EQUITY & SUCCESSION 1

(TRUSTS)

BY JUSTICE ALEXANDER OSEI TUTU

 OUTLINE
 Historical Background
 Definition of Trusts
 Nature of Trusts

 Classification of Trusts
 Private & Public
 Express: Executed & Executory; Constituted & Unconstituted
 Implied
 Constructive
 Resulting
 Secret & Half Secret
 The Common Law Doctrine of Advancement
 Trust of Perfect & Imperfect Obligations
 Continuation of Outline

 Trusts created by Statute

 Formalities for creating a Trust
 The Three Certainties
 The Position of the Trustee
 Termination of Trusteeship
 Duties of Trustees
 Powers of Trustees
 Background
 Roman Law had a well developed concept of Trusts in terms of testamentary
trusts, but never developed the concept of inter vivos trusts which apply why
the creator lives.
 Inter vivos trust were later created in under the English Legal System.
 (Trusts developed out of ‘uses’, so to appreciate trusts we need some
understanding of ‘uses’.
 Uses derived from Latin ‘opus’ in the phrase ‘ad opus’ meaning ‘on behalf of’.
 Corrupted in the English Language from ‘oes’ and ‘uses’ and ‘use’.
 It was an early practice for a man to be given land to hold on behalf of another.
 Examples:
1. John holding land ‘ad opus’ Cynthia meaning – Holding it on behalf of
Cynthia.
2. Sheriff seized lands ‘ad opus’ domini regis – On behalf of the King.
3. When a knight was to go on a crusade, he would convey his land or property
on behalf of his wife and children.
(N.B. They were usually for temporary use only)
 The History behind it
 People started holding land permanently and generally for the use of others
from 1230.
 It was associated with the era of Franciscan Friar in England (The movement
of St. Francis of Assiseh – which prescribed absolute poverty and prohibited a
friar from owning any property on earth).
 Followers were to relinquish their properties to the Parish for the use of the
Community.
 The friars then did not own any property but enjoyed the benefit of holding
them for their use.
 Since then, uses of a permanent nature became common and by the middle
of the 14th Century (1350’s), it was popular all over England.
 It worked like this.
A to B for the benefit of C
A became the Feoffor, later known as the Settlor (Grantor)
B became the Feofee, later known as the Trustee
 How did the Common Law handle them?

 Initially, the common law’s position on uses was uncertain.

 Later, it adopted the position not to recognize the cestui que
(beneficiary).
 Common law only recognize the feoffee as the person seized of
the land (legal owner) and paid no regard to the beneficiary.
 Hence, the common law would not compel a feoffee to convey
the land to the cestui que.
 If a feoffee breached his duty to the cestui que, there was no legal
remedy for the latter.
 In effect, any body not in control of the property was deemed a
stranger with no remedy.
 The feofee only had a moral duty – a reliance on the honour and
good faith.
 Did Equity step in?
• Yes, Equity did.
• When? - In the early 15th Century (From 1400)
• How? – The Chancellor stepped in to protect the interest of
the cestui que (Beneficiary).
• Any Justification for his intervention? – Yes. The argument
that the feofee only had a moral duty and if Equity was a
Court of Conscience, why could it not intervene?
• What could the Chancellor do? – To compel the feofee to
convey a land or property or the proceeds to the
beneficiary.
• What if the feofee disobeyed? - Imprisonment by the
Chancellor (Equity acts impersonam).
How the Common Law & Equity viewed uses

 Feofee was seized of the land or property, so was seen as the

legal owner by the common law.
 The cestui que (Beneficiary) was seen as the true owner by
equity (Equitable owner).
 There arose a duality of ownership (Legal owner and equitable
owner).
 The Common Law did not recognize the interest of the
beneficiary; did the Chancellor also fail to recognize the interest
of the feofee?

Ans: No. The Chancellor still recognized the interest of the feofee as
the legal owner, but ensured it was subjected to the undertaking he
had given to pass the benefit thereof to the cestui que use.
 Some advantages of uses
1. It facilitated the evasion of feudal burdens, such
as wardship and marriage which were exigible if
an infant succeeded to land.

2. Where a person was found guilty for treason or

as a traitor and he was to be executed, uses
enabled him to appoint a feoffee to become the
legal owner of the property, so that it could be
saved for his wife and children.
 Definition of Trusts
 There is a definitional crises of Trust.
See the celebrated lecture notes on Equity by Maitland “No
doubt, we should like to begin our discussion with a definition of
‘Trusts’. But I know not where to find an authoritative definition.”

 100 years later, has a definition been found?

According to Snell’s Principles of Equity:
“No one has yet succeeded in giving an entirely satisfactory definition
of a trust.”

 In the next slides, we will look at some attempts made so

far to define trusts.
 Coke’s Definition
“A confidence reposed in some other, which is not issuing out land, but as a
thing collateral annexed in privity to the estate of the land and to the
person touching the land, scilicet, that cestui que use shall take the profit;
and that for the cestui que use for breach of trust his remedy was only by
subpoena in chancerie”.

Any Critique?
Yes, by Mailtland
1. The definition does not help us to understand the nature of trust,
because the words, “confidence” and “trust” in the definition do not
give their true meaning.
2. Trust may be created in an infant or unborn person unaware of the
trust, so the trust or confidence reposed in the trustee by the
beneficiary is misleading.
3. How does the trust and confidence occur? When it is created by law
and not by the acts of the parties.
 Underhill’s Definition

• This definition was adopted by Romer L.J. in Green v. Russell [1959]

“A trust is an equitable obligation, binding a person (who was called a ‘trustee’) to deal
with property over which he has control (which is called the trust property) for the
benefit of persons (who are called the beneficiaries or cestui que trust) of whom he may
himself be one and any one of whom may enforce the obligation.”

Credit: The definition contains the essentials of a trust.

Minuses:
1. It excludes charitable trust which may not be enforced by individual persons, e.g. A
trust for the benefit of handicapped children. This cannot be enforced by any
individual, though an individual may be a beneficiary. It is the Attorney General
who can enforce it.
2. The definition is quite misleading as it makes it appear as if trust can be made only
for the benefit of human beings. It can be for non-human beings too. E.g. for the
maintenance of a tomb in a church-yard or for the support of dogs, horses etc.
 Keeton’s Definition

“All that can be said of a trust therefore is that it is a relationship which arises
wherever a person called a trustee is compelled in equity to hold property, whether
real or personal, and whether by legal or equitable title, for the benefit of some
persons (of whom he may be one and who are termed cestus que trust) or for some
object permitted by law, in such a way that the real benefit of the property accrues,
not to the trustee, but to the beneficiaries or other objects of the trust. ”

Critique:
1. Trusts need not be created for human beings only.
2. Trust is now not available at equity only. Statutes may regulate it.
For instance, in Ghana, the Trustees Act, 1860, the Charitable
Trusts Act 1869, the Trustees Incorporation Act 1962 (Act 106)
and The Securities Industries Act 1993 (PNDCL 333) are all
applicable to trust
 Restatement of the Law of Trust by the American
Law Institute

Their definition is not too different from that of

Keeton.
“A trust … when not qualified by the word ‘charitable’ ‘resulting’
or ‘constructive’ is a fiduciary relationship with respect to
property subjecting the person by whom the property is held to
equitable duties to deal with the property for the benefit of
another person, which arises as a result of manifestation of an
intention to create it.”
 General Observation
• Defining trust may be difficult, but explaining its nature may not
be, because one only needs to draw a distinction between the
holder of a legal interest and the equitable interest.

• The definitions may only give us an idea, but Hanbury observes:

“Many attempts have been made to define a trust, but none of them has been wholly
successful. It is not thought that a dissection and criticism of earlier definitions are
very rewarding; rather it is better to describe than to define a trust, and then to
distinguish it from related but distinguishable concepts .”

