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I agree that Lord Hoffman's reasoning is in terms of an express, not a Quistclose trust, coupled with a power. He also thought, but did not explain (at para. 13) that "Sims also owed fiduciary obligations to Mr Yardley in respect of the exercise of the power", whereas the logic of Lord Millett's speech is otherwise.

Paul Todd

-----Original Message-----

From: Eoin O'Dell
Sent: 09 July 2002 00:26
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG:] Twinsectra and Quistclose

Hello all,

I have just read Alistair Speirs "Escape from the Tangled Web" casenote on the House of Lords judgment in Twinsectra v Yardley [2002] UKHL 12.

Alistair writes that their lordships "were unanimous in holding that the Court of Appeal was correct to reverse Carnwath J on the question of whether the loan, coupled with Sims' undertaking, created a trust. The only speech to provide a detailed analysis of this question was that of Lord Millett (HL, paras. 68-103) ... Lord Hoffmann's less detailed analysis reached the same conclusions as Lord Millett's and is in no way inconsistent with it (see HL, para. 13)".

To the extent that Alistair is arguing here that Millett wrote for a unanimous House on the issue of the Quistclose trust, I don't think that I can agree. In particular, I think that Millett and Hoffmann were doing very different things.

I agree with Alistair that Millett chose to treat the trust as a Quistclose trust, and that he took an essentially intentionalist approach to it which he then undercut it all by insisting that it is resulting on Chambers pattern.

However - as I read Twinsectra, and here I would differ from Alistair - I think that _only_ Millett chose to treat it as a Quistclose trust. In my view, Hoffmann treated the relevant trust simply as express (see paras 13-17; for example, according to Hoffmann in para 13, in a classic express trust comment, everything turned on the terms of the undertaking) and, as Alistair himself observes, in this Slynn and Steyn concurred (see paras 2 and 7). I think that what Hoffmann did is to say that the kind of trust which arose in the case itself is an express trust. Now, this means either that he didn't really direct his mind to or enter onto the Quistclose debate or that he thought that that the Quistclose trust is an express trust. I think the first explanation is the more plausible. Either way, his approach is fundamentally different from Millett's resulting trust approach. Confusingly, Hutton agreed with the reasons of both Hoffmann and Millett (para 25), but since their approaches are so different, I can get nothing from this. If this is right, then Millett's views do not form part of the ratio of Twinsectra. Consequently, the Court of Appeal in the subsequent Carlton v Goodman [2002] EWCA Civ 545 was quite right to treat the whole thing as an open question.

I'd like to know what others think on this issue.