Tuesday, December 23, 2008

PUBLIC LAW, TORT AND TRUST

EXAMINER'S REPORT 2008

PUBLIC LAW ZONE A

GENERAL REMARKS

As in previous years, the results ranged from first-class to poor failures. In general the standard of written English has improved, although in too many instances legibility was a problem. Candidates are encouraged to practise their written English throughout the year and should note (as is stated on the front of the examination paper) that accuracy, clarity and legibility are important.

Having 15 minutes reading time this year should have made the task of selecting questions and planning answers much easier. Candidates who used this time effectively were able to devote the maximum time to presenting their answers.

There remain a number of common problems. First, too many candidates simply did not have sufficient knowledge to pass. It is rarely possible to do justice to a question in less than two sides of A4 paper and many of the best candidates offered double this amount. Second, there remain problems with time management, with some candidates failing because they had only offered two or three answers. It is essential that equal time be given to each question and that four complete answers be given. Third, while the best candidates made effective use of statutory sources and case law, too many weak candidates did not. In Public law there are (in comparison with some other subjects) relatively few major cases. Candidates must, however, be able to discuss them. Although it is not necessary to provide the full citation, the correct name of the case and its date should be provided. Finally, there remains the problem of candidates offering a pre-learned answer, with or without minor adjustments to attempt to make the answer ‘fit’ the question. This can never produce more than a bare pass, if that. Rote-learned answers give no indication of a candidate’s knowledge or understanding. Too often Examiners find that a tutor has given candidates incorrect information or that the information has been incorrectly interpreted and that, relying on this information rather than the subject guide and textbook, candidates all repeat the same error in the examination. Tutors and candidates must understand that rote-learning is not academically acceptable and that it lets candidates down in examinations.

Question 1

‘The rule of law enforced by the courts is the ultimate controlling factor on
which our constitution is based.’ (Lord Hope of Craighead in Jackson v Attorney General (2006))

Discuss.


This question was popular with candidates and produced many interesting and good answers. The best answers started with an introduction explaining briefly that there are several different philosophical interpretations of the rule of law and then focusing on A.V. Dicey’s three-part analysis. At this point it would have been useful to explain the uncodified nature of the United Kingdom ’s constitution before moving on to analyse the quotation given.

Having offered a brief introduction, there were then many different ways of approaching this broad question. There were some very good answers which concentrated on the judges’ role in interpreting statutes and developing the common law. Many candidates discussed cases, such as Entick v Carrington (1765), in support of the judges’ concern to protect individual rights against the power of the state. The Human Rights Act 1998, and the manner in which the judges have used it to further the protection of rights, was also relevant. However, as the best answers revealed, there are limitations on what judges can achieve. Relevant here was a discussion of parliamentary supremacy and the duty of the judges to interpret Parliament’s will: where Parliament grants broad powers to the authorities there is little judges can do. Further, under common law, as the much-cited case Malone v Metropolitan Police Commissioner revealed, where there is no domestic law protecting ‘rights’ the courts will refuse to provide that protection (resulting, in Malone’s case, in an application to the Court of Human Rights which led to a change in the law). It was important also to recognise the limitations of the Human Rights Act 1998. As the best candidates pointed out, although there is much that judges can do, the Act has been carefully drafted to ensure that statutes are protected from invalidation by the judiciary, leaving it to Parliament to correct any law which is incompatible with ECHR rights. A brief conclusion was needed. A balanced conclusion explained that, while the rule of law was an important concept under the British constitution, it was an exaggeration to say that it was the ‘controlling factor’.

Question 2

In what respects, if any, has A.V. Dicey’s exposition of parliamentary sovereignty become an anachronism?


This popular question was generally well answered. A brief introduction explaining the constitutional need for an ultimate source of authority within a state was required. This then led to a brief explanation of the evolution of the United Kingdom ’s constitution and the establishment of parliamentary supremacy in the seventeenth century. The distinction between political and legal sovereignty could
also be discussed at this stage. As the question is focused on Dicey’s analysis it was necessary to set out his three main points and then to analyse each, making reference to illustrative statutory sources and case law. The majority of candidates had little difficulty in explaining Parliament’s power to pass legislation on any subject matter whatsoever. The third aspect of Dicey’s analysis – that the validity of Acts of Parliament cannot be called into question in a court of law – was also handled well.

The second aspect, however, did cause a number of problems. The best candidates were able to point out that the inability of Parliament to bind its successors, or be bound by its predecessors, was reflected in the judges’ use of the doctrine of implied repeal. However, there are a number of challenges which have been made to this principle and these also required discussion. Among the relevant issues which could and should have been discussed were:

• • the Acts of Union with Scotland and Ireland
• • manner and form and redefinition theories
• • membership of the European Union
• • devolution to Northern Ireland , Scotland and Wales
• • the Human Rights Act 1998.

While the best candidates were able to discuss most of these issues, the weakest candidates confined their discussion to setting out Dicey’s main points and then discussing the European Union and the Factortame case. This was rarely sufficient for a pass.


Question 3

The Constitutional Renewal Bill 2008 provides, in part, that the powers relating to war, the disposition of the armed forces and the ratification of treaties should be transferred from the royal prerogative to Parliament. Critically assess this proposal with particular reference to the separation of powers.



This question produced some exceptionally good answers and a large number of very poor answers. A number of different approaches could have been taken to this question. One good starting point would have been to explain briefly the uncodified nature of the United Kingdom constitution and its sources, legal and non-legal. This would then lead to a discussion of the royal prerogative as one of the common law sources. It should have been explained that these powers are residual and continue to exist because Parliament allows them to. Attention could then be turned to the consequences of transferring the powers from the executive to Parliament. In order to do this as required by the question, a brief introduction to the separation of powers under the UK constitution was needed, focusing particularly on the relationship between the executive and legislature and the constitutional position of the judiciary (independence, Act of Settlement). A brief discussion of parliamentary procedures which facilitate scrutiny of the executive could then be undertaken. As many of the best answers revealed, there are a number of issues which ministers conventionally refuse to answer questions about in Parliament. Furthermore, in relation to scrutiny by the judiciary through judicial review proceedings, it should have been explained that the concept of justiciability, developed and maintained by the judges, is designed to keep judges from ruling on matters best left to the executive.

In terms of controlling the exercise of these prerogatives, therefore, the question arises as to whether transferring these powers to Parliament would in fact make any difference. Opinions were very divided as to whether this was a sound proposal. Those who agreed with it did so largely on the basis that in a democracy having such important powers reserved to the executive was wrong. Those against relied largely on the need for there to be some reserve powers left to the executive, especially in relation to war and peace. That conclusion caused many candidates to favour the transfer of treaty-making power to Parliament, but not powers relating to war and the armed forces.

Question 4

How does United Kingdom law achieve a ‘level playing field’ between rival
candidates and political parties with respect to parliamentary election campaigns?


In general this question produced some very good answers. To achieve the highest marks possible it was necessary to cover several aspects of electoral law. Issues which should have been discussed, together with the relevant statutory sources and case law, were:

 constituency sizes to ensure approximate equality in the number of voters and the exceptions to the equality principle which result in considerable variations in the number of voters per constituency
 the franchise and those disqualified or ineligible to vote and statutory reforms resulting in a more inclusive electoral register
 the legal rules relating to candidates’ expenditure, criminal offences and the issue of participation in broadcasts in general election campaigns
 the registration of political parties
 the regulation of spending at national level by political parties (and the question of whether state funding should be provided)
 the voting system, its advantages and disadvantages.

The strongest candidates were able to discuss each of these issues and to indicate the relevant statutory provisions and case law. When citing statutory provisions it is unnecessary to copy out sections: this wastes time and detracts from the quality of the discussion. Too many candidates unfortunately did not cover all the necessary areas of this topic. It was not sufficient for a pass simply to focus on either party political funding or the voting system.


Question 5

‘The integration into the laws of each Member State of provisions which derive from the Community and more generally the terms and the spirit of the Treaty, make it impossible for the states, as a corollary, to accord precedence to a unilateral and subsequent measure over a legal system accepted by them on a basis of reciprocity.’ (Costa v ENEL (1964) European Court of Justice)

Discuss with particular reference to the techniques adopted by the European Court of Justice to ensure the uniform application of Community law over domestic law.


This question was not popular but did produce some very good answers. By way of introduction it was helpful to explain the origins of the European Community (now Union ) and its objectives. A brief explanation could then be given of the view of the European Court of Justice (ECJ) that Community law is, and must be, supreme over the domestic law of Member States.

A good answer would then briefly discuss the primary and secondary sources of Community law – principally Treaty Articles, Regulations and Directives – and explain the difference between the sources. This led to a discussion of direct applicability and direct effect and in turn to indirect effect and state liability. In relation to each of these aspects of the question, it was essential to discuss the case law of the ECJ.

Given the wording of the question, candidates were not required to discuss in detail the European Communities Act 1972 or the domestic case law demonstrating how the English courts deal with the issue of supremacy. Where candidates focused on this issue – at the expense of discussing the techniques of the ECJ – they failed. In relation to weaker or poorly-prepared candidates, this question is a good example of how candidates can interpret a question incorrectly to enable them to offer an answer which has been prepared previously, rather than answer the question on the examination paper.


Question 6

‘Provided that there is adequate legal regulation of special powers given to
state agencies when the security of the state is under threat from terrorism, the limitation of citizen’s rights and freedoms is justified.’

Discuss with particular reference to statute and case law.


This question was not attempted by many candidates, and those who did attempt it did so with very variable results. The strongest candidates were able to explain the relevant agencies – MI5, MI6, GCHQ and the police – and their role. They were also able to explain the former lack of statutory regulation and the development of a statutory framework (Security Services Act 1989, Intelligence Services Act 1994, Regulation of Investigatory Powers Act 2000).

In addition it was necessary to discuss the Terrorism Acts and the powers they gave. The ability of the state to derogate from ECHR rights in times of emergency was also relevant. The important case of A v Secretary of State for the Home Department (2004) should have been discussed to illustrate the impact of the Human Rights Act 1998 on the power of the state to restrict the liberty of suspects and to derogate from Convention rights in response to threats of terrorism. This question produced too many answers which were completely irrelevant to the question. This emphasises the point that candidates must use reading time effectively to ensure that they have correctly interpreted the question.


Question 7

By reference to case law, discuss the status and effect of the European
Convention on Human Rights in UK domestic law


This was a popular question and produced a high proportion of very good answers. By way of introduction, it could have been explained that the European Convention on Human Rights was drafted under the authority of the Council of Europe (not the European Community or Union ). A brief discussion of its main features was helpful – in particular that it covers civil and political (rather than economic and/or social) rights.

The British government’s position before 1997 required brief discussion, as did the legal consequences – namely that Convention rights were not enforceable in the domestic courts and that aggrieved individuals had to exhaust all domestic remedies and then pursue an application in Strasbourg. Mention should also have been made of the approach of the courts, illustrated by case law, to the Convention prior to the Human Rights Act 1998.