Let us now heed to Hanbury’s advice and curtail any further attempt
at searching for an acceptable definition of trust and concentrate on
how we can understand it by comparing with other concepts instead.
 Bailment & Trusts
• Bailment, according to Blackstone is “a delivery of goods in trust.”
• He adds: “Bailment, from the French Bailler, to deliver, is a delivery of goods in trust, upon a contract expressed
or implied, that the trust shall be faithfully executed on the part of the bailee.”
• See Banahene v. Shell (Ghana) Ltd. (2012) 44 GMJ 77

Critique:
1. Hanbury says it is a source of confusion since the bailment may or may not be governed by a contract, in
some cases the bailor may be relying on the bailee to exercise a certain standard of care in the handling of
property under his care.

2. Keeton says Blackstone definition does not answer whether a bailment is a trust or a contract.

Any Similarity?
YES, they both hold properties with duties towards another.

Any Difference (s)?: YES

3. Bailment is recognized at common law, trust is only known in equity, so bailment does not suffer from the
frailties of equitable interests.
4. Only movables at English Law may be bailed – Trust may be for any type of property.
5. Trustees have general use of the property, so has legal title. – Bailee may only be in possession, legal title is in
the bailor.
6. So any unauthorized sale by a trustee will confer title on a bona fide purchaser for value without notice of the
trust. – A bailee cannot convey title without the proper authority of the bailor generally.
 Agency & Trust
Similarities
a. Each owes a responsibilities towards another. The Agent to the Principal; The trustee to the
Beneficiary.
b. There is the element of accountability in both cases.
c. Duty not to delegate in both cases (Delegatus non protest delegare).
d. Fiduciary duties are owed in both cases.

Differences
1. Agency – Common Law:
Trust – Equity

2. Apart from agency of necessity, agency generally arises by a contract or other consensual relationship
between principal and agent.
- Trust do not import any such contractual relationship.

3. Agents – in possession of property

Trust – Holds the Legal title.

4 - Agents can involve his principal in liability (Vicarious Liability)

- Trustees cannot involve beneficiary in liability.
 Contract & Trusts
Trust may be created within a contract between a settlor and the trustee (but not the
beneficiary of the trust).
Differences
1a. Contracts are agreements supported by a valuable consideration or made under seal
b. Under Trust, there is no contract between trustee and beneficiary.
No consideration passes from one to another, especially, if it is a trust created in a will or settlement.
(Even where a contract arises, it is between the settlor and the trustee and not the trustee and the
beneficiary).
2a. In contract, the original English position was that only a party to a contract can sue on it.
b. In trust, the beneficiary who was not a party to its creation may sue to enforce a right under it.
(However, section 5 of the Contracts Act, 1960 (Act 25) has rendered otiose this principle. A contract can
now confer a benefit on a person not a party to the contract).
3a. Contract debts may be enforceable personally, and in the case of insolvency, may not be wholly
recoverable.
b. A trust liability, however falls on the trust property and not the trustee personally.
4. Trusts property may be traced into any person benefitting from the breach rather than merely
recovering damages for a breach of the contract.
5a. Contractors are liable for accidental losses.
b. Trustees are not so liable.
6a. Contract developed under the common law
b. Trust is a creature of equity
 Administration & Trusts

Similarities
a. Both hold property of another
b. Administrator on behalf of legatees or devisees, just like trustees who holds properties for
beneficiaries.

Differences
1. Their Origins
 Administration of estates originated from the Ecclesiastical Courts
 Trust from the court of Chancery

2. Functions
 Administrator – Winding up estates, payment of debts and distributes assets.
 Trustee – Normally appointed to hold property for the benefit of the trust

3. Power of Disposal
 Personal Representative has power to individually dispose off immovable properties.
 Trustees must act jointly.
 However, in immovable properties, there is no distinction between the two, as the power to
dispose off must be done jointly.
 Powers & Trusts

Power is an authority vested in a person to deal with or dispose off

property not his own.

Differences
1. Trusts are equitable; Powers may be legal, e.g. Power of Attorney
to a person to convey property may be subject to the common
law.

2. Trust may be imperative; Powers are discretionary.

• (Trustees are obliged to perform their duty, else they would be
liable for breach of a trust.
• Powers may or may not be exercised, it is at the option of the
person whom it is given.
 Classification of Trusts
Trusts are of different types. It may be created expressly,
by statute, resulting and constructive.

a. Private & Public

b. Expressed & Implied
c. Completed Constituted & Incompletely Constituted.
d. Executory & Executed
e. Naked & Half Naked
f. Fixed, Protective & Discretionary
g. Simple & Special
h. Trusts in a ‘higher sense’ & Trusts in a ‘lower sense’
 Private Trust

• A trust created for the benefit of an individual or a

class of individuals.
• It is ordinarily enforceable by any of the
beneficiaries.
• It may be: Express, implied, Constructive or
Resulting
• Trusts of Perfect & Imperfect Obligations
 Public Trusts

 Public Trusts are also called Charitable Trusts.

 It is one whose primary objective is for the promotion of the public welfare, though it
may incidentally benefit an individual or a class of individuals.
 Where its object is obsolete, impracticable or uncertain or if it may fail, then the court
would apply the cy pres doctrine to apply to the nearest purpose resembling the
original trust, so that the trust does not fail.
 It is enforceable by the Attorney General on behalf of the state.
 In truth, public trust is not commonly encountered in Ghana and there are a dearth of
reported litigation of it.

 Trusts which have been recognized as being for the benefit of the public are:
a. Trust for the relief of poverty, relief for the aged or incapacitated and poor people.
b. Maintenance of the sick and maimed soldiers
c. For the repair of bridges, ports, highways, sea banks etc.
d. Trust for the advancement of education
e. Care for orphans
f. Trust for the advancement of religion and
g. Trust for other purposes beneficial to the community.
 Expressed Trust
• Also called Declared Trusts.
• It is one expressly created by a settlor or testator and it is usually in writing; e.g. where a testator (A)
conveys/devises property of a land at Cantonment to (B) in trust for C.

This could be Executed or Executory

a. Executed trusts: It is an expressed trust which the testator or settlor has marked out in appropriate technical
expressions the interest to be taken by each beneficiaries. Here, the testator or settlor is his own draftsman.
And in this case, no further instrument is necessary, but the trust is finally declared at the time of its creation.
E.g. is where property is conveyed ‘to A in trust for B for life and after his death for C absolutely. In either of
these examples, the trust is executed because each beneficiary’s interest is defined precisely and there is no
need for a further instrument to perfect the trust. According to Curzon, executed trust is one in which the
settlor has declared and perfected in the trust instrument the limitations of the estate of trustees and
beneficiaries, so that no further instrument is required to define those interests. The settlor has ‘acted as his
own conveyancer.’ See Egerton v. Brownlow [1853]

b. Executory Trusts: It arises where the settlor or testator has created a trust in favour of beneficiaries, and
although he may indicate a scheme for settlement, the details are left to be filled by the trustees. The
quantum of each beneficiaries’ interest may be left out to be settled later. e.g. In a Will, testator may convey a
house for his children without setting out the respective rooms or interest.

Jessel MR in Miles v. Hartford [1879] explains:

“He (the settlor) has said in effect: ‘Now these are my intentions, do your best to carry them out.”
 Completely Constituted & Incompletely Constituted

Completely Constituted: When the trust has been effectively vested in trustees for the benefit of the beneficiaries. Until the trust is
vested in the trustees, it is not completely constituted.

How is trust completely constituted?

a. When it is conveyed to the trustees (If the settlor is both the legal and equitable owner, he conveys the property to the trustee. If
he only has the equitable interest, he may create a trust which will be completely constituted by his assigning his interest in the
trustee).

b. By the owner declaring himself a trustee.

