Q&As

Can a Quistclose Trust arise over the land which was purchased with the money that was loaned for the specific purpose of buying the subject land?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 03/11/2020

The following Property Q&A produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • Can a Quistclose Trust arise over the land which was purchased with the money that was loaned for the specific purpose of buying the subject land?

A Quistclose trust is a trust which arises in specific circumstances where the court, in circumstances where a payee receives monies on terms that they are to be applied only for a specific purpose, treats the payee as holding that money on trust unless and until the specific purpose has been fulfilled. The trust is named after the House of Lords decision in Barclays Bank v Quistclose but the concept has been recognised for a much longer period. In the eponymous case, the House of Lords held that monies in a bank account against which Barclays had sought to exercise a right of set off were trust monies as they had been paid over for a specific purpose and Barclays was therefore not entitled to do so.

A Quistclose trust is therefore a trust in re

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