It was important that the structure of the Human Rights Act 1998 be discussed. This did not entail copying out sections from the statute book. What was required was a selective and critical discussion of the relevant sections, in particular ss.2, 3, 4, 6 and 8 in relation to the powers conferred on the judiciary and ss.10 and 19 in relation to the executive and Parliament. Such an analysis would have led to the conclusion that the Act carefully preserves parliamentary supremacy by ensuring that the judiciary does not question the validity of Acts of Parliament.
The strongest candidates were able also to discuss some of the more important cases which have been decided since the Human Rights Act came into effect, especially those which have led to changes in the law.

Question 8

Within the context of judicial review and with reference to case law, explain the legal definitions of (a) sufficient interest, and (b) public bodies.



A popular question which produced a high proportion of very good answers. A good introduction would have explained the role and purpose of judicial review. It would have explained its constitutional importance in ensuring that state agencies keep within the powers granted by statute and comply with the requirements of reasonableness, natural justice, fairness and proportionality. Having set the scene, it was then necessary to focus on the legal definitions of both sufficient interest and public bodies. This was where the difference lay between those achieving high marks and those who failed. The strongest candidates offered a detailed analysis of the case law on sufficient interest, being able to explain the need to limit the ability of individuals or groups to interrupt the administrative process by challenging the use of power. Many rightly discussed the case law relating to individual applicants, representative bodies and pressure groups applying for judicial review in the public interest.

Equally, with the definition of public bodies, the best answers explained that, as there is no fixed definition of the term public bodies in relation to judicial review proceedings, it is necessary to analyse the case law to understand its meaning and scope.

Candidates who failed generally did so because, rather than answer the question on the examination paper, they chose to write all they knew about judicial review, with sufficient interest and public bodies getting no more than a brief mention. These were clearly answers which had been prepared previously. They did not therefore answer the question and could not pass.

ZONE B

Question 1

‘The rule of law enforced by the courts is the ultimate controlling factor on
which our constitution is based.’ (Lord Hope of Craighead in Jackson v Attorney General (2006))
Discuss.


Same as Question 1, Zone A

Question 2

In what respects, if any, has A.V. Dicey’s exposition of parliamentary
sovereignty become an anachronism?

Same as Question 2, Zone A

Question 3

The government’s latest constitutional reform proposals raise the possibility of the adoption of a written constitution. Giving reasons, consider the view that such a development is both essential and inevitable.


This question produced some exceptionally good answers and a large number of very poor answers. A number of different approaches could have been taken to this question. One good starting point would have been to explain briefly the historical reasons that the United Kingdom ’s constitution remains uncodified, together with an explanation of its sources, both legal and non-legal. A brief comparison with a written constitution was offered by many candidates.

A discussion of some of the uncertainties which exist under the British constitution – which in turn suggest that a written constitution might be desirable – was necessary. A range of different issues could have been critically discussed at this point. Among these are:

 the ill-defined concept of the separation of powers
 the dominance of an executive with a strong electoral majority
 the theoretical unlimited legislative powers of Parliament
 the unelected House of Lords
 uncertainties surrounding the scope of the royal prerogative and its exercise by the executive in the name of the Crown rather than Parliament
 the importance and uncertainties surrounding many constitutional conventions (the dissolution of Parliament and ministerial responsibility being prime examples)
 the traditional concept of civil liberties as opposed to constitutionally-guaranteed human rights.

A brief discussion of the range of constitutional reforms which have been undertaken since 1997 was needed to show how the government has proceeded in a piecemeal manner to achieve considerable constitutional change, seemingly without considering the impact of the changes on the constitution as a whole.

It was also necessary to address whether a written constitution was ‘both essential and inevitable’. Many candidates argued persuasively that the United Kingdom constitution functions adequately and did not require further reform. Others took the view that further reform was necessary, although not by any means inevitable. What was required, irrespective of the conclusion reached, was that the issue be addressed. Too many of the poorer answers simply ignored this aspect of the question.

Question 4

Discuss whether the House of Lords has sufficient powers in law to fulfil its constitutional role as the parliamentary second chamber.


This question on the House of Lords was popular but produced a high proportion of very poor answers. The main difficulty identified by the Examiners was that too many candidates had relied on there being a question on the House of Lords which focused on reform of its composition. Not finding the anticipated question, a large number of candidates decided that they would nevertheless offer their pre-prepared answer on that aspect of the topic rather than attempt to answer the question on the examination paper. Not surprisingly they failed badly. A general introduction could have explained the history of the House of Lords and its links with monarchy and the hereditary principle. The best candidates were able to offer a brief introduction explaining the role and powers of the House of Lords. It should have been pointed out that prior to 1911 the powers of the two Houses were legally equal, but regulated by convention. The all-important Parliament Acts 1911 and 1949 could then be discussed. Also relevant was the low usage of the Parliament Acts and the conventions and practices which explain this. The best candidates then turned their attention to the government’s intention to reform the composition of the House of Lords and briefly discussed the House of Lords Act 1999. The issue of composition does of course have a bearing on the appropriate powers the House should have – not least because it would be undemocratic to have an unelected second chamber with powers to defeat the wishes of the democratically-elected House of Commons. What also required discussion was whether an elected or part-elected, part-appointed House of Lords would continue to accept the restrictions of the Parliament Acts. Here the government’s intention to achieve a second chamber which would complement the Commons rather than rival it was relevant.

Finally a conclusion was needed. Many candidates pointed out that the current House of Lords, albeit undemocratic, fulfils its function well and that further reform might introduce more problems than it would solve by either producing a rival to the Commons or simply replicating it.

Question 5

How does United Kingdom law achieve a ‘level playing field’ between rival
candidates and political parties with respect to parliamentary election campaigns?


In general this question produced some very good answers. To achieve the highest marks possible it was necessary to cover several aspects of electoral law. Issues which should have been discussed, together with the relevant statutory sources and case law, were: • constituency sizes to ensure approximate equality in the number of voters and the exceptions to the equality principle which result in a considerable variation in the number of voters per constituency

 the franchise and those disqualified or ineligible to vote and statutory reforms resulting in a more inclusive electoral register
 the legal rules relating to candidates’ expenditure, criminal offences and the issue of participation in broadcasts in general election campaigns
 the registration of political parties and the requirement to disclose donations under the Political Parties, Elections and Referendums Act 2000
 the regulation of spending at national level by political parties (and the question of whether state funding should be provided)
 the voting system, its advantages and disadvantages.

The strongest candidates were able to discuss each of these issues and to indicate the relevant statutory provisions and case law. When citing statutory provisions it is unnecessary to copy out sections: this wastes time and detracts from the quality of the discussion.

Too many candidates, unfortunately, did not cover all the necessary areas of this topic. It was not sufficient for a pass simply to focus on either party political funding or the voting system.

Question 6

With reference to statute and case law, consider the extent to which English law achieves an appropriate balance between the freedom to demonstrate and the maintenance of public order.



This question was not popular and, although there were some very good answers, there were a high proportion of failures caused by candidates having insufficient knowledge of the law. One good starting point would have been to explain the traditional British approach to civil liberties – namely that conduct is allowed which is not prohibited by law. The constitutional importance of freedom to demonstrate and its related concept of freedom of expression required discussion, as did the potentially competing concept of public order.

Having offered a balanced introduction, there should then have been a discussion of the public order Acts, with particular reference to the requirements of notice and the powers of the police to impose conditions and, in the most extreme cases, ban a procession which was likely to lead to civil unrest or violence.

The impact of the Human Rights Act 1998 should also have been discussed, Articles 10 and 11 being the relevant ECHR provisions. It should have been noted that both Articles provide for legitimate restrictions on the exercise of the freedom of expression, association and assembly – the requirements of public order being one of them.

The strongest and most knowledgeable candidates were able to discuss the case law. In addition to cases decided under provisions of the ECHR, cases involving obstruction of the police, obstruction of the highway and the concept of breach of the peace should have been discussed with a view to assessing ‘the appropriate balance’ between freedom to demonstrate and the maintenance of public order.

Question 7

By reference to recent case law, discuss the status and effect of the European Convention on Human Rights in UK domestic law.


Same as Question 8, Zone A


Question 8

Within the context of judicial review and with reference to case law, explain the legal definitions of (a) sufficient interest, and (b) public bodies.


Same as Question 8, Zone A

EXAMINER’S REPORT – LAW OF TORT

Zone A

General remarks


The majority of candidates demonstrated a satisfactory knowledge of the main topics. The single most prevalent fault was not to address the question sufficiently closely. In particular many candidates discussed issues that were not really raised by the facts of the problem or at least set out in unnecessary detail the relevant law on points where the answer was not in doubt. At best this took up valuable time which
should have been devoted to topics where there was real doubt as to the answer. At worst such answers may give the impression that the candidate is not sure what the question is about and covers the whole ground in the hope that the right arguments are included. These problems were particularly prevalent in questions 2, 3 and 8 and the lengthier comments on those questions include illustrations of both matters that were treated at unnecessary length and those that good candidates explored in greater depth. Good answers demonstrate an ability to wrestle with issues where there is much to be said on both sides and the answer is in doubt. How could the courts be persuaded to distinguish an inconvenient precedent? How would a court interpret a particular statutory provision? Might the House of Lords be persuaded to overrule a decision that was adverse to the case the candidate wanted to present?


Question 1

Critically examine the concept of ‘assumption of responsibility’ as the basis
of liability in negligence.



It is essential in answering a question such as this to concentrate on the topic asked: assumption of responsibility. There should not be a general summary of the ingredients of the tort of negligence. Of course the discussion must be put into context and this includes a comparison with other tests for establishing the existence of a duty of care. A surprising feature of the answers was that so few candidates discussed Commissioners of Customs and Excise v Barclays Bank, one of the few cases where the relationship between the principal tests was considered in detail. A good answer would have explained the nature of the test, the contexts in which it was most useful (economic loss, omissions, misstatements), whether the ‘assumption’ was to be tested subjectively or objectively and the disadvantages of the test.


Question 2

Liam and Shane had been to a party where they had both taken illegal drugs. Liam drove them home in his car. After they had gone several miles without incident, Liam drove out of a side street and collided with a bicycle ridden by Theo. Theo was wearing dark clothing and his bicycle had no lights. Shane got out of the car and ran to assist Theo. He was struck by a car being driven by Ursula some 10 miles per hour faster than the permitted speed limit. Theo suffered a broken arm in the original collision, but has made a good recovery. Shane was taken to the accident and emergency department at the Feelgood Hospital, where he was examined by Vernon, a junior casualty nurse, who sent him home. In fact Shane had suffered serious internal injuries and died a week later after several days of great pain. He left no dependants.

Advise Theo and Shane’s estate.


