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Criado por cadhla_corrigan
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The History of Equity:The Court of Chancery used to hear Equitable cases for the King whom had a duty to hear pleas from his subjects. It was created by the medieval Chancellor (the King's minister) to hear cases which the Common law could not.Common law was limited to the jurisdiction of the courts and only certain writs and remedies could be applied: equity was to "fill in the gaps" or "gloss over" common law. Equitable cases were decided on the basis of 'conscience': it acts in personam (acts upon a person's conscience). CC v AB: Judge has discression as to the remedy. Eady J claimed "One must guard against allowing legal judgements to be coloured by personal attitudes."
Equitable Remedies: Specific performance Injunction e.g. Mareva Injunction (freezing injunction) Rescission- restoring the parties to the positions they would have occupied if no contract had ever been formed. Account of Profits- defendant must surrender any profits made. Attorney General v Blake: Blake was a double agent whom wrote a book concerning the British Government when they were in contract with him. Held, the British Government could be awarded an account of profits.
Judicature Acts and Fusion:The Judicature Acts 1873-75 were passed in order to abolish the confusion and inconvenience of a dual system of courts (Common Law and Chancery). One High Court was established in which the judges were to apply both the rules of common law and equity in the same court. If there was a conflict between equity and common law, equity was to prevail. This was only procedural fusion: the "two streams of jurisprudence do not run the same channel, but run side by side. the waters do not mingle." (Ashburner)Tinsely v Milligan: Partners bought a house together but put it under one name to fraudulently claim benefits. Under common law the defendant could use illegality as evidence whereas equity would use illegality to completely overrule the claim. A fusion approach between the two was adopted. Eves v Eves: Lord Denning claimed equity could still bear new rights and rules although this was denied by Bengall J as this would mean equity is not sure or settled. ↳Re Polly Peck: Lord Neuberger claimed that although there is a power in equity to form new rights it should not be done without due care. Note: If Parliament is insufficient in legislating in a sector e.g. Cohabitation, the courts can form new rights and be 'creative'. Equity acts to right a wrong and any plaintiff must come with 'clean hands' therefore relief is discretionary unlike that of Common Law.
Equitable Maxims: Equity sees that as done what ought to be done He who comes into equity must come with clean hands Equity acts in personam Between equal equities the first in time shall prevail Equity avoids a multiplicity of suits Equity abhors a forfeiture Equity will not complete an imperfect gift: donor has made an imperfect gift i.e. lacking the formalities required at common law, equity will not assist the intended donee Equity will not suffer a wrong to be without a remedy: he one that has been wronged has the stronger hand and thus has the capacity to ask for a legal remedy Where equities are equal, the law will prevail: Equity will provide no specific remedies where the parties are equal, or where neither has been wronged. Equity delights in equality: where two persons have an equal right, the property will be divided equally e.g.. tennants in common Equity follows the law: equity will not allow a remedy that is contrary to law, equity works as a supplement for law and does not supersede the prevailing law. Equity will not aid a volunteer: equity cannot be used to take back a benefit that was voluntarily but mistakenly conferred Equity will not allow a statute to be used as a cloak for fraud: equity prevents a party from relying upon an absence of a statutory formality Equity will not allow a trust to fail for want of a trustee: if there is no trustee, whoever has legal title to the trust property will be considered the trustee or the court may appoint a trustee.
The Origins of Trusts:Feudal tenants maintained land under a tenure which gave him rights to land under the King's hierarchy. A feudal tenant could convey his property to X as co-owners on use. This meant he could benefit X without X coming full owner of the land (only legal title owner) and X could then further move on to benefit Y under a use.The Statute of Uses 1535 cut out X thus the property could only be conveyed from the tenant to Y directly. In order to overcome this trusts were created for X to hold property on benefit to Y. X, as trustee, would hold the property on trust for Y (the beneficiary) and still maintain the legal title of the land. Trust= a relationship created through an individual in which one or more persons hold the individual's property subject to certain fiduciary duties to use/protect the property for the benefit of assigned others. Note: only 4 legal owners can be conferred upon a land whereas trusts allow any amount of beneficiariesMinors cannot hold a blackacre therefore it must be held on trust until they come off age.
Types of Trust: Express ↳Bare: the beneficiary has an immediate and absolute right to both the capital and income held in the trust Fixed: the beneficiaries and their share or portion in the trust have been determined, the beneficial interest of each beneficiary has been clearly defined. Discretionary: the trustee has the discretion as to whom among the Beneficiaries will and will not benefit, as well as the extent of their benefits as it has not been specified by the settlor. Resulting: the trust property "bounces back" to the settlor forming an implied trust Constructive: a trust imposed by law by reason of the trustee's unconscionable conduct. Under UK law constructive trusts are not remedial, they are institutional.
