
- These are created by equity as additional duties imposed on trustees (note
that the ones above were mostly created by common law)
- 1. Duty to avoid conflict of interest
- Case*** - A trustee was appointed to manage properties for the settlor, for
a beneficiary that had beforehand borrowed money from the trustee and
 had not paid it back. The trust property that the trustee was supposed to
give the beneficiary was money. The court held that this is a breach of
fiduciary duties, because there is a conflict of interest (since the trustee is
the beneficiary’s creditor and would be tempted to take the money from
the trust to pay the debt)
- 2. Duty to act in good faith
- 3. Duty to not make secret profit
- 4. Duty to account
- Can do further research on more duties that a trustee has
- Powers of trustees
- 1. Power to sell trust property
- Example – If the trust instrument prescribes the payment of money to the
beneficiary from the sale of a property
- 2. Power to insure
- The law requires the insurance of landed property against fire, but the
trustee can further insure stuff beyond that
- 3. Power to issue receipts
- 4. Power to compromise/ power to compound liabilities
- 5. Power to delegate
- Remember we said there is duty not to delegate
- > The exceptions to the duty not to delegate allow a trustee to have the
power to delegate (e.g., where the trade and custom allows the trustee to
delegate)
- > Note that a trustee cannot delegate his discretion/ allow someone else
to exercise a discretion on his behalf, but he can delegate the performance
of specific duties
- Breach of trust
- Note that just as a trustee is not to benefit from the trust, he is not
supposed to incur personal liability because of the trust – Trustees are
shielded generally from personal liability except in the case of negligence
or fraud – Here, the liability is on the trust
- Anytime a trustee acts contrary to their duties, there is a breach of trust –
The liability for a breach of trust is on the trustee, and the liability is to the
extent of the loss that has happened as a result of the trustee’s negligent
actions or inactions
- Note that all the trustees would be liable for a breach of trust, even if they
were not all involved in the breach. However, the law also allows a trustee
who believes he is innocent to go to court to seek indemnity from the
trustees that he believes are the ones that are liable
- > The reason for this is that it removes the burden from the litigant to
show which particular trustee is liable for the breach
- > Any trustee that believes they are innocent can then prove their
innocence in court
- 1. Damages
- 2. Remedy of accounts
- This is both a duty and remedy – The trustees are supposed to account for
their role in the management of the trust asset, and if they fail to do so
properly, the * can sue and get the court to give an order for accounts so
that the trustees have to give a breakdown of how they have managed the
trust property
 - 3. Tracing
- This is a remedy from equity
- Where a trustee fraudulently sells trust property and that property has
been changing hands, then a remedy can be granted to allow for the trust
property to be traced/ tracked down to where it eventually ended up –
Allows you know what happened to your trust property/ find out where it is
so that you can lay claim to it
- Removal of trustees
- 1. Voluntary removal
- This can be by resignation or retirement
- If you have been appointed as a trustee and don’t want to be a trustee,
then you can refuse the appointment through a disclaimer
- 2. Involuntary removal
- A trustee can only be removed for certain reasons
- i. A trustee can be removed in line with the provisions of the trust
instrument
- If there is a provision in the trust instrument on removing the trustee
- If there is no such provision, you could go to court to ask them to remove
them, or do sum with section 10 and 25 of the Trustees Act***
- ii. If the trustee is convicted of any offence bordering on ***
- iii. ***
Example – If you were acting as a trustee in your capacity as a legal
practitioner, and you have been debarred, then you can no longer be a
trustee
- iv. If the trustee has been declared bankrupt
- Don’t rely only on what he gives in class
-

Copy the wills notes from IB to here***

15-7-24
- Revision with Mr Nyako on what we’ve done so far with him
- In both full and half secret trusts, the identities of the beneficiaries are not
disclosed
- > Where the existence of a secret trust is shown in the will, it is a half
secret trust
- > Where the existence of a secret trust is not shown in the will, it is a full
secret trust
- Enforcement of the terms of the Wills Act is more visible in the case of half
secret trust than in the case of full secret trust
- The two main requirements for charitable trust:
 - > There must be charitable purpose/ object – See the Lord Macnagten
case
- > It must be wholly charitable purpose – See Reverend Sodipo v FBIR
- In the next class he’ll tell us the scores we got for the assignment
- What he expected in the assignment:
- > Originality i.e., you did your research and didn’t just copy what you
wrote from somewhere
- > Identifying (and also contrasting) the two forms of secret trust
- > The compatibility of secret trusts with the Wills Act – Is it part of the Act,
an exception from the Act, or is it completely independent from the Act (he
said the last one is the most correct answer)
- > Which of the two forms of secret trust is more compatible with the Act
- He is very strict when marking take home assignments, because it is open
book, and we are able to access the materials we need
- We’ll do some more revision in the next class with him
-