This problem involves a number of parties and a number of torts. It is particularly important therefore to be clear, before starting to write, what is the most logical order to proceed in (there is no one right answer to this) and which issues require the most detailed consideration. One solution is to get Theo’s claim out of the way first.

His only action could be a straightforward negligence claim against Liam. Notice that Liam may have taken illegal drugs but that is not in itself a tort. The question will be whether his driving fell short of the standard expected of a reasonable driver. If it did, that may have been because of the influence of drugs. If it did not, the fact that he was drugged at the time does not make it negligent. In relation to Theo, the issues of existence of duty, causation and remoteness required only a brief discussion, since they are so clearly satisfied. Liam may argue that Theo was contributorily negligent.

Shane’s claim is much more complex. First, candidates must consider the claim for his initial injuries. He might have a claim against:

(i) Ursula if she were in breach of a duty of care – there is no action for breach of statutory duty in exceeding the speed limit; it may be evidence of negligence but is not necessarily negligent
(ii) Theo, if his manner of riding were a breach of duty of care to other road users
(iii) Liam, in respect of whom it is necessary to consider defences available in cases of drunk/drugged drivers and willing passengers.

If one or more of these defendants is liable, they have clearly caused foreseeable injuries. What is the effect of Vernon ’s actions? If Vernon was not negligent in his assessment of Shane’s condition or if his negligence was not causally relevant (i.e. if Shane would have died even if Vernon had not sent him home without treatment) then Vernon is not liable and the original tortfeasors will be liable for his death. But Vernon may have been in breach of the appropriate standard of care from nurses (and, since he is clearly an employee in the course of employment, the hospital would be vicariously liable). Vernon ’s duty was to take reasonable care to cure Shane. Could the original defendants claim that his failure to do so was an intervening act
terminating their liability beyond the point at which (if properly treated) he would have recovered from his original injuries?


Question 3

Gavin is a student at the University of Dumbsville . He lives in one of the halls of residence and knows that under University regulations no one other than a registered student or a member of his or her immediate family is allowed into the residences at any time. One morning Gavin takes his girl friend Hilda back to his hall of residence. The cleaning of the hall is undertaken by Swiftwipe Ltd under contract with the University. When Gavin and Hildaarrive, they see a notice at the foot of Staircase A reading: “Swiftwipe Ltd.
Cleaning in progress. Slippery floor. Please use other staircase.” At the foot of Staircase B they see the same notice and conclude that it must have been left by mistake. They go up Staircase B. Hilda slips on a patch of soapy liquid and drops her expensive mobile phone. Gavin tries to catch her but falls and breaks his arm. Hilda’s phone is destroyed.

Advise Gavin and Hilda.


Gavins’s claim will lie under the Occupiers’ Liability Act 1957 against the university, and possibly against Swiftwipe (if their control was so extensive that they can be regarded as occupiers), or in common law negligence against Swiftwipe. Gavin was an adult student taking his girlfriend up to his university room. He was not a ten-year-old boy climbing a step-ladder so that he could reach the chimney he was going to sweep. [Nineteenth-century social reformers abolished child labour in England .] Therefore there was absolutely no reason to write that premises included movable structures such as ladders, that occupiers should expect children to be less careful than adults or that trade visitors could guard against risks ordinarily incidental to their jobs. The main issues to be considered were (against both defendants) the confusing warnings (s.2(4)(a)) and (against the university) independent contractors (s.2(4)(b)). Hilda appears to be a trespasser: her roblem is that her only loss is physical damage to her property which is expressly excluded by the Occupiers’ Liability Act 1984. So how could her claim be framed? Good answers explored a number of alternatives: that Hilda was ignorant of the ban on friends and couldassume that Gavin had authority to invite her to his room, or that it was common practice for students to do so and the university had taken no effective steps to prevent this, and therefore she was a lawful visitor; or that she could sue Swiftwipe in common law negligence where her status as a trespasser would not be relevant.

Question 4

Jessica is a patient at the Brightnew Hospital . As she is not responding to conventional treatment for her condition, her consultant, Karen, suggests that they try a new drug. Karen knows that there is some possibility from early trials that this can lead to depression, but decides not to warn her of this. Jessica agrees to the treatment. She appears to be responding well physically but, a week after the treatment started, she left the ward unobserved, climbed to the roof of the building and jumped to the ground. She suffered serious injuries and was taken to the emergency ward. Her mother Loraine was summoned but, when she arrived two hours later, she was told that Jessica had just died. Loraine suffered a severe psychiatric reaction. Medical experts are unable to say whether the new drug caused Jessica to commit suicide.

Advise Loraine on her own and Jessica’s behalf.


As a general rule candidates have a considerable discretion as to how they structure their answers, but there must be some logic to it. It was certainly wrong to discuss the issue of, and cases about, psychiatric injury before any breach of duty had been established. Psychiatric damage is a head of damage which may be available once the tort has been established. So was Karen (and the hospital vicariously) liable for Jessica’s death? Candidates were in general familiar with the relevant law on the scope of a hospital’s duty to warn of risks attaching to treatment. They also saw that causation was an important problem. There are in fact two different causation problems, which raise different arguments: (i) would Jessica have agreed to the treatment if she had been warned of the risks? (ii) Did the drug in fact cause her to kill herself? The latter problem is caused by the unavailability of scientific evidence, but it is a very different situation from that in the Fairchild case where the House of Lords relaxed the ‘but for’ requirements in order to do justice. Good candidates also onsidered an alternative line of reasoning which avoided these problems. Should the hospital, knowing of the risk of depression, have ensured that Jessica was monitored continuously? If they were in breach of that duty, the causation problem largely disappears (although of course she might have escaped even if she was supervised). Only once liability is established, can the question of whether Loraine can recover for her psychiatric injury be addressed. On the whole this was well done, candidates considering whether there was sufficient proximity for her to qualify as a secondary victim.

Question 5

Shoddy Industries have a factory located in an area of low cost local authority housing. Because of increased demand for their products they have had to extend their working hours. Thick fumes from the factory often blow across the estate and residents find that they have to keep their windows closed. Two children living on the estate suffer from asthma and their condition has deteriorated. Residents have started displaying banners denouncing Shoddy Industries and shouting abuse through loudhailers. In order to protect their workers Shoddy Industries have erected a giant screen between their factory and the estate. As a result many residents are now unable to use their sophisticated mobile phones and some are unable to gain access to the internet.


Discuss any possible claims in nuisance.

This question entailed the discussion of three possible nuisance claims. Two of them involve Shoddy Industries as defendant. These permit exploration of a number of issues including: whether residents in lowcost public housing can expect less comfort than those in wealthier areas; whether any claim in respect of the asthmatic children can be built into a nuisance action given that the children themselves are precluded from suing (a surprising number of candidates find it difficult to accept that Khorasandjian v Bush was overruled) and whether asthmatic children are unduly sensitive; whether nowadays interference with mobile phones and the internet can amount to a nuisance. Then there is the question of whether Shoddy Industries could take legal action against the protestors, or against the local authority as landlords for apparently failing to take action in respect of the actions of their tenants.

Question 6

Cerberus Securities Ltd recruit, train and supply security guards to protect
premises. The guards wear jackets with the words “Cerberus Security” sewn on the back and use specialist equipment supplied by Cerberus Securities, but the companies where they are working pay them and instruct them as to the duties they are to carry out on any given day. Archie and Bernie were sent to work at Hydra Industries plc as security guards. Archie had particularly asked for this assignment, because, he said, his disabled mother lived near their factory. In fact he had a grudge against Hydra Industries because his girl friend Connie, who had worked there for a few months, had been sacked after she had rejected the sexual advances of her line manager Dipak, who had then submitted a critical report on her work. Guards are instructed always to patrol in pairs, but Bernie, who is Archie’s supervisor, is a heavy smoker and Archie often agreed to let him go outside for a cigarette and continued the rounds on his own. One evening, while Bernie was outside, Archie came upon Dipak working late and alone in his office. He confronted Dipak and seized his jacket by the lapels, pushing him backwards. Dipak fell over his chair and hit his head on a filing cabinet. He has suffered permanent brain damage.

Advise Dipak.


The most obvious way in which Dipak could organise his claim is to hold his employer vicariously liable for Archie’s tort. There is no real doubt that Archie has committed the tort of battery and has no defence to an action. He is certainly himself an employee and not an independent contractor. But who is his employer and was he in the course of employment at the time? If Cerberus Securities had had a contract as independent contractors to organise and run the security for Hydra Industries, then Archie would be their employee. If Cerberus Securities were something like a recruitment agency supplying security guards, he would probably become an employee of Hydra Industries. In the present case the facts fell between these two extremes and candidates had to form a judgment on the facts before them, making use of cases on borrowed servants and on the more recent Viasystems case, which permits but does not require both parties to be treated as an employer. Archie attacked Dipak because of a personal grudge and the traditional ‘course of employment’ test would probably mean that the employer was not vicariously liable. Good answers would then explore the implications of Lister v Hesley Hall and subsequent cases and analyse the relationship and role of Archie in the light of those authorities.

A number of candidates correctly explored other ways in which a claim could be formulated. One is to hold the employer liable for a possible tort by Bernie on the basis that his failure to patrol in pairs foreseeably led to the attack on Dipak. But the rule was probably formulated for the protection of the security guards and not of the staff of client companies. A second is that Cerberus, whether or not they were the employers of the guards, were negligent in their assessment of Archie. All that can be done in an answer is to argue that, if Cerberus Securities had inadequate vetting procedures or if a reasonable company would have identified Archie as an unacceptable risk, then they might be liable. A third possible claim is that Hydra Industries, as employers of Dipak, were in breach of their non-delegable duty of care.



Question 7

“This whole area of economic tort has been plagued by uncertainty for far too long. Your Lordships now have the opportunity to give it a coherentshape. This surely is an opportunity to be taken.” (OBG Ltd v Allan (2007), per Lord Brown of Eaton-under-Heywood).
Discuss.


This question is about the so-called economic torts, i.e. liability for intentionally inflicted economic loss. The House of Lords took the opportunity in the OBG case to explore the history of these torts. A good answer should have covered the state of the law preceding this case (as fully described in the speeches) and a description and analysis of the new structure formulated by the House and the reasons for it. Many candidates treated this as a question on economic loss and wrote mainly about negligent infliction of economic loss. This should not have happened. Firstly, students should always know what topics, if any, they have omitted from their revision and roughly what they are about so that they do not inadvertently answer a question on something they have not studied. Secondly, the Recent developments material contained a summary of the case and its conclusions. Thirdly, and most importantly, if this was really a case in which the House of Lords seized the opportunity to give the law of economic loss a coherent shape, it would be astonishing if the attention of candidates had never been drawn to it. Candidates who wrote on economic loss did not discuss the case at all. If this really had been a major new case restructuring economic loss, candidates who answered the question without discussing what it decided would inevitably have failed.

