5LAW2004 5WLA2009 Equity and the Law of Trusts Summative Assessment Two 2025/2026 | University of Hertfordshire

 5LAW2004/5WLA2009 Summative Assessment Two 2025/2026

Equity and the Law of Trusts

Jarvis Sawyer died in September 2021. Under the terms of his Will, he established two trusts to provide for certain of his relatives.

The first trust is the ‘Gaddesden Trust’, and the second is the ‘Nettleden Trust’. The Gaddesden Trust is for the benefit of his aunt, Lilah Hollins, for life, with remainder to her children, Martin (aged 23) and Angela (aged 17), equally. The trustee of the Gaddesden Trust is Callum Allen, a solicitor. The Nettleden Trust is for Paul (aged 16), Eric (aged 22), and Tania (aged 24), in equal shares, conditional on them reaching the age of 25. The trustees of the Nettleden Trust are Graham Blain, a chartered surveyor, and Geneviève Bourreau, a chef. Other than a restriction in the Gaddesden Trust respecting the sale of a classic Jaguar motor car, there are no express powers of investment or maintenance and advancement in either the Gaddesden Trust or the Nettleden Trust.

Martin has completed LLB (Hons) and LLM degrees, and in August 2024, Martin asked for an advancement of £33,000 to allow him to pay the fees, and to support his maintenance, while he completed the Bar Training Course at the University of Hertfordshire. Martin has a first class honours degree, and a distinction from his LLM. He volunteers at the Hatfield Citizens’ Advice Bureau one afternoon a week, and he has completed five mini-pupillages in the last two years. Having considered Martin’s experience and qualifications, Callum advanced the funds to Martin. Martin paid the fees in early September, and he has found a bed-sit apartment in Hatfield and paid the rent up-front for one year.

In September 2024, in breach of trust, Callum withdrew £30,000 from the Gaddesden Trust and deposited it into his personal bank current account (‘his account’). His account was overdrawn by £5,000 before the deposit. In October 2024, Callum withdrew £15,000 from his account and used it to purchase a painting by American artist, Keith Haring. Last month, it was put into a public auction of ‘Pop Art’ at a major London auction house where it sold for £22,000. Callum gave £10,000 to his sister, Morag, who used the money to build a conservatory on the back of her house. Morag had no idea the money was removed from the Gaddesden Trust. Callum spent the other £12,000 on a winter cruise in the Caribbean in January 2025.

In November 2024, Callum arranged for the sale of the classic Jaguar motor car (‘the car’) belonging to the Gaddesden Trust. The trust fund stipulated that the car should not be sold, but leased to film production companies for use in period dramas. Fatemeh Hosseini, retained solicitor to the Gaddesden Trust, on Callum’s instructions, drafted the contract of sale for the car. The car was sold to a US collector for £130,000, which was the market value of the car. The US collector had no knowledge that the car should not have been sold. When the US collector paid the purchase price, Callum used £17,000 to pay off part of his mortgage, and paid £5,000 to Fatemeh Hosseini as fees for drafting the contract. He deposited the remaining £108,000 into the Gaddesden Trust bank account.

In December 2024, Callum removed the remaining £10,000 from his account and spent five nights in Paris at the Ritz Hotel. In February 2025, Callum Allen was declared bankrupt with personal debts in excess of £345,000.

Graham Blain has always loved France. Consequently, in 2022, he decided to purchase a holiday home (known as a gîte) in France as an investment for the Nettleden Trust. Before making the purchase, he suggested to Geneviève Bourreau that it would be agood idea. Geneviève said, ‘Look, you just do what you think is right. Frankly, I’m too busy trying to get the Michelin star for my Hatfield restaurant. I trust you.’ Eric and Tania approved of the investment when asked about it by Graham. Graham reached out to his friend, Naomh Regan, an independent financial adviser. Naomh advised a purchase in the Dordogne region would be attractive as a holiday let, as well as having a goodresale value should they wish to sell it. Acting on this advice, in April 2022, Graham Blain spent €295,000 from the Nettleden Trust on a four-bedroom gîte with swimming pool, about three kilometres outside Bergerac. Since the purchase, the gîte has been fully rented every summer and produced an income of €38,000 in the summer of 2022 and 2023. In the summer of 2024, its income increased to €43,000, and it is projected to be €48,000 in 2025. The gîte was recently valued for insurance purposes at €445,000.

The house which was purchased in 2022 by Graham was owned by a company in the UK called French Escapes Ltd. Last month, Graham discovered that Geneviève is a shareholder in French Escapes Ltd and that she received a commission of €4,000 for finding a buyer for the holiday home. Geneviève used the €4,000 to purchase a small bronze figure of a cat. In February 2025, Geneviève had the figure assessed for insurance purposes and discovered that it was, in fact, an Egyptian bronze figure of a Cat from the 26th/30th Dynasty, dating from around 664 – 342 BC, with a value of around €25,000.

Advise on:

(a) The legal basis on which Martin could seek the advancement of £33,000 from the Gaddesden Trust and whether this advancement was lawful.

(b) How the funds removed from the Gaddesden Trust in September 2024 might be recovered by the beneficiaries, and from whom.

(c) What action might be taken in respect of the sale of the Jaguar motor car to the US collector against any of the parties involved.

(d) Whether the purchase of the gîte in France was lawful and, if not, what action might be taken in respect of it. 

(e) Whether Geneviève could be said to be in breach of her fiduciary duties in respect of the purchase of the gîte in France.