16-7-24
POWERS AND DUTIES OF TRUSTEES
- When a client comes to you:
- Familiarize yourself with the trust document
- Check that the property is fully vested in the settlor/ testator
- Powers
- 1. Administration of property
- Managing the trust
- 2. Advancement
- Duties/ Fiduciary duties
- You are in a fiduciary relationship with the owner and the beneficiary
- 1. Can’t make secret profits
- 2. Can’t deal with the property unfairly
- 3. Duty to account
- 4. Duty to provide information – Related to the above
- 5. Duty not to compete with the trust
- Your personal business can’t be in the same line of business with the trust
you’re managing, because there would be conflict of interest
- There must be a minimum of at least two trustees***
- Joinder of parties – ***
- 6. Duty to distribute according to the trust instrument
- Advancing stuff to the beneficiaries
- You can be sued personally or proprietarily – ***
- > You would be sued proprietarily if you fraudulently make money from or
sell the trust property, and the person suing you can be given the remedy
of tracing
- Doctrine of tracing, oil and gas environmental example***
- Note that these can be done if provided for in the trust document:
- > Insuring the trust property
- > Selling it
- Remedies for a trustee breaching duties
- Q – A client comes for a client interview and tells you that though trustees
have a duty to account/ provide information, his trustee has not done so.
What would be your advice to him?
- > Look at issue of jurisdiction, which of the courts do you go to for this
- > By what process am I going? – Is it motion on notice, motion ex parte –
You use originating motion, motion ex parte (because this is a one sided
and urgent application) supported by affidavit and written address. The
most important thing you need to show in the written address is the
urgency of the matter
- There is a case rn where a SAN was asked to pay a client 20 million
damages because he instituted an action wrongly
- **********
- **********
- 1. Damages
- 2. Specific performance
- 3. Removal
- 4. Cancellation
- 5. Injunction
- Note that you can only restrain what has not been done. If it is a breach
that is about to happen or that is already happening, then you can use
injunction to prevent the breach from happening or prevent further
breach. If the breach has passed, then use a remedy like accounts***
- 6. Account
- Know the type of remedy to ask for
- Always ask for more than you want (when it comes to damages), because
the court will probably award less
- Note that action can be taken against third parties or outside parties as
well that come and meddle with the trust property
- 7. Tracing
- They have done away with your property, so you trace the property or
trace the proceeds of the sale of the property
- 8. Restitution
- This is sort of like equity’s version of damages; that which you have lost
would be restored to you either in monetary form or other
- The court will try to put you back in the shoes that you were in before the
defendant did what he did that affected you or took you from your position
- For example, the trustee has sold off your property fraudulently, you trace
what has happened to the property, then the property (or the proceeds
from it) when found can be restored to you
- Don’t forget the administration of equity and common law is merged, so
you can be given both common law and equitable remedies for the same
matter
- Defences
- 1. Exemption clause
- E.g., an indemnity clause
- You can say that a certain clause gave you the discretion to do what you
did or exempted you from liability for certain things
- 2. Laches and acquiescence
- 3. Limitation of time
- Q – What defences would you use if you were defending a third party/
outside party that was sued? – You can use the defence of them being a
valid purchaser for value without notice***
- 4. Bankruptcy
- Once the trustee is declared to actually be bankrupt by a court, then you
are on your own and can’t get the property/ money they mismanaged
back
- Polographic* will – Hand written
- Practice questions
- Q – These may or may not come out in the exam
1. ‘It is an inflexible rule of a court of equity that a person in fiduciary position
is not unless otherwise expressly provided, entitled to make profit, he is not
allowed to put himself in a position where his interest and his duty conflict’
(Lord Hershell in Bray v Ford (1896)). Discuss the impropriety or otherwise of
this statement***
- Mr Bello – This question can be answered in two ways, you can agree or
disagree
2. Balafama and Aisha hold N200,000,000 on trust for Chioma with the
remainder for Daniel. They have little knowledge of the investments. A friend
recommends Amina, a computer engineer, as someone who could manage
their investments. Amina recently inherited N10,000,000 and after investing
it, made a profit of N2,000,000.
Balafama and Aisha employed Amina who makes the following investments in
May 2024
i) *** In May 2025, Amina tells the trustees that shares and villas are
performing well and that IP-Ops has had profitable first year of business. ***
- Praise – Amina has breached two duties, the duty to obey and to not
compete with the trust. So, the beneficiaries can sue her as a third party
personally in order to recover their money
- Mr Bello – Identify who the different parties are, so that you know who to
sue/ the capacity in which you are suing them. Amina cannot be said to
have breached the duties to obey and not compete, because she is not a
trustee. The beneficiaries are supposed to sue the trustees for failing in
their duty to administer, and for sub delegating their functions to another
person. If it is the beneficiaries you are advising, you can’t go after third
parties directly, sue the trustees and then join the third parties to the
suit***
- Q – AOC – There will be a question on wills
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- Removal of trustees
- Also see the previous notes on this
- 1. Disclaimer
- What a trustee that has been appointed but does not want that
appointment can do
- They use this to reject the appointment
- 2. Removal
- This would first of all depend on whether or not the trust instrument
provided for the removal of the trustees
- If there is no such provision, then you can use sections 10 and 25 of the
Trustees Act
- This is forceful removal of the trustee, not the trustee voluntarily retiring
themselves
- 3. Retirement
- Here, you must also look for if there is a provision in the trust instrument
to allow a trustee to retire
- If there is no such provision, then you can use sections 10 and 25 of the
Trustees Act
- One of the sections says that if new trustees are appointed, then an
already existing trustee can choose to retire
- The court can be approached to allow the trustee to retire, in the event
that there are no other available avenues for retirement
- Q:
- There could be multiple legal issues in one case study
- For example, a case study may have the issue as to whether there existed
a duty on the trustee’s part, whether there was a breach of the duty, and
what remedies would be available for the breach
- For the application part of IRAC, you must compare the facts of the case
study with the rules that you have underlined/ apply the rules to the facts
of the case study and make your analysis
- Make sure you introduce what you want to say, maybe in like a sentence
- We’re meeting next Monday for revision, he’ll give us our scores for the
secret trusts assignment, and he’ll bring past question papers to class for
us to discuss
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