Question 8

Clarissa and Edwina are rival candidates for the presidency of the Students’ Union at Dumbdown University . Clarissa is campaigning on a platform that includes support for animal rights, such as stopping all university investment in companies that carry out animal testing. Edwina held a well-advertised meeting in a lecture hall at the University which she knew would be attended by Grace, a reporter from the student newspaper, the Foghorn. Edwina told the meeting that Clarissa did not practise herself what she wanted for others. “I am told,” she said, “by reliable sources that she does not live by her own beliefs. She took a vacation job with a company that tests on animals, and she has been seen at greyhound racing events.” Grace wrote a report for the Foghorn in which she reported Edwina’s comments and continued, “Edwina is irresponsible. She levelled wild accusations against a fellow candidate without any evidence to back up her claims. Her conduct is utterly disgraceful.” In fact Clarissa had worked at the company and visited greyhound racing to help her compile information for an animal rights organisation: her report is accessible on their website.


Discuss any defamation claims arising.


This proved a very good problem for illustrating some frequent deficiencies and failures of technique. There are two principal claims: that by Clarissa against Edwina and that by Edwina against Grace or, more realistically, the publishers of the Foghorn. [There is at first sight a possible third claim by Clarissa against the Foghorn, which appears to have repeated Edwina’s criticisms of her. In fact the Foghorn distanced itself from those accusations and suggested that they were ill-founded and so did not “repeat” the libel.] There were two different ways in which candidates tended to order the material. Some went through the various elements of defamation and the defences, discussing both claims together in respect of each of these items. Others completed the discussion of Clarissa’s claim and then discussed Edwina’s claim. Neither of these approaches is ‘right’ or ’wrong’ and each has advantages and disadvantages. The important thing is to plan in advance how the issues are to be ordered and stick to the plan. On balance the answers that dealt with each claim in turn were easier to follow, but there was a danger that material would be repeated.

When the structure of the answer has been decided, the next issue is the content of the answer. Candidates should ask themselves what issues have to be covered, which of these issues call for extended discussion and which can be dismissed briefly. It should then have been clear that the bulk of the answer had to be devoted to the defences because the basic elements were clearly satisfied. It is obvious that in both cases the statements referred to the claimants by name and were published to others, and that is all that need be said. It is quite wrong to write about the possibility of Edwina meaning a different Clarissa, for example. She did not intend to refer to another Clarissa and that was that. Furthermore the statements were defamatory on their face. Edwina expressly said that Clarissa was a hypocrite whose campaign theme was at variance with her true beliefs. If Edwina had merely stated that Clarissa worked for an animal-testing company but listeners knew that she was an animal rights campaigner, then there would have been a need to discuss innuendo. Here, having explained the definition of ’defamatory’, it was sufficient to say that there was no need to plead an innuendo as Edwina has expressly accused Clarissa of hypocrisy and such an accusation would certainly cause right-thinking people to think less well of her. Edwina’s original statement was a slander, but she might be liable, if the test in McManus v Beckham is satisfied, for libel in respect of the publication in the Foghorn.

Some poor answers here wasted time discussing all four forms of slander that are actionable without proof or damage. This was quite wrong: there was nothing about chaste women or contagious diseases in the problem. It was slightly better to refer to the only relevant category at common law and s.1 of the Defamation Act 1952, but only slightly where there was no explanation of how the Act might apply. A really good answer would also have explored the application of the section. Is the status of student an ‘office, profession, calling, trade or business’? Even if the union president holds an ‘office’, Clarissa was only a candidate at the time the words were spoken and not at that time an office-holder. Is that enough to invoke the section? The most important issues in this problem related to defences and the largest part of the answer should have been devoted to them. The defences of justification and fair comment go together. Most candidates appreciated that the sting of the defamation was the accusation of hypocrisy, which could not be shown to be true. Good answers would have explored the relationship between the two defences. A key question is whether the allegation of hypocrisy is a statement of fact (which would have to be proved true) or a statement of opinion (which would merely have to be shown to be fair). Perhaps the solution is to say that Edwina’s statement was that Clarissa had worked for money and had gone to greyhound racing for pleasure. This was not true and therefore not justified. Since the underlying facts were not true, then a defence of fair comment failed because the allegation of hypocrisy was founded on untrue facts. Justification and fair comment work much better in respect of Edwina’s claim against the Foghorn.

Next is the Reynolds-type defence of qualified privilege. Strangely most candidates discussed this in relation to Edwina’s claim but it works better in relation to Clarissa’s. The defence has been extended beyond journalism in the narrow sense. Had Edwina acted responsibly?

Younger people get information from the internet. Should she, before speaking, have ‘googled’ Clarissa + animal rights? She would have found the animal rights website with Clarissa’s report indicating that she had worked undercover at the animal testing company on behalf of the organisation. Finally a number of candidates referred to the defence of innocent dissemination under s.1 of the Defamation Act 1996. This was irrelevant: that defence applies only to mechanical distributors such as booksellers.


ZONE B



Question 1

“The ‘but for’ test is a useful guide, but it does not solve all causation
problems.”

Discuss.


There are two essentials in answering a question such as this. The first is that the answer is addressed solely to the topic of causation (apart from a very brief introduction putting the issue in context). There should not be a general summary of the ingredients of the tort of negligence. (Indeed, although most of the reported cases involved a negligence claim, causation is relevant in all torts in which proof of damage suffered is essential and not merely in negligence.) It was legitimate, though not essential, to include a brief mention of remoteness (or causation in law) indicating that, even though the ‘but for’ test is met, the claimant also has to satisfy whatever is the rule of remoteness of damage for the tort in question. It was certainly wrong to include a discussion of res ipsa loquitur. That maxim is a rule of evidence assisting in the proof of breach of duty not causation. The second requirement is that the answer should explain precisely why the ‘but for’ test was unsatisfactory in particular situations. For instance in discussing Fairchild v Glenhaven Funeral Services candidates must demonstrate that they understand precisely what the medical evidence could not prove. They must identify the crucial facts that justified the Lords’ decision and must explain what differences there were from the facts in the Wilsher and McGhee cases.

Question 2

Jason is an ice-cream salesman. At the end of the school day he parked his van on a busy street outside a school for children aged from 7 to 11. The hatch through which he sells his ice creams opens out to the pavement side of his van. Last week a number of children gathered round and jostled and pushed each other and two or three ran round the van to get to the head of the queue. Lucy, a learner driver accompanied by her father, a qualified driver, in his own car, was approaching the van. When she saw the children running, she panicked and swerved across the road. She mounted the opposite pavement and struck Toby, a cyclist, who was illegally riding on the pavement and was not wearing any form of head protection. Toby fell and struck his head. He was taken to the accident and emergency department of the Slumtown Hospital where Fiona, a junior nurse in casualty, examined him. She thought his injuries were not serious and sent him home. In fact he had suffered a serious brain injury and sustained permanent brain damage.

Advise Toby.


The answer should analyse (a) Toby’s claim for his initial injuries, (b) his claim for the failure by the hospital to identify the severity of his injuries and (c), if both claims are in principle successful, how the allocation of damages will be made. (a) Toby’s first claim will be in negligence against Lucy. A claim might also be made against Jason in negligence (or even public nuisance) or Lucy might seek to join Jason as a defendant, but the damage to Toby might be considered a rather remote consequence of Jason’s conduct. There is no doubt that Lucy owes a duty of care to other road users and that, if a motorist negligently knocks a cyclist off his bicycle, the initial head injuries are caused by the negligence and are not too remote. These things should have been explained only very briefly. There was no need at all for an extensive account of these concepts. A little fuller discussion was appropriate in relation to the standard of care and whether the duty had been broken. [Incidentally in England what Lucy and her father did was lawful. A learner driver with a provisional licence is permitted to drive on the ordinary roads and does not have to be accompanied by a professional instructor, only by a qualified driver. It seems that the law is different in some other countries, but candidates were not penalised if they discussed whether Lucy’s conduct was illegal apart from issues of negligence.] Lucy might then raise the defences of illegality and contributory negligence. By contrast with earlier issues this was frequently too briefly discussed. Was Toby’s behaviour so outrageous that it would be shocking if he were to receive Examination papers and Examiners’ reports 2008 any compensation for his injuries? Further, what was the connection between his behaviour and his injuries? The discussion of causation and remoteness in this question should have been directed not to whether Lucy’s negligence was causally relevant but rather to whether Toby’s illegality was causally relevant. (b) Candidates generally had no difficulty in discussing the standard of care to be shown by Fiona. It was obvious that, if Fiona were negligent, she was an employee acting in the course of employment and so the discussion of vicarious liability could be very short. Many candidates considered that Toby’s conduct could amount to contributory negligence in respect of Fiona’s claim as well as Lucy’s, but this seems doubtful. (c) The most difficult issue was the relation between the two claims. As between Lucy and Fiona, who will pay for what? Clearly, if Fiona was not negligent or her negligence was not causally relevant because Toby would have suffered the same serious injuries even if Fiona had treated him properly, then Lucy would be liable for all the damages and Fiona would not be liable at all. But what if Fiona were negligent and Toby would eventually have recovered completely if she had examined him properly? Many candidates ignored this issue. Others relied heavily on Baker v Willoughby and Jobling v Associated Dairies, but this is not a completely satisfactory analogy. Fiona’s job was to put right what Lucy had done. Associated Dairies could say, ‘Mr Jobling, even if we had not injured your back at work, you would still be unemployed today because of your entirely different spine disease.’ But Lucy could not say, ‘Toby, even if I had not knocked you off your bike, you would still have a permanent brain injury today because of Fiona’s negligence.’

The answer to the question is uncertain and candidates should have argued for what they thought the most appropriate allocation between the parties.

Question 3

Gavin is a student at the University of Dumbsville . He lives in one of the halls
of residence and knows that under University regulations no one other than a
registered student or a member of his or her immediate family is allowed into the residences at any time. One morning Gavin takes his girl friend Hilda back to his hall of residence. The cleaning of the hall is undertaken by Swiftwipe Ltd under contract with the University. When Gavin and Hilda arrive, they see a notice at the foot of Staircase A reading: “Swiftwipe Ltd. Cleaning in progress. Slippery floor. Please use other staircase.” At the foot of Staircase B they see the same notice and conclude that it must have been left by mistake. They go up Staircase B. Hilda slips on a patch of soapy liquid and drops her expensive mobile phone. Gavin tries to catch her but falls and breaks his arm. Hilda’s phone is destroyed.

Advise Gavin and Hilda.