 No special words are essential and the settlor does not necessarily have to use words like: “I declare myself a trustee’, but he must
use equivalent words or expressions that have such meaning. See Jessel MR in Richards v. Delbridge [1874]
 There must be a present irrevocable declaration of trust. See Neville J. in Re Cozens [1913]
 The declaration need not be communicated to the cestui qui trust. See Standing v. Bowring [1885]

Jones v. Lock [1865]: X, who had a son aged 9 months, said to the boy’s nurse that he intended to make the child a present. He
produced a cheque and said: ‘I give this to baby … It is for him and I am going to put it away for him.’ He then put the cheque in his safe.
A few days later he died and one of the executed obtained payment of the cheques in favour of the estate. It was held that there was no
gift to the baby; no valid declaration of trust in its favour could be deduced from X’s statement or actions. In the words of Lord
Cranworth, “… it would be a dangerous example if loose convrsations of this sort, in important transactions of this kind, should have
the effect of declaration of trust. It was all quite natural, but the testator would have been very much surprised if he had been told
that he had parted with his 99 pounds and could no longer dispose of it. it all turns to the fact, which do not lead me to the conclusion
that the testator meant to deprive himself of all property in the note, or to declare himself a trustee of the money for the child”

But in Paul v. Constance [1977], the phrase ‘the money is as much yours as mine’ was held to constitute an express declaration of trust.
 Soon Boon Seo v. Gateway Worship Centre [2009]
SCGLR 278 @ 296 – Per Akuffo JSC (as she then was).

• “A trust is completely constituted when the trust is vested

in the trustees for the benefit of the beneficiaries. The
classic statement of the law as to what is meant by
complete constitution (or perfect creation) of a trust is to
be found in the judgment of Turner LJ in the leading case
of Milroy v. Lord (1862) 4 De GF & J at pages 274-275 of
the Report as follows: ’... In order to render a voluntary
settlement valid and effectual, teh settlor must have done
everything which, according to the nature of teh property
comprised in the settlement, was necessary to be done in
order to transfer the property and render teh settlement
binding upon him.”
The Mode of Transfer
i. Landed Properties are to be in writing, sections 1-3 of the Conveyancing Act.
ii. Chattels: In writing or by Delivery to the trustee. See Jaffa v. Taylor [1990]
iii. Registered shares: By proper transfer under the appropriate law.

iv. In Re Cole [1964], a husband bought a house in London and furnished it for
members of his family who were then living elsewhere. When his wife
subsequently visited the house he said to her: “It’s all yours’. The husband
was later declared bankrupt and his wife claimed that the furniture in the
house belonged to her. It was held that a gift of chattels cannot be perfected
by merely showing them to the purported donee and speaking words of gift.
An unequivocal act in possession must be shown; the wife had been unable to
prove that.

Incompletely Constituted: This occurs where the trust property has not been so
vested in the trustees. Once, they are not properly vested, beneficiaries may not be
able to enforce them, except where the beneficiary concerned has provided a
valuable consideration. Usually, the incompletely constituted trust requires some
further action by the settlor before it can be said to be ‘perfectly created.’
 The Examples of Completely constituted & Incompletely
constituted

1. Aba bequeaths $200,000 to Tom on trust for the purchase of a house at Nima to be settled
on Cynthia and the children of Cynthia. Here, the trust property has ben vested in the
trustees on trust for the beneficiaries. The trust is deemed to be completely constituted.
2. In Milroy v. Lord [1862], the settlor, X, executed a voluntary deed which purported to
transfer 50 bank shares to Y to be held in trust for Z. X later handed the share certificate to Y.
At that time Y held a general power of attorney entitling him to transfer X shares. The shares
could be transferred only by registration of the transferee in the bank’s books; this was not
done. It was held that no trust existed because the shares had never legally vested in Y. In
effect, the trust was deemed to be incompletely constituted.
3. The case of Milroy v. Lord (supra) has been modified in the case of Re Rose [1952]: The
donor executed two valid transfers of shares in a company and handed them to the donee,
together with the necessary certificates. Under the company’s article of association, the
company’s directors had the discretion to register or not to register a share transfer. In the
event, that the directors refused to have the two shares registered until after the death of
the donor. The court of Appeal held that the donor had done all in his power to vest the legal
estate in the donee and that the Milroy doctrine had no application.
4. Mascall v. Mascall [1984]: Browne-Wilkinson LJ held: ‘A gift is complete as soon as the
settlor or donor has done everything that the donor has to do, that is to say, as soon as the
donor has within his control all those things necessary to enable him, the donee, to complete
his title.”
 Implied Trust

• This does not arise as a result of the intention of

the parties.
• It is sometimes referred to as presumptive trusts.
• It is inferred from conduct. See Soon Boon Seo v.
Gateway Worship Centre [2009] SCGLR 278 @ 296

It may be:
a. Constructive trust, or
b. Resulting/Remedial Trust.
 Constructive Trusts
• This arises where equity considers and treats the legal owner of a property as a trustee, although the settlor may
not have created any trust expressly to affect the property.
• Usually, the person may have attempted taking an advantage of his position to acquire a legal interest in a
property.
• The purpose of this trust is to avoid unjust enrichment.
• According to Dennis Adjei, constructive trust is imposed on a person who has wrongfully acquired property by a
court.
• Constructive trust is also known as involuntary trust or trust de son tort.
• The objective is to hold a person liable as a trustee so that he does not breach his fiduciary duties owed to the
beneficiary or benefit from the trust property.

Examples:
1. Where a trustee fails to renew a renewable lease and he in turns takes the lease in his own name instead of the
trust, he would be deemed to be a constructive trustee of the renewed lease by the court as it constitutes an
abuse of his fiduciary duty which a trustee is bound to observe.
2. Where a trustee purchases with profits of the trust property or with proceeds from the trust property he
disposes off. (If there is a loss however from his investment, the trust property or beneficiary is not liable).
3. A head of family in control of family property renews a lease which was in the name of the family or a member
of his family in his own name
 Saaka v. Dahali [1984-86] 2 GLR 774
 Adomako Anane v. Nana Owusu Agyemang & Ors. [2014] 75 G.M.J. 1, S.C.
 Soon Boon Seo v. Gateway Worship Centre [2009] SCGLR 278 @ 293-294
 Kusi & Kusi v. Bonsu [2010] 26 G.M.J. 20, S.C.
 Saaka v. Dahali [1984-86] 2 GLR 774).

• S who was a member of the Dagomba tribe acquired a plot in Tamale as of right (usufruct)
and put up a building in 1920. when he was made a chief of his village, he left the house and
put M and U in charge. Both caretakers later left the house and put Y in charge as the sole
caretaker of the house with the approval of S. Y lived in the house with her daughter D, the
mother of the defendant. In 1948, Y renovated a portion of the house that collapsed at a cost
of 75 pounds. When S became aware, he tried to refund the amount to Y but she declined to
accept thinking that it was a ploy by S to evict her from the house. In that same year, both S
and Y passed away. The plaintiff who was then living at Takoradi survived S as his sole
survivor.

• In 1979, she returned to Tamale and her attempt to do some extension works on the
building was resisted by the defendant who claimed the property belonged to her
grandmother that had passed to her through her mother, D. When plaintiff sued at the High
Court for declaration of title, she lost at the trial court, inter alia: that the defendant mother
was recognized as the tenant of the plot on which the house was erected in 1957 by the Chief
Commissioner of Lands and was thus the owner of the land. D had then obtained a lease of
the land in her own name.

• But on appeal to the Supreme Court, it was decided that D held the property as a
constructive trustee of the property for the sole beneficiary under the estate of S.
 Adomako Anane v. Nana Owusu Agyemang & Ors. [2014] 75 G.M.J. 1, S. C.

• In 1921, Kwabena Amankwah, the deceased maternal uncle of Hwirie acquired

the subject matter plot from the Chief Commissioner of Kumasi for a period of
21 years and constructed a swish building thereon. On his death intestate 6
months to the expiration of the lease in 1942, Hwirie in his capacity as the
customary successor inherited the property as a family property. In 1946,
Hwirie acquired the property from Asantehene in his own name for 99 years.
He pulled down the swish building and constructed a sandcrete building on the
land. He subsequently devised the building to some of the appellants as
beneficiaries. Whereas the respondents argued that the land and the property
thereon is a family property, the appellants contended that the family’s interest
in the property had extinguished upon the expiration of the lease in 1942. The
respondent lost at the High Court and succeeded at the Court of Appeal.
• The Supreme Court found that Hwirie held the land as a trustee for the family
and the lease obtained in his name was an unjust enrichment, dishonest,
inequitable , fraudulent, collusion and the like which were abhorred by
customary law.
 In Re Yalley (Dec’d); Yalley v. Kells [2001-
2002] SCGLR 762

Held: “Where a trustee obtains a renewal of a lease

in his name, he will be held a constructive trustee of
the new lease. The rule is founded on the principle
that a trustee, with certain exceptions, may not
either directly or indirectly made a profit from his
fiduciary relationship.
 Dzidzienyo v. Dzidzienyo [1962] 1 GLR 301
The Government of Ghana re-entered some plots of land leased
to E. A. Dzidzienyo for breach of covenant, but later re - offered to
him. He was too ill to accept the offer and died four months later, not
having accepted the re-offer. One of the administratrix of the estate
of the deceased person took a lease in respect of the land, not in the
name of the estate but in her personal capacity.

