MCQ Equity and Trust Law PDF

MCQ: Equity and Trust Law (Lectures 1 to 12) Lecture 1: Equity & Trusts 1. What does equity primarily aim to achieve in the legal system? a) Certainty in judgments b) Fairness and justice c) Replacement of common law d) Statutory enforcement 2. Who historically handle...

MCQ: Equity and Trust Law (Lectures 1 to 12) Lecture 1: Equity & Trusts 1. What does equity primarily aim to achieve in the legal system? a) Certainty in judgments b) Fairness and justice c) Replacement of common law d) Statutory enforcement 2. Who historically handled equity cases? a) Common law judges b) The Chancellor c) The Monarch d) Parliament 3. Which case established that equity prevails over common law in conflicts? a) Penn v Lord Baltimore b) Earl of Oxford Case (1615) c) Cross v Cross (1983) d) Walsh v Lonsdale (1882) 4. Which act unified equity and common law under one court system? a) Judicature Act (1873-1875) b) Wills Act (1837) c) Statute of Frauds (1677) d) Law of Property Act (1925) 5. What does “equity acts in personam” mean? a) Equity acts on property rather than people b) Equity focuses on persons, not just property c) Equity prioritizes legal remedies d) Equity bypasses statutory rules Lecture 2: Maxims of Equity 1. Which maxim means “a claimant must not have acted unfairly or improperly”? a) Equity follows the law b) Delay defeats equity c) He who comes to equity must come with clean hands d) Equity will not act in vain 2. What does “equity follows the law” ensure? a) Equity does not override common law unnecessarily b) Equity must focus solely on fairness c) Equity should intervene in all disputes d) Equity prioritizes tangible property 3. Which case highlighted that unreasonable delays can defeat equity claims? a) Comiskey v Bowring-Hanbury b) Leaf v International Gallery c) Cross v Cross d) Katherine v Henredon 4. Which maxim reflects equity's focus on intent over formalities? a) Equity acts in personam b) Equity is equality  c) Equity looks to substance, not form d) Equity will not permit a statute to be used as an instrument of fraud 5. What does the maxim “equity is equality” imply? a) Equity focuses on property rights b) Equity ensures fair distribution among parties c) Equity enforces strict rules d) Equity overrides common law Lecture 3: Types of Trusts 1. What is the primary purpose of a trust? a) To avoid taxation b) To manage property through a settlor, trustee, and beneficiary relationship c) To ensure complete property transfer to a single owner d) To enforce common law rights 2. Which of the following is NOT a type of implied trust? a) Statutory trust b) Resulting trust c) Express trust d) Constructive trust 3. What distinguishes a charitable trust from a private trust? a) Charitable trusts focus on property maintenance b) Private trusts are exempt from taxes c) Charitable trusts benefit the public, while private trusts benefit specific individuals d) Charitable trusts require statutory approval 4. Which case confirmed equitable interest in trust property rights? a) Hussey v Palmer b) Abrahams v Trustee in Bankruptcy c) Walsh v Lonsdale d) Katherine v Henredon 5. Which legislation governs the formal requirements for trusts of land? a) Statute of Frauds (1677) b) Wills Act (1837) c) Judicature Act (1873-1875) d) Law of Property Act (1925) Lecture 4: The Power of Appointment and The Three Certainties 1. What is a "power of appointment"? a) The right of a trustee to enforce legal obligations b) The authority given to someone to distribute property c) The legal enforcement of equitable interests d) The creation of a public trust for charity 2. Which type of trust allows trustees to withhold some property for future beneficiaries? a) Fixed trust b) Non-exhaustive discretionary trust c) Exhaustive discretionary trust d) Testamentary trust 3. What are the three certainties required for a valid trust? a) Words, subject, and object b) Property, intention, and purpose  c) Trust deed, settlor, and beneficiary d) Land, chattels, and monetary assets 4. Which case highlighted that precatory words are insufficient to create a trust? a) Lambe v Eames (1871) b) Comiskey v Bowring-Hanbury (1905) c) Palmer v Simmonds (1854) d) Re London Wine (1986) 5. Which certainty requires the trust property to be identifiable? a) Certainty of intention b) Certainty of subject