A transaction which is encompassed within the details outlined in 2.7 has been explained in detail via a two-trust mechanism in Barclays Bank Ltd v Quistclose Investments Ltd. In this case, the Court stated that a primary trust is formed to carry out a lender’s stipulated instructions as to how the loaned monies are to be used coupled with a secondary trust which would take effect if the primary trust failed. Modern law has since favored a singular trust scenario created through an express or resulting trust in favour of, and protecting the intention of, the settlor. The degree to which an express or resulting trust arises must be determined through intention, and if the intention is to benefit a third party through some contractual arrangement between the settlor and the trustee — Gummow J commented in Re Australian Elizabethan Theatre Trust that the mutual intention of the settlor and the trustee should be examined in combination with ‘the essence’ of their bargain.