The court found that she held the lease as a constructive trustee for
the beneficiaries of the estate of the deceased and was not allowed
to use her position to benefit from the estate of the deceased.
Because a constructive trust is imposed by equity, there is no
prescribed form, hence even if it is not in writing, it can still be
brought under the scope of section 3 (1) (b) of the Conveyancing
Decree, 1973, as one of the exception to the requirement of the
Conveyance to be in writing.
 Resulting Trusts
 Resulting trusts (resultare = to spring back)
 This type of trust is also known as remedial trusts.
 If the settlor dies, the benefit of a resulting trust returns to the estate.
 Examples:
1. John conveys a house at Madina to Prince on trust for Ann, who is unknown to both, dead. There is a resulting trust of the
beneficial estate (the house at Madina) to John. (See Re Tilt [1896].
2. John buys a house in the name of his friend Job. Job will be deemed in equity to be holding it in trust for John on a
resulting trust. See Gagcoigne v. Thwing [1686]
3. A and B purchase a house in B’s name. a resulting trust arises in favour of A as a proportionate beneficiary (in relation
to the sum he had advanced). In

 Usually, it is not easy to differentiate implied trust from resulting trust, because in both cases, the intention of creating a
trust is only presumed.
 But the difference is that in the case of a resulting trust, the beneficial interest goes back to the settlor or the person who
provided the money for the purchase of the property or conveyed the property. But that may not be so in the case of an
implied trust.

 Assibey v. Commander Osei & Ors. [2010-2012] 2 GLR 724, S.C.

 In re Fianko Akotuah (Dec’d); Fianko & Anor. v. Djan & Ors. [2007-2008] 1 SCGLR 165 @ Holding 1
 In re Koranteng (Dec’d); Addo v. Koranteng & Ors. [2005-2006] SCGLR 1039 @ 1042
 Richards (Juliana) v. Nkrumah [2013-2014] 2 SCGLR 1578
 Gregory v. Tandoh & Hanson; Civil App. No. H1/13/2004, dated Fri. 14th July, 2006, C.A. (Per Kanyoke J.A.)
 Assibey v. Commander Osei & Ors. [2010-2012] 2 GLR 724, S.C.
Plaintiff’s late husband was a security working under the respondent (Commander
Osei) in Kumasi. The former gave money to the respondent to use his influence to
purchase a house for him. From the State Housing Corporation (SHC). In an action by
the plaintiff for declaration of title, the respondent contended that he personally paid
for the house. Respondent obtained judgment both at the trial Court and the Court of
Appeal. On appeal to the Supreme Court, it was found out that the plaintiff’s husband
provided for the purchase amount. And the Court decided that the Commander held
the property on a resulting trust to the estate of the plaintiff’s husband.

Kwantreng v. Amassah [1962] 1 GLR 241

A father conveyed his landed property to his daughter and the purpose was to enable her obtain a loan from a
bank to complete the building on the land. The court held that the father had conveyed the property to the
daughter to hold it in trust for him. So upon the death of the father, the daughter was deemed to be holding
the property as a trustee for herself and all other beneficiaries named in the father’s will to enjoy the said
property.

Hussey v. Palmer [1972]

X, an elderly widow, was invited to live with her daughter and son in law. She accepted, but found the
accommodation too small and an extra bedroom was built, X paying the construction costs. Following
arguments, X left the house and claimed the cost of the bedroom, based on a resulting trust.
Lord Denning held: “… I have no doubt that there was a resulting trust, or more accurately, a constructive
trust for X, and I would so declare.”
 In re Koranteng (Dec’d); Addo v. Koranteng & Ors.
[2005-2006] SCGLR 1039 @ 1042

“In essence, a resulting trust, in this context, is a legal presumption made

by the law to the effect that where a person has bought property in the
name of another, that other will be deemed to hold the property in trust
for the true purchaser. It is a trust implied by equity in favour of the true
purchaser of the estate , if he has died. The trust is regarded as arising
from the unexpressed or implied intention of the true purchaser.
Obviously, though for such a resulting trust to be implied, certain factual
preconditions must exist and the issue is whether on the facts of the
current case, a resulting trust may validly be implied. In the context of
this case the main factual precondition is proof that the beneficiary of the
resulting trust advanced the purchase money for the transaction. Thus,
for a resulting trust to be established, there has to be proof that the
purchase money was advanced by the beneficiary of the resulting trust.”
How does Resulting Trust occur?
a. Where an express trust fails to make a complete disposition (Like where the trust is not
properly declared or where the beneficiaries are uncertain), or
b. Where a person who pays the purchase price for property causes title to that property to
be taken in the name of another (not an offspring of the purchaser) who did not pay the
purchase price or provide any consideration for it.
How is resulting trust created?
1. Where the settlor disposes of the trust property and part or all the equitable interest is
not properly or effectively disposed of or part of the whole of the equitable interest
remains in him. Though title of the property is not vested in him, equity recognizes him
as owner of the property.
2. Where the settlor made a conveyance to a person who provided no consideration and
the settlor did not provide the use of the property (This type is not applicable to Ghana,
but England).
3. Where the property was acquired by a person who did not provide the purchase money.
This is the commonest type. Here the whole purchase price was provided by a person
other than the beneficiary. Equity will recognize such a person as the equitable owner.
Rebuttal of the Presumption
If there is evidence to show that the purchase money provided was
i. a gift,
ii. a loan or
 The Presumption of Advancement

 This is a common law presumption.

 There is the presumption of advancement when a father or a
person in loco parentis obtains a conveyance in the name of the
child for the benefit of the child absolutely.
 Presumption may apply in respect of a wife and not a paramour
(Ussher v. Darko [1977] 1 GLR 476 & Calvery v. Green [1984]).
 However, where the property was purchased by a wife in the
name of a husband, the presumption of advancement would not
apply (See Reindorf alias Sacker v. Reindorf [1974] 2 GLR 38);
Mensah v. Berko [1975] 2 GLR 198, H.C.

• Is the presumption not inconsistent with article 17 of the 1992

Constitution?
 Father to Son - Advancement

Osmond v. Hughes [1967] GLR 405 , C.A.

• Kofi Osmond, a cripple was the son of O.A. Osmond. In 1937 when Kofi was 10 years, his father acquired a lease of the
government land for him and promised to put up a house for Kofi because of his physical deformity. When the house could not
be built within the three years, Hughes who was then on retirement prepared a supplementary deed in the name Kofi Osmond,
wherein he was described himself as a ‘government pensioner’.
• Upon plaintiff’s father’s death in 1959, his sister who succeeded him claimed the property as part of the estate and proceeded to
collect the rent. The plaintiff claimed his father gifted the property to him. Defendant on the other hand insisted that Kofi
Osmand was an alias of Mr. Hughes.
• The trial Court entered judgment in favour of the successor and the Plaintiff appealed.
• The Court of Appeal found for the plaintiff that it was an advancement by Hughes to his son.

In Re Sasu (Deceased); Sasu v. Twum [1976] 1 GLR 23

• A man married under the Ordinance and had four children who were all infants at the time of his death. He acquired six houses
during his lifetime; two of which were in the name of one of his sons. In the course of the distribution of the estate, the
administrators ran into difficulties. In an application to Court, the defendant’s lawyer argued that since the deceased had six
children, one alone could not take two of the houses on the premise that they were acquired in his name. The Court found that
there had been an advancement. It was further held that nothing prevented a father from advancing one child at the expense of
the other provided, there was no fraud, duress or undue influence. “The act of advancement was one within the father’s right,
however unreasonable or unjust towards the others it might appear.”