Gavins’s claim will lie under the Occupiers’ Liability Act 1957 against the university, and possibly against Swiftwipe (if their control was so extensive that they can be regarded as occupiers), or in common law negligence against Swiftwipe. Gavin was an adult student taking his girlfriend up to his university room. He was not a ten-year-old boy climbing a step-ladder so that he could reach the chimney he was going to sweep. [Nineteenth-century social reformers abolished child labour in England .] Therefore there was absolutely no reason to write that premises included movable structures such as ladders, that occupiers should expect children to be less careful than adults or that trade visitors could guard against risks ordinarily incidental to their jobs. The main issues to be considered were (against both defendants) the confusing warnings (s.2(4)(a)) and (against the university) independent contractors (s.2(4)(b)). Hilda appears to be a trespasser: her problem is that her only loss is physical damage to her property which is expressly excluded by the Occupiers’ Liability Act 1984. So how could her claim be framed? Good answers explored a number of alternatives: that Hilda was ignorant of the ban on friends and could assume that Gavin had authority to invite her to his room, or that it was common practice for students to do so and the university had taken no effective steps to prevent this, and therefore she was a lawful visitor; or that she could sue Swiftwipe in common law negligence where her status as a trespasser would not be relevant.

Question 4

Foulside is a run-down inner city estate which has been experiencing very high levels of street crime, arson and other attacks on property. Residents have been very dissatisfied at the level of policing in the area and there have been discussions about establishing their own vigilante patrols or recruiting private security firms. At a public meeting the Chief Inspector of Police for the area in the presence of the Deputy Chief Constable for the county tried to reassure residents. She said, “You can be assured that we are treating your problems with the highest priority. We shall be doubling patrols in the area and we are supplying you with a special hot line number to call the police if there is any sign of trouble. We can have help with you within three minutes if you call that number.” Three weeks later in the early evening Maisie was visiting her neighbour Nora in Foulside. They heard a loud crash and Nora called the hotline number. It took her two minutes to get through and the police arrived fifteen minutes later. There had been no patrols in Foulside that evening. In the meantime Maisie had looked outside and saw that the crash had occurred when her flat had been broken into and a fire started inside. A fire engine arrived promptly but there had been considerable damage to the flat, her pet parrot had died and all her family photographs had been destroyed. Maisie has suffered a long-term psychiatric illness.

Advise Maisie.


Maisie will wish to sue for the damage to her property and for her psychiatric illness. The answer should have considered first whether there was any defendant who could be sued and then whether damages for psychiatric injury could be recovered. Psychiatric injury is a head of damage and not itself a tort. The tort has to be established first and then heads of damage considered. No doubt those who broke into her flat have committed a tort but they are not identified. The fire brigade responded promptly and is therefore not liable (even if it owed a duty). So what about the police? A good answer addressed first the general rule that the police do not owe a duty of care to individuals to Examination papers and Examiners’ reports 2008 prevent them from becoming victims of crime or to catch perpetrators. It would then consider whether these facts could be distinguished on the basis that the police had assumed responsibility to provide patrols and to respond promptly, that the community had relied on this and not taken their own measures to combat crime, or that Maisie had relied on the assurances and risked going out in the evening leaving her flat unoccupied. This gave the opportunity for a wide-ranging argumentative discussion of the concept of assumption of responsibility. The better view is probably that the police were not in breach of any duty of care because there was insufficient connection between Maisie individually and the police. But, if the police were in breach of a duty of care, would they be liable for the psychiatric injury?

This should have led to a discussion of the scope of the traditional categories of primary and secondary victims, of whether Attia v British Gas would be followed and, if so, how it could be fitted into the framework of liability.

Question 5

Thor Industries manufacture specialist military equipment at their factory, which is situated in a residential area. Because of the need to manufacture and test increased supplies to meet current military needs, they have often worked through the night, causing considerable noise and vibration. Faisal, the owner of a house nearby, is severely disabled but has been trained to use specialist electronic equipment to work at home dealing with enquiries from customers of National Savings. Testing of new products at the Thor factory sometimes interferes with this equipment and Faisal fears that he will not be able to carry on working. A large group of anti-war protestors has taken over a piece of land belonging to the local council, the Paxtown District Council, near the factory. They have been cooking food on the site, throwing rubbish into neighbouring gardens as well as shouting protests. The Paxtown Council is opposed to British military activities and has taken no steps to remove the protestors.

Advise as to any possible nuisance actions.


This problem involved two separate nuisance actions, mainly involving private nuisance although some discussion of public nuisance might be included. The first claim by affected residents in general and by Faisal in particular required a discussion of the various ways in which the competing interests of the residents and the factory could be accommodated. There is a particular difficulty to be explored in relation to Faisal as to whether the use of electronic equipment in general and his specialised equipment in particular is protected. This could be discussed in traditional terms as ‘sensitive user’ or in terms of reasonable foreseeability. A possible solution is that an injunction is granted restricting the times at which the factory may operate in a way that interferes with Faisal. The second claim is that by Thor Industries and by the neighbours in respect of the activities of the protestors. There is no doubt that the anti-war protestors are acting unlawfully – no doubt committing nuisance and certainly trespass to the neighbours whose garden they invade. The main question is, however, whether the council can be liable for their failure to control the activities of squatters on their land. Although a considerable number of answers included a discussion of the rule in Rylands v Fletcher, this seemed fruitless. The rubbish had not been accumulated on the site, certainly not for the benefit of the council, and it had not ‘escaped’.

Question 6

Cerberus Securities Ltd recruit, train and supply security guards to protect premises. The guards wear jackets with the words “Cerberus Security” sewn on the back and use specialist equipment supplied by Cerberus Securities, but the companies where they are working pay them and instruct them as to the duties they are to carry out on any given day. Archie and Bernie were sent to work at Hydra Industries plc as security guards. Archie had particularly asked for this assignment, because, he said, his disabled mother lived near their factory. In fact he had a grudge against Hydra Industries because his girl friend Connie, who had worked there for a few months, had been sacked after she had rejected the sexual advances of her line manager Dipak, who had then submitted a critical report on her work. Guards are instructed always to patrol in pairs, but Bernie, who is Archie’s supervisor, is a heavy smoker and Archie often agreed to let him go outside for a cigarette and continued the rounds on his own. One evening, while Bernie was outside, Archie came upon Dipak working late and alone in his office. He confronted Dipak and seized his jacket by the lapels, pushing him backwards. Dipak fell over his chair and hit his head on a filing cabinet. He has suffered permanent brain damage.

Advise Dipak.



The most obvious way in which Dipak could organise his claim is to hold his employer vicariously liable for Archie’s tort. There is no real doubt that Archie has committed the tort of battery and has no defence to an action. He is certainly himself an employee and not an independent contractor. But who is his employer and was he in the course of employment at the time? If Cerberus Securities had had a contract as independent contractors to organise and run the security for Hydra Industries, then Archie would be their employee. If Cerberus Securities were something like a recruitment agency supplying security guards, he would probably become an employee of Hydra Industries. In the present case the facts fell between these two extremes and candidates had to form a judgment on the facts before them, making use of cases on borrowed servants and on the more recent Viasystems case, which permits but does not require both parties to be treated as an employer. Archie attacked Dipak because of a personal grudge and the traditional ‘course of employment’ test would probably mean that the employer was not vicariously liable. Good answers would then explore the implications of Lister v Hesley Hall and subsequent cases and analyse the relationship and role of Archie in the light of those authorities.

A number of candidates correctly explored other ways in which a claim could be formulated. One is to hold the employer liable for a possible tort by Bernie on the basis that his failure to patrol in pairs foreseeably led to the attack on Dipak. But the rule was probably formulated for the protection of the security guards and not of the staff of client Examination papers and Examiners’ reports 2008 companies. A second is that Cerberus, whether or not they were the employers of the guards, were negligent in their assessment of Archie. All that can be done in an answer is to argue that, if Cerberus
Securities had inadequate vetting procedures or if a reasonable company would have identified Archie as an unacceptable risk, then they might be liable. A third possible claim is that Hydra Industries, as employers of Dipak, were in breach of their non-delegable duty of care.

Question 7

“The tort of intentionally inducing a breach of contract is essentially different from inflicting harm by unlawful means, although in some factual situations they may overlap.” (OBG Ltd v Allan (2007), per Lord Walker of Gestingthorpe).

Discuss.


In the OBG case the House of Lords took the opportunity to restate the law in relation to intentional economic torts. A good answer should have covered the state of the law preceding this case (as fully described in the speeches) and a description and analysis of the new structure formulated by the House and the reasons for it.

Question 8

Clarissa and Edwina are rival candidates for the presidency of the Students’ Union at Dumbdown University . Clarissa is campaigning on a platform that includes support for animal rights, such as stopping all university investment in companies that carry out animal testing. Edwina held a well-advertised meeting in a lecture hall at the University which she knew would be attended by Grace, a reporter from the student newspaper, the Foghorn. Edwina told the meeting that Clarissa did not practise herself what she wanted for others. “I am told,” she said, “by reliable sources that she does not live by her own beliefs. She took a vacation job with a company that tests on animals, and she has been seen at greyhound racing events.” Grace wrote a report for the Foghorn in which she reported Edwina’s comments and continued, “Edwina is irresponsible. She levelled wild accusations against a fellow candidate without any evidence to back up her claims. Her conduct is utterly disgraceful.” In fact Clarissa had worked at the company and visited greyhound racing to help her compile information for an animal rights organisation: her report is accessible on their website.

Discuss any defamation claims arising.


This proved a very good problem for illustrating some frequent deficiencies and failures of technique. There are two principal claims: that by Clarissa against Edwina and that by Edwina against Grace or, more realistically, the publishers of the Foghorn. [There is at first sight a possible third claim by Clarissa against the Foghorn, which appears to have repeated Edwina’s criticisms of her. In fact the Foghorn distanced itself from those accusations and suggested that they were ill-founded and so did not “repeat” the libel.] There were two different ways in which candidates tended to order the material. Some went through the various elements of defamation and the defences, discussing both claims together in respect of each of these items. Others completed the discussion of Clarissa’s claim and then discussed Edwina’s claim. Neither of these approaches is ‘right’ or ’wrong’ and each has advantages and disadvantages. The important thing is to plan in advance how the issues are to be ordered and stick to the plan. On balance the answers that dealt with each claim in turn were easier to follow, but there was a danger that material would be repeated.

When the structure of the answer has been decided, the next issue is he content of the answer. Candidates should ask themselves what issues have to be covered, which of these issues call for extended discussion and which can be dismissed briefly. It should then have been clear that the bulk of the answer had to be devoted to the defences because the basic elements were clearly satisfied. It is obvious that in both cases the statements referred to the claimants by name and were published to others, and that is all that need be said. It is quite wrong to write about the possibility of Edwina meaning a different Clarissa, for example. She did not intend to refer to another Clarissa and that was that. Furthermore the statements were defamatory on their face. Edwina expressly said that Clarissa was a hypocrite whose campaign theme was at variance with her true beliefs.