matter c) Certainty of objects d) Certainty of legal validity Lecture 5: Formality Requirements 1. What is required for the conveyance of land under the Law of Property Act (1925)? a) A verbal promise b) An oral declaration c) A signed, sealed, and delivered deed d) A simple written note 2. Which case established that trusts in shares can be created orally? a) Rochefoucauld v Boustead (1897) b) Rowe v Prance (1999) c) Hunter v Moss (1994) d) Re Cole (1964) 3. What is a sub-trust? a) A legal mechanism to avoid formalities b) A trust where a beneficiary holds their equitable interest for another party c) A written declaration of legal ownership d) A statutory exception to trust law 4. Which maxim prevents statutory rules from being used for fraudulent purposes? a) Equity follows the law b) He who comes to equity must come with clean hands c) Equity will not permit a statute to be used as an instrument of fraud d) Equity looks to substance, not form 5. Which case involved a countess establishing an oral trust to retain ownership of her estate? a) Rochefoucauld v Boustead (1897) b) Nelson v Greening & Sykes (2007) c) Re Boyes (1884) d) Fowkes v Pascoe (1875) Lecture 6: Proprietary Estoppel 1. What is proprietary estoppel primarily used to address? a) Breach of fiduciary duty b) Unconscionable denial of rights over land c) Failure to comply with statutory requirements d) Improper creation of secret trusts 2. Which of the following is NOT a requirement for proprietary estoppel? a) Representation b) Reliance  c) Formal writing d) Detriment 3. Which case established the key principles of proprietary estoppel? a) Taylor Fashions v Liverpool Victoria (1982) b) Yeoman’s Row Management v Cobble (2008) c) Crabb v Arun (1976) d) Thorner v Major (2009) 4. What is the key concept underlying proprietary estoppel? a) Legal certainty b) Prevention of unconscionable behavior c) Reliance on formal agreements d) Property registration 5. Which case involved an oral promise of inheritance after unpaid labor on a farm? a) Thorner v Major (2009) b) Re Basham (1986) c) Greasley v Cook (1980) d) Wayling v Jones (1995) Lecture 7: Wills, Secret Trusts, and Deathbed Gifts 1. What law governs the formal requirements for wills? a) Law of Property Act (1925) b) Statute of Frauds (1677) c) Wills Act (1837) d) Trustee Act (2000) 2. What is the purpose of a secret trust? a) To avoid probate requirements b) To ensure legal enforcement of gifts c) To bypass public disclosure of beneficiaries d) To create an express trust without formalities 3. Which case highlights the need for communication before a will’s execution in secret trusts? a) Johnson v Ball (1851) b) Re Boyes (1884) c) Rochefoucauld v Boustead (1897) d) McCormick v Grogan (1869) 4. What is required for a valid half-secret trust? a) Oral communication only b) Specific property allocation c) Clear identification of the trustee and beneficiary d) Written communication signed by witnesses 5. What is a deathbed gift (donatio mortis causa)? a) A verbal gift made on the donor’s deathbed b) A written will drafted by a solicitor c) A formal trust created shortly before death d) A gift given with a trustee’s approval Lecture 8: Resulting Trusts 1. What is the primary characteristic of a resulting trust? a) It arises from the express terms of a trust b) Property returns to the settlor or their estate  c) It arises when there is a lack of certainty in trust creation d) It is used to enforce equitable remedies 2. Which of the following is a presumed resulting trust? a) Where the property owner explicitly states the trust b) Where a party contributes to the purchase price but is not listed as the owner c) Where property is held for a charitable purpose d) Where a trustee breaches their fiduciary duty 3. Which case involved a resulting trust due to a surplus fund for a public purpose? a) Vanderville v IRC (1967) b) Re Gillingham Bus Disaster Fund (1958) c) Fowkes v Pascoe (1875) d) Air Jamaica v Joy Charlton (1999) 4. What did the Equality Act 2010 abolish concerning resulting trusts? a) Presumption of advancement from husbands to wives b) Automatic resulting trusts for charitable cases c) Requirement for formal documentation in property transfers d) Inference of fraud in statutory transfers 5. What principle is commonly associated with preventing fraud in resulting trusts? a) Clean