See:
 Dyer v. Dyer [1788]
 Richards (Juliana) v. Nkrumah [2013-2014] 2 SCGLR 1577.
 Husband to Wife - Advancement
• A similar purchase for a wife by a husband would
raise the presumption, but not otherwise

• Oppong v. Oppong [1992] 1 GLR 83, C.A.

• Berchie Badu v. Berchie Badu [1987-88] 2 GLR 260.

• The presumption developed at a time when wives

were considered as part of the properties of their
husbands.
 Husband to Paramour – No Advancement

• Ussher & Ors. v. Darko [1977] 1 GLR 476

• What are the facts?: A prominent lawyer was married under the
Ordinance. He entered into an extra-marital relationship out of which
he had 6 issues with his mistress. He purchased land in the mistress’
name and developed it on his own. He rented out the rooms and
managed the building by himself. The mistress eventually sold the
house to the plaintiff, who initially wanted the tenants to attorn
tenancy to him. When they failed, plaintiff sued to have them ejected.
The trial court gave judgment for the plaintiff to evict the tenants.

• Issues? Does the presumption of advancement apply?

• Holdings?: No: since the beneficiary/purchaser was not a wife, but a

concubine or mistress.
 Wife to Husband – No advancement
• Reindorf alias Sacker v. Reindorf [1974] 2 GLR
38);

• Mensah v. Berko [1975] 2 GLR 198, H.C.

 Bennet v. Bennet [1879]
“ The doctrine of equity as regards presumption of gifts is this, that where one person stands in such
a relation to another that there is an obligation on that person to make a provision for the other,
and we find either a purchase or investment in the name of the other, or in the joint names of the
person and the other, of an amount which would constitute a provision for the other, the
presumption arises of an intention on the part of the person to discharge the obligation to the
other, and therefore, in the absence of evidence to the contrary, that purchase or investment is held
to be in itself evidence of a gift.
In other words, the presumption of gift arises from the moral obligation to give. That reconciles all
the cases upon the subject but one, because nothing is better established than this, that as regards
a child, a person not the father of the child may put himself in the position of the one in loco
parentis to the child, and so incur the obligation to make provision for the child … A person in loco
parentis means a person taking upon himself the duty of a father of a child to make a provision for
that child.
It is clear that in that case the presumption can only arise from the obligation, and therefore in that
case the doctrine can only have reference to the obligation of a father to provide for his child, and
nothing else. But the father is under that obligation from the mere fact of his being the father, and
therefore no evidence is necessary to show the obligation to provide for his child, because that is
part of his duty. In the case of a father, you have only to prove the fact that he is the father, and
when you have done that the obligation at once arises; but in the case of a person in loco parentis
you must prove that he took upon himself the obligation.”
– Per Jessel MR.
 Trusts of Perfect & Imperfect Obligations

a. Trust of Perfect Obligation: They are those trust

which are enforceable by or on behalf of the
cestui que trust or the object of the trust.

b. Trusts of Imperfect Obligation: Those trusts

which are not enforceable by or on behalf of any
cestui que trust. They are invalid because every
trust must have beneficiaries or objects, but here
there may be no such beneficiaries or objects.
 Naked Trusts
These may take two forms:
a. Fully Secret Trust and
b. Half Secret Trusts

Fully Secret Trust: It is one in which the instrument

or document conveying the property does not
disclose on the face of it that there is a trust.
Usually, extraneous evidence is needed to prove the
trust.
 How is fully secret trust created?
An instrument may be executed inter vivos creating a deed of
conveyance where a person may give another person, on the basis of an
oral or written undertaking or understanding between the transferor and
the transferee that the latter would hold the property in trust for a
particular beneficiary or object.

Bannister v. Bannister [1488]

Defendant sold his house at a fairly low price, upon an oral
understanding with the plaintiff (purchaser) that the defendant (vendor)
would continue to occupy the house rent-free as long as she desired. The
Plaintiff later brought an action to eject him to the defendant (vendor).
The Court held that the plaintiff held the property under a trust during
the vendor’s lifetime to permit him to occupy as long as he desired. The
court then refused the plaintiff/purchaser’s relief of an order for
possession.
 Half Secret Trust
• It occurs where the will or instrument conveying the property generally discloses the existence
of a trust, but the terms of the trust do not fully or sufficiently appear in the will or the
instrument. In this case, there may be an express direction that the property is to be held in
trust, e.g. subject to a document dated ……. or as discussed with the said trustee.
• Here, it is the details which is found else where.

ANY DIFFERENCE WITH FULLY SECRET TRUST?

• Yes: With the half secret trust, the will or instrument mentions a trust and anybody who sees it
becomes aware that a trust has been made. But in the case of a fully secret trust, no such
mention is made of a trust and the entire trust created must be ascertained from another
source.
Examples:
1. Where Jack wishes to keep secret his liaison with Eva, but intends to assist her financially after
his death, he may bequeath a legacy to his friend, Paul. Paul would have promised during the
lifetime of Jack that he would hold it on trust for Eva. In Jack’s will, he made no reference to
Eva or Paul’s promise made. - This is an example of fully-secret trust.

2. Jack in his will, directs that property is to pass to Paul ‘on the trust I have discussed with him.’
No detailed terms of that trust are stated in the will, no beneficiaries are named. In fact, Paul
had promised Jack that he would hold the property for Eva.- This is an example of half-secret
Trust.
 Limitations to Secret Trust

 Secret Trust is not enforceable unless the trust was communicated to

the donee during the lifetime of the donor.

 The secret trust can be communicated after the will has been made. See
Wallgrave v. Tebbs [1855]

 The donee must have accepted the particular trust or tacitly acquiesced
in carrying out the trust before the death of the donor. Here, silence
may be enough to constitute an acceptance. See Moss v. Cooper [1861].

 Where there is no communication of the trust, the donee or the

designated trustee takes the property after the death of the disposer as
the beneficial owner.
 How should the trust be communicated to the donee?
 It must be clear and definite.

What about if the devisee is merely told of the existence of the trust for which he is expected to hold the
property, without disclosing the details to him?
 That would not be a sufficient communication.

What are the said details required?

 The nature of the trust
 The terms of the trust
 The beneficiaries and object

What happens if the donee accepts a secret trust whose particulars are not disclosed to him?
 The donee cannot take it as a beneficial owner, but holds the property as resulting trust in favour of the
donor or his estate.

Why?
 Because the donee knew at the time of the gift that he was not supposed to take the property as the
beneficial owner of the property.

What if he takes it as his own because of the technical deficiency in the trust?
 That would constitute fraud on his part.

Any Authority ?
 Re Boyes; Boyes v. Carritt (1884)

• A testator asked his lawyer to prepare his will for him. He gave all his properties to the lawyer
absolutely and further appointed him as the sole executor. The testator who was away from
Europe had earlier informed the lawyer that he would want him to hold the property subject
to directions to be communicated to him by a letter upon his return from his trip in Europe,
and the lawyer had agreed to that. The testator could not send the said directions to the
lawyer before he died. After his death, two letters written by the testator were found among
his personal documents. They were unattested testamentary documents which he had
addressed to his lawyer. The testator had stated in that document that one Mrs. Neil Brown
should benefit from virtually all his property. The lawyer agreed that he was not a beneficial
owner, but was holding the property in trust. The testator’s brother who was his next of kin
challenged the trust that it was not effective because, it could not be communicated to the
solicitor/donee during the lifetime of the testator.

• The court upheld his argument that no trust was created in favour of Mrs. Brown because the
trust was not sufficiently communicated to the lawyer/donee during the lifetime of the
testator. On that premise, the trust in favour of Mrs. Brown failed.

• The lawyer could not also keep the property as being the beneficial owner, because that
would constitute fraud on his part, he, being very much aware that the property was not
meant for him. He was found to be holding the property as a trustee (not for Mrs. Brown),
but as a resulting trust meant for the benefit of the next of kin for the testator.
 Property transferred to two or more donees on a secret trust

Where a property is transferred to two or more donees on a secret trust and one accepts
the secret trust; are they all bound?
 It is the circumstances that will determine whether only that donee or all are bound.