If Edwina had merely stated that Clarissa worked for an animal-testing company but listeners knew that she was an animal rights campaigner, then there would have been a need to discuss innuendo. Here, having explained the definition of ’defamatory’, it was sufficient to say that there was no need to plead an innuendo as Edwina has expressly accused Clarissa of hypocrisy and such an accusation would certainly cause right-thinking people to think less well of her. Edwina’s original statement was a slander, but she might be liable, if the test in McManus v Beckham is satisfied, for libel in respect of the publication in the Foghorn. Some poor answers here wasted time discussing all four forms of slander that are actionable without proof or damage. This was quite wrong: there was nothing about chaste women or contagious diseases in the problem. It was slightly better to refer to the only relevant category at common law and s.1 of the Defamation Act 1952, but only slightly where there was no explanation of how the Act might apply. A really good answer would also have explored the application of the section. Is the status of student an ‘office, profession, calling, trade or business’? Even if the union president holds an ‘office’, Clarissa was only a candidate at the time the words were spoken and not at that time an office-holder. Is that enough to invoke the section?

The most important issues in this problem related to defences and the largest part of the answer should have been devoted to them. The defences of justification and fair comment go together. Most candidates appreciated that the sting of the defamation was the accusation of hypocrisy, which could not be shown to be true. Good answers would have explored the relationship between the two defences. A key question is whether the allegation of hypocrisy is a statement of fact (which would have to be proved true) or a statement of opinion (which would merely have to be shown to be fair). Perhaps the solution is to say that Edwina’s statement was that Clarissa had worked for money and had gone to greyhound racing for pleasure. This was not true and therefore not justified. Since the underlying facts were not true, then a defence of fair comment failed because the allegation of hypocrisy was founded on untrue facts. Justification and fair comment work much better in respect of Edwina’s claim against the Foghorn.

Next is the Reynolds-type defence of qualified privilege. Strangely most candidates discussed this in relation to Edwina’s claim but it works better in relation to Clarissa’s. The defence has been extended beyond journalism in the narrow sense. Had Edwina acted responsibly? Younger people get information from the internet. Should she, before speaking, have ‘googled’ Clarissa + animal rights? She would have found the animal rights website with Clarissa’s report indicating that she had worked undercover at the animal testing company on behalf of the organisation. Finally a number of candidates referred to the defence of innocent dissemination under s.1 of the Defamation Act 1996. This was irrelevant: that defence applies only to mechanical distributors such as booksellers.


EXAMINER’S REPORT 2008 - LAW OF TRUSTS ZONE A

Introduction


As in past years, but even more noticeably this year, answers were marred by a reliance on prepared essays. This is dangerous for two reasons. First, the prepared answer will very likely not be an answer to the question asked. (And in this respect, candidates should note that Examiners are not fooled by a ‘top and tailed’ answer, where a paragraph at the start and another at the end are added to the prepared answer to make it seem relevant to the question. They have been around far too long to fall for that one.) Second, the prepared answers are usually prepared by people who themselves are poor lawyers. As a consequence, they are riddled with errors. By using them, candidates are not only failing to address the specific question asked, but providing answers which are often legally inaccurate. A further worrying feature was that candidates are obviously not using the subject guide provided by the University of London , preferring instead the rote answers mentioned above and lecture notes provided by private colleges. It cannot be stressed enough that the subject guide should always take precedence over all other material, for these guides are almost always written by the people who set and mark the exam. If candidates wish to know what the Examiner thinks and what the current areas of controversy in their subject are, then they should use the subject guide and the books it recommends. They should not rely
on any other material.

General remarks

One of the biggest problems revealed by the papers was a general lack of good exam technique. The study of law at degree level is not just about learning hundreds and hundreds of rules. It is also most importantly about applying those rules. To do that, candidates need to know the status of the rule, whether it formed part of the ratio of a decision or was only obiter, and the source of the rule – whether it is a rule of the House of Lords, Court of Appeal, High Court, and so on. Candidates need a critical eye, pointing out the difficulties in the rules laid down by the courts, even when they form part of the ratio of a decision, even one of the House of Lords. This is the stuff of a law degree. And not just that: it is the stuff of a good legal practitioner.

Specific comments on questions

Question 1

Jeremy is in a generous mood. He decides to set up a trust of the title to his house for Millicent. He completes a registered land transfer form, instructing the Chief Land Registrar to convey the title to Brian. He writes separately to Brian to inform him of the instructed transfer, and telling him that the title is o be held on trust for Millicent when received. Title is later transferred to Brian; several weeks later the letter from Jeremy is unfortunately eaten by Brian’s dog, Bonzo. Jeremy also instructs Tim and Tom, who hold a title to a valuable painting for Jeremy on trust, to make a gift of it to Millicent. This they do by delivering the painting to her. Finally, Jeremy orally instructs Karl and Keith, who hold some shares for him on trust, to hold them instead for Millicent. He writes to Millicent to tell her of this, but she carelessly loses the letter.

Jeremy has now died, leaving his entire estate to Penny. Advise her.

This was a classic ‘A conveys title to land to B to hold on trust for C’ problem, though with the twist that the declaration of trust was written rather than oral. A good answer would have noted that s.53(1)(b) LPA 1925 does not require the declaration of trust to be in writing, only ‘manifested and proved by some writing’. Thus, the issue is not one of validity, not one of formality for the ‘creation’ of a trust, as many of the books put it, but of proof. On the facts given, there was clearly a valid trust: the only question was whether Millicent could prove that to the court. Given that Bonzo had eaten what would appear to be the only admissible evidence of the declaration, the answer would seem to be that she could not. The question then was whether oral testimony (assuming there was some) could be admitted to prove Jeremy’s declaration under the Rochefoucauld doctrine. If not, the next question was whether a voluntary conveyance resulting trust arose in Jeremy’s favour (assuming, of course, that Millicent was outside the ‘presumption’ of advancement), or whether such a trust was abolished by s.60(3) LPA 1925. Alternatively, could Penny rely on Hodgson v Marks to argue for an automatic resulting trust in her favour? As to the title to the painting, this raised the question whether the reasoning in Vandervell applies, where title passes not by writing, as in that case, but delivery. Lord Upjohn’s speech is ambiguous on this point. Finally, the question of the shares raised the issue of the correctness of Grey v IRC.

A good answer would have discussed whether it could stand in the light of the purposive approach to s.53(1)(c) taken by the House of Lords in Vandervell. Though popular, this question was generally poorly done. Many candidates decided to reinvent the facts and say that Brian had never received the letter eaten by Bonzo. This is not stated in the question, though it is of course a possibility. But given that the letter was only eaten two weeks after being sent, the strong likelihood is that Brian had read it first. In any case, both fact scenarios should have been pursued. Others wrongly saw this as a question on secret trusts – the lesson here is not to assume that just because one of the actors dies, a secret trust is involved. Others still saw it as a question concerned with the constitution of trusts, but, as the facts show, no issue of constitution was involved. Nor was there any issue with the so-called ‘three certainties’, all being clearly present, subject only to the question of proof. Turning to those who did at least get the correct area of law, far too many assumed that Rochefoucauld applied, without seeming to notice that this is a hugely contentious question, as all the major textbooks show. Moreover, many simply ignored the issue of Bonzo eating the letter, wrongly stating that the trust was valid because declared in writing. Others wrongly stated that the completion of the land transfer form was sufficient evidence for the purposes of s.53(1)(b) without noticing that this may not itself contain any declaration of trust. For some inexplicable reason, many candidates saw the issues both of the shares and the painting as being concerned with the creation of subtrusts, when this was clearly not the case. Nor did any issue of s.53(1)(a) arise. Nor, for that matter, did anything turn on whether the shares were in a public or private company.

Question 2

‘There is no meaningful difference between the beneficiary of a discretionary
trust and the object of a mere power (of a fiduciary character).’


Discuss.

A good answer would have explained what discretionary trusts and fiduciary powers were and their similarities and differences. It would have discussed the rights of trust beneficiaries and objects of powers in light of Schmidt v Rosewood Trust Ltd, including their rights to information. It would also have discussed the so-called ‘property rights’ of beneficiaries and duties of trustees enforceable by beneficiaries and objects in the light of Mettoy Pensions v Evans, as well as certainty of objects of trusts, comparing them to the validity of powers. This question was poorly done. Most candidates saw it as an opportunity to trot out their prepared answer on the three certainties, with little thought as to how that related to the question. Those who invested a little more thought unfortunately failed to heed the instruction in brackets, and talked only of powers of appointment held by non-fiduciaries.

Question 3

‘The cases... do not reveal any, or any consistent single policy consideration
behind the rule that the court will not perfect an imperfect gift.’ ( Arden LJ in
Pennington v Waine (2002)).

Discuss.


A good answer would begin with an explanation of the rules in Re Rose, Strong v Bird, donatio mortis causa, re Ralli’s WT and proprietary estoppel. It would have noted that Arden LJ’s appeal to unconscionability in Pennington v Waine was a marked departure from previous cases of incomplete gifts and that it is difficult to see it as an application of the rule in Re Rose. Moreover, it would have noted that the authority on which Her Ladyship relied, Choithram v Pagarani, was a case of an express, not a constructive trust (though it has to be admitted that there the declaration of trust was seemingly conjured out of thin air by Lord Browne-Wilkinson). Though popular, this question was not generally well done. One major problem was a failure to appreciate what is meant by the phrase ‘imperfect gift’. So, for example, Jones v Lock was discussed, though this was not a case of an imperfect gift but one where the judge found that no gift was intended at all. Nor, despite what some candidates wrote, were Rochefoucauld v Boustead and Paul v Constance cases of courts perfecting incomplete gifts. Nor even were cases such as re Pryce relevant, for they concerned failures to perform covenants to make gifts, not attempts to do so which failed. Finally, those who did address the question generally just gave a list of cases, with little or no attempt at analysis or criticism.

Question 4

By his will, Arthur left his title to his house to Barry ‘on trust for such person
or persons as I shall communicate to him’. A week after making his will, Arthur phoned Barry. Barry was out, and so Arthur left a message on his answering machine, telling him to hold the title on trust for Celia. In his will he also left his title to a yacht to Derek ‘to do with as Derek in his absolute discretion pleases’. In fact, he wrote to Derek after making his will, asking him to hold the title on trust for Edna. Edna and Kitty, Barry’s wife, witnessed the will.

Arthur has now died. Advise Celia and Edna.


