Chapter 7

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  1. Question 1 of 10

    1. What is meant by the term 'remedial constructive trust'?

    • Correct. Feedback: B is the correct answer. In the United States and Canada, as its name implies the remedial constructive trust is a remedy awarded by the court against a person who has been unjustly enriched.

    • Incorrect. Feedback: B is the correct answer. In the United States and Canada, as its name implies the remedial constructive trust is a remedy awarded by the court against a person who has been unjustly enriched.

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  2. Question 2 of 10

    2. What is the definition of a fiduciary?

    • Correct. Feedback: C is the correct answer. There are many different fiduciary relationships, e.g. trustee and beneficiary; solicitor and client; director and company. In each of these, one party acts for the other in a relationship of trust and confidence.

    • Incorrect. Feedback: C is the correct answer. There are many different fiduciary relationships, e.g. trustee and beneficiary; solicitor and client; director and company. In each of these, one party acts for the other in a relationship of trust and confidence.

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  3. Question 3 of 10

    3. Which of the following cases concerned an unauthorised profit made by a person in a fiduciary position?

    • Correct. Feedback: B is the correct answer. Keech v Sandford is the classic case where an unauthorised profit made by a trustee was held on constructive trust for the beneficiary.

    • Incorrect. Feedback: B is the correct answer. Keech v Sandford is the classic case where an unauthorised profit made by a trustee was held on constructive trust for the beneficiary.

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  4. Question 4 of 10

    4. Which of the following is not a fiduciary relationship?

    • Correct. Feedback: A is the correct answer. There is no fiduciary relationship between the settlor and the beneficiary.

    • Incorrect. Feedback: A is the correct answer. There is no fiduciary relationship between the settlor and the beneficiary.

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  5. Question 5 of 10

    5. Which of the following statements is correct regarding a proprietary remedy?

    • Correct. Feedback: C is the correct answer. The proprietary remedy enables the claimant to identify and recover his property or substituted property from the defendant.

    • Incorrect. Feedback: C is the correct answer. The proprietary remedy enables the claimant to identify and recover his property or substituted property from the defendant.

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  6. Question 6 of 10

    6. Which category of constructive trust is illustrated by Royal Brunei Airlines v Tan?

    • Correct. Feedback: A is the correct answer. Mr Tan, the managing director of Borneo Leisure Travel, dishonestly assisted the travel company in a breach of trust and was liable as a third party.

    • Incorrect. Feedback: A is the correct answer. Mr Tan, the managing director of Borneo Leisure Travel, dishonestly assisted the travel company in a breach of trust and was liable as a third party.

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  7. Question 7 of 10

    7. In which of the following cases was the test of dishonesty an issue?

    • Correct. Feedback: B is the correct answer. The House of Lords was concerned with the issue of dishonesty in Twinsectra Ltd v Yardley.

    • Incorrect. Feedback: B is the correct answer. The House of Lords was concerned with the issue of dishonesty in Twinsectra Ltd v Yardley.

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  8. Question 8 of 10

    8. Which of the following cases was concerned with the dishonest receipt of trust property?

    • Correct. Feedback: A is the correct answer. Although in BCCI v Akindele the Court of Appeal held that Chief Akindele had not been dishonest.

    • Incorrect. Feedback: A is the correct answer. Although in BCCI v Akindele the Court of Appeal held that Chief Akindele had not been dishonest.

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  9. Question 9 of 10

    9. Which case appears to illustrate that a fully secret trust is a constructive trust?

    • Correct. Feedback: C is the correct answer. In Ottaway v Norman an oral secret trust of land was upheld indicating that such a fully secret trust is a constructive trust. If it had been an express trust, it would have been unenforceable under s 53(1)(b) Law of Property Act 1925 - but constructive trusts are exempt from s 53(1) by s 53(2) of the Act.

    • Incorrect. Feedback: C is the correct answer. In Ottaway v Norman an oral secret trust of land was upheld indicating that such a fully secret trust is a constructive trust. If it had been an express trust, it would have been unenforceable under s 53(1)(b) Law of Property Act 1925 - but constructive trusts are exempt from s 53(1) by s 53(2) of the Act.

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  10. Question 10 of 10

    10. How does a constructive trust arise?

    • Correct. Feedback: B is the correct answer. An institutional constructive trust comes into existence by operation of the law in certain established situations, e.g. unauthorised profit made by a fiduciary.

    • Incorrect. Feedback: B is the correct answer. An institutional constructive trust comes into existence by operation of the law in certain established situations, e.g. unauthorised profit made by a fiduciary.

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