JOINT TENANCY
• What if the gift was made on a secret trust to two or more persons as joint tenant and
one accepts before the making of the will or the document transferring the
instrument?
(N.B. - This implies the right of survivorship)
For a clearer understanding read: Dacosta & Ors. v. Ofori Transport Ltd. [2007-2008]
SCGLR 602 and Owusu-Asiedu v. Adomako & Adomako [2007-2008] SCGLR 591 @ 592.

 If one of the donees accepts the trust, it would be binding on all the donees.

Why?
 If a trust is not held, the donees will take the property as an absolute gift in joint tenancy. And if
that happens, the one who accepted the trust would end up becoming the absolute beneficial
owner, should the other donees pre-deceased him and this would amount to fraud on his part in
What if the donee who accepted the secret trust did so after the execution of
the will or the document transferring the instrument?
 Only the donee who accepted it is bound. The other donees are not bound. In Re
Stead [1900] – It was held that a secret trust intended to affect a gift which
on the face of it looks like an absolute bequest to two persons as joint
tenants, and which after the date of the will was communicated to and
accepted by only one of them, is not binding on the other if that other had
no notice of the trust until after the death of the testator, for, in that event,
the interest of the other person in the bequest will not be tainted with any
fraud in procuring the execution of the will.

What would be the consequence?

 There will be severance: The one who accepted would hold it as a trust and
those donees who were not communicated to about the trust or did not
accept will hold it as beneficial owners.

The End Result?

 They would end up holding the property as tenants in common, without the
 Is the position different in tenancy in common?
• Yes: Here, there is no right of survivorship. Each donee holds his undivided share of
the property which descends on his/her heirs after his/her death.
• Therefore, where a property is conveyed to two or more donees as tenants in
common and one of the donees accepted to hold it as a trustee, it is only that donee
who would be bound and it does not matter whether he accepted to do so before or
after the execution of the will or the instrument. The other donees would not be
bound.

Is the principle still applicable?

Its application is now fraught with difficulties by virtue of Section 14 (3) of the
Conveyancing Decree, 1973

The said Section 14 (3) provides:

“A conveyance of an interest in land to two or more persons, except a conveyance in
trust, shall create an interest in common and not in joint tenancy, unless it is expressed in
such conveyance that the transferee shall take jointly, or as joint tenants, or to them and
the survivor of them or unless it manifestly appears from the tenor of the instrument
What it means is that:
a. Presumption of a tenancy in common does not apply to conveyances in a trust.
b. So with trust, the old common law position of joint tenancy may prevail. See Hudson v. Hudson [1735].
c. How then do we apply section 14 (3) to a situation which holds a donee bound by a secret trust?

The argument now is ‘a merry-go round’

 To determine whether the transaction is a joint tenancy under the law (Section 14 (3), we need to be sure
that the transaction creates a trust.
 To determine whether there is a trust or not, we need to be able to determine whether it was a case of joint
tenancy or tenancy in common.
 If tenancy in common, then only the donee who accepted would be bound as a trustee of the secret trust.
 It has been argued out by Kludze that because section 14 (3) seeks to determine the interest of land taken
by a transferee, it is impracticable to apply it to the determination of the issue whether a secret trust has
arisen from an undertaking (acceptance) given only by one of the donees to hold the property on a trust.
Exception was made for the clear situation where the donor expressly spelt out whether the property
should be held as tenants in common or joint tenancy.
 The learned author further contended that regardless of the section 14 (3) of the Conveyancing Decree,
because equity presumes a tenancy in common as opposed to common law joint tenancy, and equity
prevails over the common law in times of conflicts, a tenancy in common should be presumed to avoid
fraud by and unjust enrichment of the donee who had accepted the secret trust.
 Do you agree with the learned Professor?

 Does statutory provision also not prevail over common law (including equity)?
 Fixed, Protective & Discretionary Trust

• Fixed Trusts involves an instrument stating the beneficial

interest each beneficiary is to take.

• Protective Trust is usually a trust for life or some lesser period,

which is intended to be determinable on the happening of
specified events; example: I devise my house at Amasaman to P
to hold in trust for my elderly daughter until she remarries and
to my second daughter for life and to my last son absolutely.

• Discretionary Trusts on the other hand, refers to the discretion

to be exercised by the trustees. Examples: who will benefit,
nature of the benefit etc.
 Simple & Special Trusts

• Simple trust is one which the trustee has no

active duties to perform. The trustee in such a
trust is known as a ‘passive’ or ‘bare’ trustee.

• A special trust on the other hand involves an

‘active’ trustee and it arises where the trustee is
appointed to carry out a scheme designated by
the settlor.
 Trusts ‘in the higher’ & ‘in the lower’ sense
 The phrase trust in the higher sense has been
used to refer to, e.g. A government duty which is
not enforceable in the courts. Example: the Bank
of Ghana & DKM story & the government of
Ghana promise.

 A trust in the lower sense is based on an equitable

obligation which is fully enforceable in the law
courts. See Tito v. Waddell (No. 2) [1977]
 Trusts created by Statutes

Trusts in Ghana are generally regulated by:

a. Trustees Act 1860
b. The Charitable Trusts Act 1869
c. Trustees Incorporation Act 1962 (Act 106)
d. The Securities Industries Act 1993 (PNDCL 333)
e. The Common law

The Trustees (Incorporation) Act, 1962 (Act 106) enables trustees of unincorporated
voluntary associations and bodies established for religious, educational, literary,
scientific, sports, social and charitable purposes to be incorporated and to acquire
immovable properties.
• After incorporation, it is the trustee (s) who can sue and be sued in the name of the
association.
• Registered trustees are issued with a certificate which may provide further details
like, the qualification and number of trustees, method of appointing new trustees,
the custody and use of official seal, the amount of immovable properties the trustees
may hold and the purpose for which the acquired lands may be used.
 Trustees Incorporation Act 1962 (Act 106)

Sections 1 – 4 provide:
“ (1) The trustees of any unincorporated voluntary association of persons or body established for any
religious, educational, literacy, scientific, sports, social, or charitable purpose shall apply, in manner
hereinafter mentioned, to the Minister for the certificate of registration as a corporate body.

(2) The Minister, having regard to the extent, nature and objects and other circumstances of such
body or association may grant a certificate accordingly, subject to such conditions or directions
generally as he thinks fit to insert in the certificate.

(3) Such conditions or directions may include, in particular, provisions relating to the qualifications and
number of trustees, their tenure and vacation of office, the mode of appointing new trustees, the
custody and use of the official seal, the amount of the land which the trustees may hold, and the
purposes for which the land may be applied.

(4) Upon the grant of the certificate, the trustees shall become a body corporate by name described in
the certificate, and shall have perpetual succession and an official seal and power to sue and be sued
in such corporate name, and subject to the conditions and directions contained in the said certificate,
to hold and acquire and by instruments under the official seal to convey, assign and demise any land
now or hereafter belonging to, or held for the benefit of, that body or association, in like manner, and
subject to such restrictions and provisions as the trustees might, without such incorporation, hold or
acquire, convey or assign, or demise the land for the purposes of that body or association.”
 The Capacity of Religious Bodies
• Dennis Adjei in his book, Land Law Practice and Conveyancing in Ghana also noted at page 49 thus: ‘Entities
such as churches cannot sue or be sued in respect of their properties except through their registered trustees
under the Trustees Incorporation Act, 1962 (Act 106)”.
• The learned judge and writer controversially added: “In cases where a church is not incorporated under the law,
the members may sue in a representative capacity over the property which is in danger.’

Critique:
• Upon the enactment of the Religious Bodies Registration Law (PNDCL 221), churches ceased to be bound
by Act 106 above. Churches were recognized as legal entities upon registration under PNDCL 221.

• Any Authority?
 Yes: Obeng v. Assemblies of God Church, Ghana [2010] SCGLR 300.

• What did the Supreme Court say?