This was a problem question on secret trusts. A good answer would have started by identifying the problem with secret trusts: the lack of admissible evidence to prove the declaration of trust. As to the title to the house, the question was whether any of the explanations for disapplying s.9 WA 1837 (fraud theory, dehors theory) and admitting the answer phone message (assuming it was still extant) applied on the facts of the case. The problems were the timing of the communication (this being a half-secret trust), the fact that Barry did not agree to be a trustee and that the admission of the answerphone message would also fall foul of s.53(1)(b) LPA 1925. For the first issue, a good answer would have explained why re Keen may have been wrongly decided. As to the third, it would have discussed the question whether secret trusts are express or constructive (note that the subject guide comes down on the side of express, though this is not of course a binding authority) and whether, even if express, s.53(1)(b) should present a problem (invoking the Rochefoucauld doctrine). Finally, the issue of Kitty, Barry’s wife, witnessing the will should have been discussed. Most argue that this is not a problem in the case of a half-secret trust, though a good answer would have explained why. As to the title to the yacht, the question was whether it was possible to admit written but unattested evidence contradicting the terms of the will: compare with re Keen. The final issue was Edna’s witnessing of the will and whether re Young was correctly decided. Although most candidates spotted this as a question concerned with secret trusts, there were a worrying number who thought the trust of the title to the house was fully secret, while that of the title to the yacht was half-secret. If candidates take no care to read questions, there is little their Examiners can do for them. Many also wrongly described the trust of the yacht as a discretionary trust or one involving precatory words. There was also a general tendency for candidates to write pages and pages of all they knew about secret trusts, spending only a few lines on the question itself. So, for example, though the question raised no issue regarding communication to two or more trustees, a number spent at least two pages detailing the rules in this area. All Examiners do with such material is draw a red line through it, awarding it no marks. Candidates must ensure that they answer the question and do nothing more than answer the question. A further problem concerned the fact that the half-secret trust concerned land.

This raised the point (discussed in all the textbooks and the subject guide) of the applicability of s 53(1)(b) LPA 1925 to secret trusts. Yet scores of candidates simply said that the will provided the writing. They did not notice that the writing in the will, because, ex hypothesi, it did not identify the objects of the trust, was not in itself a valid
declaration of trust.

Question 5

‘The necessary function of a trust is to confer interests on beneficiaries. A trust that does not do that is a contradiction in terms.’

Discuss.


This was a wide-ranging essay question which essentially asked for a discussion of the justifications, of which the essay title is one, for the so-called ‘beneficiary principle’. The answer might have gone on to talk about the rights beneficiaries have, though this would have been somewhat off the point.

This question elicited comparatively few answers and those which were given were poor, most of them being completely off the point. The question was not about the public benefit rule in charities, or at least not specifically about that. Nor was it concerned with the various tests for certainty of objects. What seemed to be happening was that candidates who were clearly stuck for a fourth question used it as an opportunity to write everything they knew about trusts in the hope that something they said would be relevant. Such candidates were rewarded accordingly.

Question 6

‘The notion that there is such a thing as a “presumed” resulting trust is a myth. All resulting trusts arise by operation of law.’

Discuss.


This question essentially asked why resulting trusts arise. Candidates should have discussed the view of Lord Browne-Wilkinson in Westdeutsche that all are based on a presumption of intent to create a trust, a view diametrically opposed to that of Birks and Chambers who argue that this is true of none. A good answer would have noted that there is no logical opposition between ‘presumed’ and ‘operation of law’, for though Birks and Chambers see all resulting trusts as arising by operation of law, they accept this is sometimes because of the operation of a presumption. The answer would have gone on to ask whether the so-called ‘automatic resulting trust’ is really capable of explanation on the basis of a presumed intent and, if not, how. A discussion of whether the views of Birks and Chambers are tenable would also be needed here.

This question was probably the worst in terms of candidates trotting out prepared answers. Moreover, such prepared answers were generally poor. So, for example, candidate after candidate confidently began by asserting that resulting trusts arose by operation of law (the very point in issue) but five lines later, without any sense of contradiction, said that some arose automatically and some because of a presumption of intent to create a trust. Presumably this is because the person who originally wrote the prepared answer did not understand the topic. This only illustrates one of the dangers of relying on such rubbish. Many also said that there is no such thing as an automatic resulting trust since Westdeutsche, without noticing the basic point that the rule formed the ratio of the decision of the House of Lords in Vandervell v IRC and that ratio of the House of Lords always trumps obiter of the House of Lords. To make matters worse scores of candidates, again clearly replicating a prepared essay, said that there was basically no difference between the views of Lord Browne- Wilkinson, on the one hand, and Birks and Chambers on the other. In truth they are poles apart. A similar problem concerns the statement that Swadling (the author of this report) thinks that all resulting trusts arise by presumption of intent. A brief glance at the subject guide, written by the said Swadling, would have shown this to be patently false. Moreover, few attempted to answer the question, the vast majority being content to churn out their inaccurate prepared answer to a question not asked. This question more than any other showed that candidates are not using the subject guide, to their great detriment.

Question 7

Bart won a place at Poppleton University . His sister, Rhonda, was very proud of his achievement and sent him a cheque for £15,000, along with a letter that said: ‘Congratulations on your admission to university! The enclosed cheque is my gift to you, but I want you to use it only to pay for tuition fees.’ Bart deposited the cheque in his bank account, which at the time was overdrawn by £2,000. He paid his tuition fees for his first year with a cheque drawn on that account for £5,000. During that academic year, he drew £2,000 on the account to pay for books and other expenses. After his first year, Bart decided to leave university. He paid the remaining £6,000 to his girlfriend, Lena , who deposited it in her bank account and used £5,000 of it to pay her tuition fees. The remaining £1,000 is still in her account.

Advise Rhonda.


This problem question was primarily about the Quistclose trust and the beneficiary’s rights against third parties following a breach of such trust. A good answer would have asked whether the gift from Rhonda (R) to Brian (B) created a trust, in light of Twinsectra Ltd v Yardley. It would explain that, at least according to Lord Millet’s analysis in that case, if a trust existed B held the money on trust for R with a power to use it only to pay tuition fees. If there was a trust for R, she would have had a personal claim against B for the amount he spent for other
purposes, including £2,000 on his overdraft, £2,000 for books and other expenses, and £6,000 paid to Lena (L). R may have also had a personal claim for £6,000 against L for ‘knowing’ receipt, if she had notice of the trust, and a right to the £1,000 still in her account, which is the traceable proceeds of the trust fund. The answer should have also discussed whether the personal claim was fault-based or strict. Many candidates justifiably asked whether there was an intention on the part of Rhonda to create a trust, though too readily concluding that there was. This is a point of great difficulty with the Quistclose trust, with Lord Wilberforce in Quistclose itself saying that the trust was the product of the transferor’s intent, while the House of Lords in Twinsectra arguably saying that it arose by operation of law. If the latter is true, then there is obviously no point in searching for any intent on Rhonda’s part. Moreover, it was not obvious on the facts that all the conditions for a Quistclose trust actually existed. There was, for instance, no obligation on Bart to keep the funds separate, which is often said to be a requirement. Nor was there any discussion whether a Quistclose trust can arise in cases where there is no contractual obligation placed on the borrower (and in this case, Bart was not even a borrower) as to how the money was to be used.


Question 8

Anton is a trustee of an investment fund trust, which earns income by purchasing and preparing land for development. Over the past few years, Anton used £1 million of trust funds to pay bribes to Bruno, a government official, in return for his help in obtaining government approval for development plans submitted by Anton on behalf of the trust. Bruno used £500,000 of the bribe money to buy a title to a flat for his mistress, Christa, which is conveyed to her. The rest was spent on travel, entertainment, and dining. The bribery was recently discovered, Anton and Bruno have been convicted of bribery and sent to prison, and the development activities of the trust suspended. Marie is a beneficiary of the investment fund trust and wants to bring an action on behalf of herself and the other trust beneficiaries against Christa for the flat or its value. The government is making the same claim as Bruno’s employer. Christa honestly believed that Bruno used his own money to buy title to the flat for her as a gift.

Advise Marie.


This question featured a competition between the beneficiaries of an express trust and the beneficiary of a constructive trust. Marie (M) had a property claim to the title to the flat held by Christa (C), since it was the traceable proceeds of money paid in breach of an express trust for M and the other investors: Foskett v McKeown. The government (G) also possibly had a claim to the title since it was also the traceable proceeds of bribe money paid to Bruno (B): A-G Hong Kong v Reid. There is no clear answer as to who should win. A good answer might have argued that, according to Lord Millett in Foskett, M had ‘a continuing beneficial interest not merely in the trust property but in its traceable proceeds also, and [her] interest binds everyone who takes the property or its traceable proceeds except a bona fide purchaser for value without notice.’ This fiction of persistence might have been a reason for giving M priority over G. Further, the correctness of A-G for Hong Kong v Reid is in serious doubt. A good answer would have been expected to discuss the validity of this contentious decision, especially in light of the conflicting decision of the Court of Appeal in Lister v Stubbs, with Reid having no binding force in England and Wales . Finally, the claim for the value of the title to the flat should have been discussed, though arguably it would have little chance of success since C did not have notice of either trust and would not be liable for ‘knowing’ receipt.

Candidates struggled dreadfully with this question. One problem was a seeming ignorance of basic principles of the doctrine of precedent. So far as a proprietary claim to bribes is concerned, the authority binding on English courts is still Lister v Stubbs. Privy Council decisions do not bind English courts and until Lister is overruled by the House of Lords, it represents English law. Thus the fact that a puisne judge, quite illegitimately, and purely obiter, said that he would not follow it, does not mean that it is no longer the law. The point is flagged up in the subject guide and this was yet another example of candidates doing themselves down by refusing to use the material provided by the University of London. Another problem was a failure to read the question. Many candidates said that it was not clear whether Bruno or Christa had the title to the flat, yet the question clearly stated that it was conveyed to the latter. Moreover there was no question, as a number of candidates suggested, of Christa being a bona fide purchaser for value of that title – the transfer to her was clearly gratuitous. There was also a failure by many candidates to stick to the question. The only issue raised concerned the competing claims to the title to the flat and to the value of that title, yet many candidates spent pages and pages discussing the liability of both Anton and Bruno, for which they received no marks whatsoever.

Zone B

Question 1

‘Section 53 of the Law of Property Act 1925 is redundant in the 21st century and should be repealed in its entirety.’

Discuss.


A good answer to this question would have explained precisely what s.53 does, drawing a distinction between the evidential function of para (b) and the substantive effect of para (c). It would have gone on to question the rationale of the various provisions, especially in light of case law such as Rochefoucauld, Grey and Vandervell, asking, as the question demands, whether they continue to serve any useful purpose. This question, though popular, was not generally well done. Most candidates thought that merely giving a list of cases would suffice. It never does. What the Examiners are looking for is argument, not merely description. A parrot could recite back facts; a lawyer needs to know the facts, but also to be able to apply them in a critical way. Moreover, not all the cases were relevant. One case regularly cited, presumably because it was contained in the ‘model’ answer that candidates were given, was Lyus v Prowsa. If candidates had taken the trouble to read the case for themselves, they would have seen that it had nothing whatever to do with s.53(1)(c). Indeed, it has nothing whatever to do even with the registration provisions of the Land Registration Act 1925, for the estate contract there had been protected by the entry of a caution on the register. There were also routine errors about what s.53 actually says. First, s.53(1)(b) lays down no rule about either the creation of a trust or the transfer of rights. Second, the provision does not apply only to inter vivos declarations of trust. And third, the maxim ‘equity looks to substance not form’ is of no relevance to this provision, despite the fact that at least half the answers trotted it out.

