1. Trusts (this part is worth 15 marks)
The course includes the study of trusts – a complex area of the law. The creation of an express trust (i.e. one intended created and not arising by law or fact) requires ‘three certainties.’ They are;
· Certainty of intention
· Certainty of subject matter (trust property)
· Certainty of object (beneficiary or purpose)
Basil declared himself trustee of 5% of the issued share capital of Basil Electrical Co Pty Ltd. There were 1000 shares in the company. There was no further identification of the 50 shares held on trust.
Is there sufficient certainty for creation of a trust? In addressing this question identify the research question, explain the relevant law succinctly relating to the research question and then discuss your research methodology, and finally provide an answer to the question.
2. Agency (this part is worth 15%)
A key issue in the law of agency is the authority of the agent. In order to bind the principle by the actions of the agent, the agent must have been acting within some level of authority. The authority of the agent comprises:
· Express actual authority
· Implied actual authority
· Ostensible authority
You have a small problem scenario, but this time dealing with agency. The same instructions apply, addressing the research question and methodology. You are simply adapting the requirements to address this new research problem.
Tina and Susie formed a company to acquire and develop land. The board of directors comprised Tina and Susie, and a nominee of each. The development of the land was left to Tina who, with the knowledge of the Board of Directors, acted as Managing Director, although she had never been formally appointed to the position. Tina employed a firm of architects to design plans for the land. They issued a bill to the company but this remained unpaid. Later the architects sued the company for payment of their fees for work they have done.
Is the company liable for the architect’s fees?
In addressing this question identify the research question, explain the relevant law succinctly relating to the research question and then discuss your research methodology, and finally provide an answer to the question.