 At holding (5) of the headnotes: “Before the enactment of the Religious Bodies (Registration) Law, 1989
(PNDCL 221), there was in existence the Trustees Incorporation Act, 1962 (Act 106). By virtue of section 4 of
Act 106, it was the trustees of the religious body registered under the statute that were vested with power
to sue and be sued in the corporate name of the trustees. However, section 9 (2) of PNDCL 221 vested the
power of registration of a religious body to sue and be sued in the corporate name of the body… On the
facts, once the plaintiff church had been registered as a corporate entity under the Religious Bodies
(Registration) Law, 1989 (PNDCL 221), the plaintiff church could not be denied the capacity which they
already had.”
 Why a settlor or testator may create a trust
1. To enable property to be held for persons who cannot hold the
legal title themselves in situations where the settlor’s interest or
title in the property concerned is legal;

2. To enable property to be used to benefit persons in succession, e.g.

settlements;

3. To enable two or more persons to own land or an immovable

property;

4. To promote a charitable cause and

5. To avoid or minimize the liability for various forms of taxation.

 Formalities for Creating a Trust
 No prescribed form or specific words required.

Megarry J. in Re Kayford [1975]

“It is well settled that a trust can be created without using the word ‘trust’ or ‘confidence’ or the like. The
question is whether in substance a sufficient intention to create a trust has been manifested.”

 It should not necessarily be a deed, but where it relates to the transfer of an interest in land, it is supposed
to be in writing in accordance with section 1 (1) of the Conveyancing Decree, 1973.
 The intent to create a trust must be there, but it must not be a general intent to benefit someone.

Jones v. Lock [1865]

 When a father returned from a business trip, he bought no gift for his nine year old baby. He later put a
cheque of £900 into the baby and said: “ I give this to baby, it is for himself.” The wife said, the baby might
tear it. But the father then collected the cheque back and said: “It is his own and he may do what he likes
with it.” The father collected it and put it in a safe. Later, the father told his solicitors that he wanted to
alter his will to provide for the benefit of the infant son. The father died in that same week and the cheque
was found in his safe not having been endorsed by signing it. the issue was whether it was a gift or a trust.
It was held on appeal that no trust was created and neither was there a gift. The reason being that the
money was not paid to the child. And because the father did not declare himself as a trustee of the cheque
for the child, his declared intention to confer a benefit on the child could not constitute a trust.
Mamavi v. West African Building Ltd. [1965] GLR 216
A man bought a house for his mistress as a gift. The Court
held it to be an absolute gift because there was no intention
of creating a trust.

Francis v. BWA Ltd. [1958]

The deceased opened a separate account as the ‘Miss
Maude Christian Memorial Fund’ and wrote a letter to the
Colonial Secretary of the then Gold Coast that, he wished
the money to be used by the Gold Coast Government to
equip the Maternity Ward of the African Hospital at
Sekondi. The Court held that it constituted a trust for which
he was a trustee of the money for the Government.
 On the formalities of a trust, be mindful also of the nemo dat quod non habet
rule.
 The general rule is that, if you cannot hold a property, you cannot create a
trust.
 So the person must be of sound mind
 Infants can create a trust but they are only voidable and not void. The minor
can repudiate it during his infancy/minority or a reasonable time upon
attaining the age of majority.
 If the disposition is not in his interest, it can be set aside (So can the trust be
set aside).

Who then is an infant here?

• 18 years or 21?
• Common Law age for infants – Below 21 years.
• Wills Act – 18 years.
• N.B. – The 18 years is specifically for capacity to make a will, but it does not
change the common law position of who an infant is.
• Until, Statutory Change, no need to stick to the age in the Wills Act
 The Three Certainties
a. Certainty of the words used
b. Certainty of the subject-matter
c. Certainty of the beneficiaries or the object.
(N.B. These do not apply to implied, constructive or resulting trust)

1. Certainty of the Words

 No particular form or expression is required, but the manifestation of an intention to create a trust must be
present.
 No need for technical words.
 Usually, the term ‘in trust’ is used, but there is no need to use the word ‘trust’ (We only infer from the
language used).
 The Courts have held that the words creating the trust must be clear, imperative and unambiguous.
 Where the words are not certain, no trust arises.

Lamber v. Lamber [1871]

A testator gave his estate to his widow ‘to be at her disposal in any way she may think best for the benefit of
herself and her family.” The widow gave part of her property outside the family in her will. The family went to
court claiming that the words used above by the testator had created a trust in favour of the widow and the
family alone and that she could not dispose off any property outside the family. The Court held that the words
used by the testator were not imperative enough to create a trust and therefore the widow held the property
absolutely and was at liberty to dispose of it outside the family.
What happens in that circumstance?
The Donee takes the property as his own and no trust arises.

Precatory words: They are words expressing a wish, ‘hope’, ‘desire’ or ‘request’ etc.
 No trust is generally inferred from such words now.
 In ancient times, the Court of Chancery accepted such precatory words to
constitute a trust.
Knight v. Knight (1940)
Langdale MR held that a trust could arise if the settlor or testator ‘recommended’ or
‘wished’ the donee to dispose of the property in favour of another.
Harding v. Glyn [1739]
X gave property to Y (his wife) in a will and did ‘desire Y at or before her death to give
such leases, houses, furniture … unto and amongst such of his own relations as she
should think most deserving and approve of.” It was held that a trust had been created
by the use of these words.
 The modern approach by the courts
The modern approach by the courts is however
different.

1. Gyasi v. Quaigraine [1963] 2 GLR 161

2. Sey v. Sey [1963] 2 GLR 220

3. Re Adams and Kensington Vestry (1884)

 Gyasi v. Quaigraine [1963] 2 GLR 161
The testator appointed his nephew as the ‘sole heir’ of all his movables and immovables and
administrator of all his will. He explained that ‘by administrator’ I do not mean to place him co-
jointly with my four executors, but only to administer also to the needs and requirements of the
members of my household and those of my dear relations abroad in the same way and manner as
in life, I would do myself as particularized in my said will.”
The testator did not explain what he meant by ‘sole heir’. The Court held that the words were
precatory and do no create any trust. The nephew as sole heir took absolute beneficial interest in
the properties. It was further held that an intended trust would have also failed for lack of certainty
of object; because the objects alleged to be benefitted were too vague to make an enforceable
trust.

Sey v. Sey [1963] 2 GLR 220

A testator in his will gave a house to his brother Kwamina Abadoo and stated: “My brother Kwamina Abadoo is not to sell this
house for any reason thereby to cause my children to go astray. He is to look after my children well and live with them peaceably
and quietly as I have been doing.”
One of the children of the testator contended that Kwamina Abadoo was holding the property in trust for the children of the
testator including himself. The Supreme Court rejected the argument on ground that what the testator said was only an admonition
to the donee to look after his children. (Precatory words – so it was not a trust). The Court observed that in construing the words,
the whole relationship of the parties was to be ascertained, to know whether the testator intended to create a trust or not.

Re Adams & Kensington Vestry [1884]

A man gave all his property to his wife absolutely ‘in full confidence that she will do what is right as
to the disposal thereof between my children.” it was held that no trust was created for the children
and so the widow took the property for herself.
 2. Certainty of the Subject- matter
 For a trust to be valid, the subject-matter must be expressly defined or designated; otherwise, no trust arises.
 In that case, the intended subject-matter would revert to the settlor. E.g. where A has 5 houses at Mateheko and he just
indicates that he has appointed B to hold his house at Mateheko for C. It would be unclear which of the houses the settlor
meant and the trustee B cannot be vested with title to any of the five houses, so C will not receive any of the houses.
• Again, words like ‘the bulk of my said residuary estate’ would be vague to satisfy the requirement of certainty.

Sprange v. Barnard [1789]

A testator gave money (£ 300) to her widower for his sole use, but added: “At his death, the remaining part of what is left,
that he does not want for his own wants’, should be divided equally between the testatrix’s brother and her two sisters. The
Court held that the widower was entitled to all the money, as no trust could arise in favour of the brother and sisters of the
testatrix for want of certainty of the subject-matter.

In Re Jones [1898]
The testator’s statement: “All parts of my … estate as she shall not have sold or dispose of’ was held that the subject-matter
was so uncertain to constitute a trust.

Boyce v. Boyce [1849]

A testator attempted to create a trust of “all the other of my freehold houses which my daughter Maria shall
not choose and elect.’ It failed as trust for uncertainty of the subject – matter.