Question 2

Fred has recently died. In his will, he made the following bequests:

i) ‘£100,000 to my executors on trust in equal shares for my nieces and nephews.’ Fred was survived by at least three nieces and nephews, but perhaps more: one of his sisters emigrated to Australia many years before, and has not been heard of since;

ii) £100,000 to my executors on trust for those to whom they consider I owe a moral obligation in such shares as they in their absolute discretion shall determine’;

iii) ‘£250,000 to my executors on trust to be distributed in their absolute discretion amongst my friends. In case of doubt, my wife will tell them whether a particular individual was a friend of mine’;

iv) iv) ‘My executors to pay an equal share of the residue of my estate to each of my children, provided he or she is an adherent to the doctrine of the Church of England.’ Fred was survived by two children, David and Victoria. David is a bishop of the Church of England; Victoria is a Buddhist.

Discuss.


Part (i) of this four-part problem required candidates to identify this as a fixed trust and to then articulate and apply the relevant test for certainty of objects, remembering that the relevant standard of proof in civil cases is proof on a balance of probabilities.

Part (ii) should have been identified as a discretionary trust, the question then being whether it failed for uncertainty of objects. Candidates should have asked whether the fact that it was left to the trustees to determine to whom a moral obligation was owed saved the bequest from failure for conceptual uncertainty (compare with re Leek).

Part (iii) should again have been identified as a discretionary trust, the question now being whether ‘friends’ was sufficiently conceptually certain. Reference to re Barlow might have been made here, though only to note that even Browne-Wilkinson J would have held the bequest to fail had it been a discretionary trust. Assuming conceptual uncertainty, the question then was whether it was possible to save the bequest by reference to a third party.

Finally, part (iv) raised questions as to the applicability of the test for gifts subject to a condition precedent. Most answers followed a standard format of discussing the three certainties in great detail. However, there is no point in doing this where some points are uncontentious. Candidates should learn to spot the areas of difficulty and go straight for them. There was, for example, no point spending two or three pages discussing issues of certainty of intention or certainty of subject matter, for these aspects were unproblematic. Moreover, it was incredible that candidates still make the fundamental mistake of saying that a gift of the deceased’s residuary estate will fail for uncertainty of subject matter.

Question 3

In 2006, Percy covenanted with Tim and Terry that he would pay to them all
royalties he might receive from the publication of a book he was currently writing, to be held on trust for his girlfriend, Gloria. The book has since been published and is a runaway success. Percy has received over £1,000,000 in royalties. However, he has now split up with Gloria, and is refusing to transfer anything to Tim and Terry.

Advise Gloria.


The question here was whether and by whom Percy’s unperformed promise to set up a trust for Gloria could be enforced. Candidates should have discussed the possible routes to enforcement by both Gloria (invocation of the Contract (Rights of Third Parties) Act 1999; trust of the covenant, including discussion whether it can be found where ‘future property’ is involved) and by Tim and Terry (whether a claim by them at law will be possible; if so, whether they will obtain substantial or nominal damages; and if so, whether any damages obtained will be held for Gloria or, as has been argued, on resulting trust for Percy).

This question was generally not badly done, though some candidates made the fundamental mistake of thinking that it was a question about imperfect gifts, which it clearly was not since no attempt to make a gift, perfect or imperfect, was involved. Nevertheless, for those who did correctly see it as a question about unperformed covenants to settle, there were some odd statements. So, for example, in discussing the question whether the 1999 Act applies to voluntary covenants, many candidates referred to a supposed disagreement between the views of Professor Penner and Professor Atiyah. There is no such disagreement, for Professor Atiyah retired long before Professor Penner was out of short trousers. One can only think that this was an argument invented by the author of a prepared answer, along with the ridiculous argument that since European Union countries did not have a requirement of consideration for contracts, then this somehow meant that English law did not either. Candidates who wrote this had obviously fallen asleep in their Constitutional law classes. There was also a complete misunderstanding of the resulting trust argument, which has nothing to do with any possible ‘unjust enrichment’ of Tim and Terry.

Question 4

‘The notion that English law does not recognise trusts for private purposes is
a myth. Moreover, there is no justification whatever for such a rule.’

Discuss.


A good answer would have explained what a purpose trust is and the orthodoxy that they can only exist for charitable objects: Leahy v A-G for NSW; re Endacott. It would then examine the exceptions, especially that of re Denley, asking whether they are so wide as to cast doubt on the existence of the rule. In this respect, candidates should have been able to say that cases such as re Sanderson and re Osoba do not involve purpose trusts at all, that in these cases the purpose describes either the motive for the gift (Osoba) or its subject matter (Sanderson). The next question, exactly why there is a rule against private purpose trusts, was more difficult, but candidates should at least have been able to discuss the objections set out in Morice v Bishop of Durham. This was not a popular question and did not produce many good answers. Many saw it as an invitation to write all they knew about unincorporated associations, even though that topic is only tangentially relevant.

Question 5

Some believe that resulting trusts arise on the basis of intention; others, that
they arise at least sometimes by operation of law. Does it matter who is right?


A good answer would have explained what the phrase ‘resulting trust’ means, and its incidences, before going on to discuss the various theories as to why such trusts arise. It should also have paid attention to the second part of the question, explaining whether it matters who is right. In this respect, candidates should at the very least have been able to identify the different result which would have obtained in Westdeutsche had Professor Birks’ view prevailed.

This was probably the worst question on the paper so far as the use of rote answers was concerned. Time and again, the Examiners had to face the drivel written by the author of one particularly poor answer. So, for example, we were told again and again that there was virtually no difference between the views of Lord Browne-Wilkinson and Professors Birks and Chambers. But if that is right, why is there so much debate? All that that demonstrated was that the author of this dreadfully prepared answer understood nothing of this difficult topic. Once again, candidates would have been much better off using the subject guide, where the relevant arguments are clearly set out. And given the poor legal skills of the author of the prepared answer, the Examiners also had to put up with a concluding paragraph which said that at the end of the day it did not matter who was right, because ‘the courts could be trusted to reach a just result on the facts of each case’.

If it did not matter who was right, why did the parties in Westdeutsche spend hundreds of thousands of pounds litigating that very point?

Question 6

Advise on the validity of the following bequests in Gerald’s will:

i) £100,000 to my trustees to be used to teach the poor the benefits of internet gambling;
ii) £500,000 to my trustees to be used to provide private hospital treatment for university employees in the United Kingdom;
iii) £100,000 for the furtherance of the traditional liturgy of the Church of England and the discouragement of its further reform;
iv) £100,000 to provide table tennis facilities for orders of cloistered nuns in London.


This was a problem question on charitable objects. The issue in (i) was whether the gift could be said to fall under the head either of advancement of education or the relief of poverty, while part (ii) raised questions as to the public benefit requirement. Part (iii) was concerned with the ‘advancement’ of religion, as was (possibly) part (iv), which also involved questions of the Recreational Charities Act 1958. At the date the exam was sat, the new charities legislation was not in force and candidates should therefore have answered the question on the basis of the unreformed law.

Despite this, many candidates answered this question on the basis that the Charities Act 2006 was in force; it was decided not to penalise them for so doing. Indeed, the answer is probably the same whichever law is used. As to (i), the issue was not, as many mistakenly thought, whether there was a sufficient public element (for there was no restriction to a certain class of persons) but whether this gift could be said to ‘relieve’ poverty. Almost no candidate managed to see this rather obvious point. Candidates fared better on the issue whether this could be seen as a trust for the advancement of education, rightly drawing analogies with statements concerning trusts for pickpockets and prostitutes. As to (ii), though this purpose was, abstractly, clearly charitable, many struggled unnecessarily with it. They also wrongly saw problems with the fact that the hospital provision was private.

Why should this matter? As to (iii), virtually no one asked whether the 266 0002 Law of Trusts gift would ‘advance’ religion (compare Gilmour v Coates). As to (iv), there was a very poor application of the 1958 Act. Many candidates also made the basic mistake of saying that if any of the purposes failed to qualify as charitable, then the gift would go cypr├Ęs. Such candidates had obviously never read the subject guide or any reputable textbook.

Question 7

Is there any good reason to distinguish between the personal liability of those who assist a breach of trust and the personal liability of those who receive rights transferred in breach of trust?


A good answer would have pointed to the obvious difference between one who assists a breach of trust and one who receives rights dissipated in breach of trust, in that only the latter is ipso facto enriched. The question then is whether this should lead to a different condition for liability. Some have argued it should and that while the assister is rightly only liable for a dishonest (or possibly only a knowing) assistance, the recipient should be subject to a strict liability claim (with defences) in unjust enrichment. That in turn has been criticised on the basis that the enrichment of the recipient is not at the trust beneficiary’s expense.
Candidates saw this as an invitation to write page after page on the requisite degree of knowledge for assistance claims, completely ignoring the point that they were supposed to differentiate between assistance and receipt. Nor was it sufficient to point out that the rules were different – the question required a discussion of whether that difference is justifiable.

Question 8

Henry is the sole trustee of a trust fund of £1,000,000. By the terms of the trust, he is under a duty to invest the money ‘as if he were absolutely entitled to the assets of the trust’. He is approached by Lenny, an investment broker, who offers to pay him £100,000 ‘no questions asked’ if he invests the trust fund with him. Henry agrees, and is paid the £100,000. He uses it to invest on the stock market, eventually making a profit of £700,000, which he pays into his bank account, which was at the time £200,000 in credit. He draws £600,000 from the account and uses it to discharge the mortgage on his house. Meanwhile, the trust investment has dropped in value to only £500,000. To make matters worse, Henry is now insolvent and Lenny has fled the country.

Advise the beneficiaries of the trust.


A good answer would have started by saying that though the trustee had no restrictions on the assets in which he could invest, this did not mean that he was absolved from a duty to exercise care when making investments. Candidates should therefore have asked whether Henry had discharged that duty by blindly investing the trust fund with Lenny. The next question concerned the £100,000 Henry received from Lenny. On the basis that the money was received in breach of fiduciary duty, the first issue was whether Henry was accountable for that sum Examination papers and Examiner’s reports 2008 to the beneficiaries of the trust. On the assumption that he was, it should then have been asked whether that liability to account also generated a constructive trust in favour of the beneficiaries. If it did, then the question was whether the beneficiaries could trace into: (a) the £700,000 made through the investment of the money; and (b) (through subrogation) the discharged mortgage on Henry’s home. Though Lister v Stubbs is still English law, and the examination was one in the trust law of that jurisdiction, many candidates surprisingly took it upon themselves to apply the law of New Zealand to this question.

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