hands doctrine b) Equitable interest rule c) Statutory interpretation principle d) Bona vacantia doctrine Lecture 9: Charitable Trusts 1. What legislation governs charitable trusts in England and Wales? a) Wills Act (1837) b) Charities Act (2011) c) Trustee Act (2000) d) Statute of Frauds (1677) 2. Which of the following is NOT one of the traditional categories of charitable trusts? a) Relief of poverty b) Advancement of education c) Promotion of the arts d) Benefiting the community 3. Which case clarified that "poverty" does not require destitution? a) Re Coulthurst (1951) b) Re Sanders' Will Trust (1954) c) Re Niyazi (1978) d) Re Scarisbrick (1951) 4. Which of the following is a requirement for a trust to qualify as charitable? a) Public benefit b) Limited duration c) Specific beneficiaries d) Formal written declaration 5. Which case involved a trust benefiting amateur sports? a) Re Niyazi (1978) b) Re Sanders’ Will Trust (1954) c) IRC v McMullen (1981) d) Re Coulthurst (1951) Lecture 10: Fiduciary Obligations and Breach of Trust  1. What is the fundamental duty of a fiduciary? a) To act in their own interest b) To manage property with utmost loyalty to the beneficiary c) To distribute property equally among all parties d) To prioritize statutory requirements over equitable principles 2. Which of the following is NOT a fiduciary relationship? a) Trustee and beneficiary b) Lawyer and client c) Employer and employee d) Settlor and trustee 3. What principle prevents a fiduciary from profiting personally from their position? a) Doctrine of constructive trusts b) No conflict rule c) Clean hands doctrine d) Statutory compensation principle 4. Which case involved a breach of fiduciary duty regarding unauthorized profits? a) Keech v Sandford (1726) b) Re Niyazi (1978) c) Argyll v Argyll (1967) d) American Cyanamid v Ethicon (1975) 5. What remedies are available for breach of fiduciary duty? a) Criminal prosecution b) Rescission, account of profits, and compensation c) Statutory damages only d) Automatic transfer of assets to the fiduciary Lecture 11: Constructive Trusts 1. What is the purpose of a constructive trust? a) To enforce written agreements between parties b) To prevent unjust enrichment c) To simplify property registration processes d) To create public charitable purposes 2. Which case involved a constructive trust due to joint contributions to property ownership? a) Hussey v Palmer (1972) b) Rochefoucauld v Boustead (1897) c) Re Boyes (1884) d) Air Jamaica v Joy Charlton (1999) 3. What is the key test for establishing a constructive trust? a) Intent to create a trust b) Fiduciary relationship c) Proof of unjust enrichment or reliance d) Formal declaration of trust 4. Which equitable maxim is most relevant in the creation of constructive trusts? a) Equity looks to substance, not form b) Delay defeats equity c) Equity is equality d) He who comes to equity must come with clean hands 5. Which case emphasized that a constructive trust can arise without formalities? a) Bannister v Bannister (1948) b) Keech v Sandford (1726)  c) Taylor Fashions v Liverpool Victoria (1982) d) Thorner v Major (2009) Lecture 12: Equitable Remedies 1. What is the primary characteristic of equitable remedies? a) They act in rem (on property) b) They act in personam (on the person) c) They apply only to statutory cases d) They provide monetary compensation only 2. What is the purpose of a freezing injunction (Mareva injunction)? a) To prevent the dissipation of assets before judgment b) To allow search and seizure of evidence c) To compel the sale of rare property d) To avoid unnecessary court proceedings 3. Which case established the modern principles for interlocutory injunctions? a) American Cyanamid v Ethicon (1975) b) Chappell v Times Newspapers (1975) c) Mareva Compania Naviera v International Bulkcarriers (1980) d) Penn v Lord Baltimore (1750) 4. Which equitable maxim is reflected in the principle “equity will not act in vain”? a) He who seeks equity must do equity b) Equity follows the law c) Delay defeats equity d) Equity will not enforce impossible orders 5. In which case was specific performance ordered for the sale of rare china jars? a) Falcke v Gray (1859) b) Ryan v Mutual Tontine Westminster Chambers Association (1893) c) Francesco v Barnum (1898) d) Chappell v Times Newspapers (1975)