Formalities, Constitution, Illegality and Trustees
Teaching narrative
After the three certainties, ask whether any statutory formality applies and whether the trust has been completely constituted. In Queensland, s 11 of the Property Law Act 1974 is central where land or an existing equitable interest is involved. Section 11(1)(b) concerns proof of a declaration of trust of land, while s 11(1)(c) concerns dispositions of subsisting equitable interests; s 11(2) preserves resulting, implied and constructive trusts.
Constitution asks whether the property has been effectively vested in the trustee or the settlor has validly declared themself trustee. Equity generally will not perfect an ineffective gift simply because the donor intended generosity. Corin v Patton is essential when deciding whether the transferor has done everything necessary on their part.
Illegality and public policy require a structured analysis rather than an automatic refusal of equitable relief. Australian law examines the purpose of the statute or rule, the nature of the illegality and whether denying relief advances the relevant policy.
Queensland trust administration changed materially with the Trusts Act 2025 (Qld), which commenced on 28 April 2026 and repealed the Trusts Act 1973. The current Act codifies and reforms important trustee duties and powers. For example, s 63 imposes a duty to act honestly and in good faith; ss 64-65 deal with accounts and records; s 69 confers investment powers subject to the Act and trust instrument; and s 82 gives trustees broad powers in relation to trust property, subject to statutory duties and the trust instrument.
Rule and exam map
- Property Law Act 1974 (Qld) s 11: writing rules for interests in land, declarations of trust of land and dispositions of existing equitable interests.
- Constitution: identify whether the property has been transferred to the trustee or the settlor has effectively declared a trust.
- Trusts Act 2025 (Qld) is the current Queensland trust statute from 28 April 2026.
- Separate powers from duties: a trustee may have power to act but still breach a duty in the way the power is exercised.
Leading authorities
Leading authority on completion of voluntary transfers and when equity regards the donor as having done everything necessary.
Classic statement that equity will not recharacterise an ineffective mode of gift merely to perfect the donor’s intention.
Leading Australian authority on illegality, resulting trusts and the policy-sensitive approach to equitable relief.
Reinforces objective trust construction and the consequences of a formally expressed trust.
Problem-solving method
Issue. Identify the equitable relationship, property or transaction and break it into sub-issues.
Law. State the exact doctrine, any applicable statute, and the authority that explains the rule.
Application. Apply each element to the facts, address the strongest counterargument, then identify the consequence or remedy.
Conclusion. Give a reasoned result and identify any fact that could change the outcome.
Tutorial-style problem
A settlor signs a written declaration that land is held on trust for two children, but later argues that the declaration was never intended to have legal effect. Separately, a trustee proposes a speculative investment said to be permitted by the trust deed.
Model answer
For the declaration, apply s 11 of the Property Law Act 1974 (Qld) and the objective approach in Byrnes v Kendle. For the investment, distinguish the existence of a power from compliance with duties. Apply the current Trusts Act 2025 (Qld), the trust instrument, the duty of good faith and the statutory investment framework. The fact that an act is within power does not answer whether it is a proper exercise of that power.