 It is desirable that where the beneficiaries are two or more, each of the beneficiaries’ proportion of the
property must be spelt out with certainty in the trust instrument. In the absence of that, the maxim,
equality is equity would save the trust.
 Where the subject-matter is certain, but the interest in the beneficiaries cannot be ascertained, there will
be a resulting trust in favour of the settlor.
 3. Certainty of the Beneficiaries
 The beneficiaries or objects of a trust must be ascertainable.
 The scope of the dependents must be delimited or defined,
when it occurs in a will.

 In Gyasi v. Quaigraine, a gift to ‘members of my household and

those of my near relations abroad’ was held to be vague to be
enforced as a trust.
• Objects relates to charitable trusts; like a trust for the benefit
of religion, education or eradication of poverty. In a charitable
trust, the scope may be a little wider than in a private trust.
• And where the object is unclear, obsolete or illegal, the court
applies the ‘cy - pres’ doctrine. By that, the court tries to
validate trust by considering the nearest object indicated by
the testator or settlor.
 The Position of Trustees
Who qualifies? – Any person eligible to hold a property, like,
a. A corporation, if its regulations so permits.
b. An infant (N.B. Common Law allowed it and Ghana has not departed from it, but there
are some limitations which do not make it expedient to appoint a minor trustee – If he
disposes off the property, it can be set aside and again, he cannot be guilty of breaches
of the trust committed by him during his minority, apart from fraud).
c. A person for other beneficiaries (E.g. A for B & C)
d. A person for himself and other beneficiaries (E.g. A for A, B & C)
e. Persons of which the sole beneficiary is also included as one of the trustees (E.g. A, B &
C for only A).
f. Two or more persons as the trustees for themselves as the only beneficiaries (E.G. A & B
for A & B).
g. But, a person cannot be a trustee of a property which he is the sole beneficiary (E.g. A
for A is wrong). Why? Because trust connotes duality of ownership (Legal owner &
Equitable owner). However, in this scenario, the same person would be both the legal
owner and the equitable owner.

What then will happen in a situation like that? There would be no trust and the property
would go to the transferee as the absolute owner.
 Number of trustees
 In Ghana no limit
 Under section 77 of the Administration of Estates Act, 1961 (Act 63), the maximum number
of administrators or executors is 4.
 If a minor is a beneficiary in a will, the executor cannot be one.

Unanimity of Trustees
 Per the unanimity rule, all the trustees are to act – Equity recognizes no ‘sleeping’ trustees
(So deeds of the active trustees bind the non- active ones and they are all saddled with the
same liability to the beneficiaries). In appropriate cases, he may be able to sue the active
trustee for an indemnity.
 A co-trustee cannot escape liability from incurred by his co-solicitor-trustee, unless on all
the facts it is reasonable to infer that he deferred to the solicitor’s superior knowledge.
 A non-active trustee may be liable for not taking steps to prevent a breach of trust by the
active trustees, since a dissenter can frustrate the attempts by his colleagues to commit a
breach of trust.
 Minorities: Trustees act unanimously and not by majority. It is only in charitable trusts that
the majority at a properly constituted meeting can bind all the others or where the trust
instrument allows the majority to act.
 A trustee as a general rule, cannot delegate his duty to others, but he may appoint an agent
to be paid out of the trust fund. E.g. a lawyer or a stockbroker.
 Termination of Trusteeship

Several modes:
1. Disclaimer
2. Retirement
3. Replacement
4. Removal

Disclaimer
 A person cannot be compelled to accept the office of trustee against his wishes.
So at the time of his appointment, he can refuse to serve. This is called
‘Disclaimer.’
 The Disclaimer must be complete and not partial. Hence, one cannot disclaim
and retain the estate or any benefit that goes with the estate.
 Where there is a disclaimer, the trustee cannot perform the responsibility again,
unless he is re-appointed.
 Most of the authorities suggest that the disclaimer ought to be by a deed.
However, failure to act over a long time has been held to constitute a disclaimer.
 Once he meddles in the trust property, he is deemed to have accepted.
 Retirement
 Just as one cannot be compelled to act as a trustee, so he cannot be compelled to
remain in office.

 For a good reason, he may ask to be relieved of the office at any time. This release
is what is known as ‘Retirement.’ – which is, a discharge from further
responsibility and liability under a trust.

 Generally, a trustee who has accepted his office cannot retire, unless there has
been a replacement.

 It is the retiring trustee who bears the cost of his replacement in the case of an
unreasonable retirement.

Any limitation to retirement?

Yes: A trustee cannot retire unless;
1. He is expressly permitted by the trust instrument,
2. By the Beneficiaries,
 Removal
By?
1. Statute: In Ghana, the Public Trustees Ordinance, (No. 24 of
1952) provides for the removal of a private trustee by the court.

2. The Court in the exercise of its inherent jurisdiction (suo motu).

3. The trust instrument may spell out how and when to remove a
trustee.

• Here too, where his removal is as a result of misconduct, or the

trustee’s request for removal is unreasonable, he may be
compelled to bear the cost of the action resulting in his removal.
 Duties of Trustees
Introduction:

 Trustees are in a fiduciary relationship with the trust and the beneficiaries and this implies that
he must act with utmost diligence in the discharge of his duties (Ablakwa v. A.G. [2012] 50
G.M.J. 1 @ 46)
 They are to act honestly and apply the same degree of diligence as a prudent man would exercise
in his own private affairs, otherwise he would be liable for losses.
 They are not however liable for accidental losses or depreciation in the value of the property if
the trust fund had been properly invested (Investment must be only be in government securities,
public funds and other investment authorized by the trust or the settlement).
In Re Chapman [1892] – The
executors who held property as the trustees exercised their discretion to postpone the sale of
foreign railway bonds, but the value subsequently depreciated. The Court, per Lindley L.J. held
that the trustees were not liable because they exercised their discretion honestly.
 A trustee has onerous responsibilities, but his benefits are few.
 Usually family members, friends, close associates and religious leaders may be willing to act as
trustees.
 Sometimes too, professional trustees like lawyers, banks and insurance companies may
undertake the work of a trustee where there is an express provision in the trust instrument for
their remuneration.
 The Duties
The first duty is to carry out the directions of the trust as contained in the trust instrument.

a. Trustee is to secure the property, by immediately taking possession without delay. (If the trustee
defaults or delays in taking such a step or institute legal action and the action becomes statute
barred or otherwise irrevocable, he will be liable for breach of trust unless he can show a well
founded belief that such an action would have resulted in a failure or would have been a fiasco).

b. Duty to account to beneficiaries as to all reasonable information of how the trust property has
been dealt with or invested.

c. Duty to allow beneficiaries inspect all title deeds and documents relating to the trust. And if they
are in doubt, they may apply to the court for direction.

d. Duty of loyalty: Trustee has a duty of undivided loyalty to the beneficiaries. He is not to engage
in self-dealing and must avoid conflict of interest in the management of the trust property.

e. Duty of impartiality: Where there is more than one beneficiary, he is to give due attention to
each of the beneficiaries’ interest.

f. Duty not to commingle the trust property or assets with his personal property or assets.
 Powers of Trustees
1 Power of sale (Either by a private contract or public auction or according to the mode of sale as
prescribed by the trust instrument).

2 Power to issue receipts for payments made in respect of the trust property.

3 Capacity to sue and be sued in respect of the Trust Property. See Order 4 Rule 13 of the High
Court (Civil Procedure) Rules, 2004 (C.I. 47).

4 Power to insure the trust property, even though the mere failure to insure will not amount to a
breach, unless it can be shown that the trustee did not exercise reasonable care of the property. In
Khoury v. Jojo [1956], it was held that the trustee’s failure to insure amounted to negligence in
failing to take a reasonable care of personal effects under trust, where the trustee feared a civil
commotion and had insured his own property against such a risk, but did not so insure the trust
property.

5 Power to compound liabilities – Enter into a compromise, accept composition for debts and agree
on time to pay the debts.

6 Power to appoint delegates by appointing agents when necessary, especially when specialized
knowledge and expertise is required. (Be mindful of the general doctrine – Delegatus non potest
delegare).