Quistclose trust meaning

Eraaya Lifespaces Ltd v Elara Capital Plc and other companies [2025] EWHC 1506 (Comm) What are the practical implications of this case? This judgment confirmed that, when a settlement agent or comparable intermediary receives monies from bondholders destined for an issuer, and lacks any unfettered authority to deal with those monies, being obliged instead to follow another party’s directions, that intermediary will typically hold the monies on trust, for the bondholders or alternatively the issuer, pending distribution to the intended recipient in due course. Depending on the facts, the trust may take the form of an express trust or a Quistclose trust; it is immaterial whether documentation or written terms explicitly describe it as a trust, or whether the intermediary has been told it is holding the funds on trust. The court must decide, on the evidence, the character of the trust and the identity of its beneficiary or beneficiaries, as circumstances require. In reaching that conclusion, the court may review pertinent contractual terms and, where apt, have...

In this issue Key developments and horizon scanning Leasing property Property management Residential property Statutory compliance Transferring property Easements, rights and covenants Property development Property taxes Property in Wales Property in Scotland Additional property updates this week Daily and weekly news alerts New and updated content Trackers Key developments and horizon scanning Consultations re privately managed estates The Ministry of Housing, Communities and Local Government (MHCLG) has begun a standalone consultation to bring Part 5 of the Leasehold and Freehold Reform Act 2024 into effect via secondary legislation. The plans would create a regulatory regime giving freehold estate homeowners in England and Wales fresh rights to examine and contest estate management charges, hold estate managers to account, and receive clearer information on estate management. The consultation also asks for views on removing disproportionate enforcement measures used against homeowners who fall into arrears with estate management charges. It closes...

In this issue: Transferring property Leasing property Easements, rights and covenants Property development Residential property Statutory compliance Environment, energy and buildings Agricultural property Property in Scotland Additional property updates this week Daily and weekly news alerts Trackers Transferring property TOLATA 1996—court can take account of wishes of minority beneficiaries In Savage v Savage [2024] EWCA Civ 49, the Court of Appeal, in line with Bagum v Hafiz [2015] EWCA Civ 801, [2015] All ER (D) 249 (Jul), reaffirmed that section 15 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) identifies the considerations the court must address when making an order under section 14 concerning how trustees exercise their functions, or the nature or scope of a person’s interest in the trust land. The Court of Appeal also clarified that the list is not restrictive and does not preclude the court from weighing other relevant factors...

This Practice Note examines what a purpose clause in a facility agreement is. It also outlines what Quistclose trusts are, the circumstances in which they arise, and why they are relevant to purpose clauses in facility agreements. Where appropriate, it signposts relevant provisions in: Precedent: Facility agreement (term loan): single company borrower—bilateral—with or without security or a guarantee the Loan Market Association (LMA) investment grade multicurrency term facility agreement with/without observation shift (the LMA investment grade facility agreement) the LMA senior multicurrency term and revolving facilities agreement for leveraged acquisition finance transactions with/without observation shift (LMA leveraged facility agreement) The other LMA standard form facility agreements, eg the LMA Senior Single Currency Term Facility Agreement for Real Estate Finance Multiproperty Investment Transactions, also include sample purpose clauses. LMA documents are available to LMA members on the LMA website. What is a purpose clause? Most facility agreements include a clause setting out the purpose(s) for which the loan proceeds must be...

Resulting trusts represent one of the three species of trust that do not need to be declared or evidenced in writing at all. The others are constructive and implied trusts, though it is arguably doubtful whether any implied trust exists that is not in reality either a resulting trust or a constructive trust (‘implied’ in this setting often being used simply as a synonym for ‘resulting’ or ‘constructive’). Categorisation of resulting trusts Resulting trusts are either presumed or automatic. A presumed resulting trust arises where: there is a voluntary transfer of property by one person to another; or title to property is placed in the name of someone other than the person who provided the purchase money or other consideration for the acquisition An automatic resulting trust arises where the disposing party has failed to dispose of the entirety of their legal and beneficial interest in the property that is the subject of the disposition. Presumed resulting trusts Voluntary...

The common law trust has long played a role across a range of commercial structures; yet its deployment is subtle and tailored to the circumstances of each arrangement. Although the equitable foundations of classic trusts remain pertinent, courts increasingly accept that the intricate rules devised for traditional trusts cannot simply be transplanted into commercial trusts. A trust possesses distinctive qualities that differentiate it from other legal relationships—such as contract, agency and bailment. This Practice Note highlights several established and potential applications of a trust that is deliberately constituted to achieve a commercial objective. Trusts arising by operation of law regardless of the parties’ intentions, or emerging from litigation, fall outside the scope of this Practice Note... What is a trust? See Practice Notes: An introduction to trusts for commercial lawyers and Nature and classification of trusts—the nature and classification of trusts. For details on the meaning of a trust, the various categories of trust and the elements required for validity. This Practice Note also outlines the role of...

This [ Deed OR Agreement ], dated [ • ] 20[ • ], is entered into by the Parties: 1 [ insert name ], a company incorporated in England and Wales with registered number [ insert company number ], whose registered office is at [ insert address ] (the [ Settlor OR Lender ]); and 2 [ insert name ] of [ insert address ] (the [ Trustee OR Borrower ])...