The Three Certainties: Certainty of Intention Certainty of Subject Matter Certainty of Objects Paul v Constance: Constance had a bank account in his name containing damages awarded to him after a work injury and lottery winnings. He claimed to his mistress, Paul, that the money was "as much yours as mine". Help, these words showed an intention to share the money and so an express trust was formed. Note: for an express trust to be formed there must be a clear intention to create the trust in either words or actions. Westdeutsche: there must be identifiable trust property i.e. there must be certainty of subject matter. Mills v Sportsdirect.com: Mills had entered into an agreement with sportsdirect.com for the sale and repurchase of shares. When an agreement was finally agreed Mills went into administration before they could pay Sports Direct. Held, the beneficial ownership of the shares had passed to Sports Direct despite the fact Mills had failed to pay therefore there was a certainty of objects.
The Beneficiary Principle:The trust property must be held on trust for identified beneficiaries or objects.Re Astor: equitable obligations are enforced upon a trustee as long as there is [a beneficiary] someone to enforce an equitable right i.e. Non-charitable trusts must be for a beneficiary. Re Endacott: outside of trusts for animals, graves and saying private masses (and hunting foxes, till the Hunting Act 2004) no trusts can be made for purposes that are non-charitable. If a trust is non-charitable it must have ascertainable beneficiaries. Saunders v Vautier: Wright had been left stock, trust and dividends by his uncle which was to be held on trust until he turned 25. Upon turning 21, Wright asked for the complete and immediate transfer of all the property and for the trust to be terminated. Held, beneficiaries may end the trust if they are sui juis (full social and civil rights, over age limit, and has mental capacity). If there are multiple beneficiaries, through the doctrine of acceleration, they must be unanimous in the property being transferred to only one beneficiary and must renounce their interest in the trust.
Formalities and Constitution:S53 LPA 1925: b) formalities must be adhered to depending on the trust in question.Jones v Lock: father wrote an un-enforced (signed) cheque for his baby son. Although there was an intention to benefit the child, there was no intention purposefully create a trust: the intention was that of an outright transfer. When creating a gift, if it is not properly completed with the required legal formalities, a trust could be found as equity would not "perfect an imperfect gift".
Powers of Appointment v Trust Duties:A trustee has the duty to carry out the trust, it is mandatory as the beneficiaries often have rights in the trust. Powers of appointment allow for a selected person to use their authority to dispose of certain property under a will. These powers are not mandatory. A donee has the power donated to them, this is a discretionary power and subsequently they cannot be forced to exercise the powers. There are often fewer powers than that of a trustee. The court will intervene if the power is exercised fraudulently or excessively. Re Combe: Son of testator was given a power of appointment which was confined to relations- this was not mandatory therefore the donee (the son of the settlor) had choice as to whether he exercised the power or not and to whom of the relations he could exercise it to. General powers: complete discretion Special powers: property is left to the benefit of a specified class of objects Hybrid powers: express exclusion of a certain class of objects Objects of a power of appointment hold no rights in the property unless the power has been exercised in their favour or promised to be exercised to them. They merely hold a hope that the powers will be exercised in their interest. This is unlike trusts where the beneficiaries continuously exercise a constant equitable interest in the property.A donee does not have to carry out a power unless they are also a fiduciary. This means they hold duties in equity which may restrict or expand the power/ how the power is to be used. The duties must be complied with when exercising the power.
Beneficiary's Interest:Shell v Total: explosion caused by Total's negligence damaged pipe system which was held on trust for Shell. There was damage to property and subsequent economic loss- as long as the beneficial owner can join the legal owner in proceedings, the beneficiary can claim for damages despite not having possession of the property. Equity cannot deny a remedy to the beneficial owner of the property when the legal owner is their trustee.
Utility of Trusts:Trusts allow for complex ownership, co-ownership and successive ownership which are not available at law. Commercial utility: Barclays Bank v Quisclose Investments: lending of money for a specific purpose and is held on trust otherwise. This is an effective way of protecting loans and is a very useful commercial setup.Property Management: trusts give the opportunity to give the property on trust to someone who is more suited to looking after and managing the property.Tax Avoidance: tax liability can be shifted by placing a property in a trust. IRC v Duke of Westminister: every man is entitled to order his affairs so the tax.. is less than it should be.
Trusts v Other Legal Concepts:Contract: Trusts only impose duties to one party, the beneficiary owes no duties to the trustee unlike a contract in which rights and duties are owed by both parties to one another. Debt: once a debt it paid the debt is gone/ extinguished, with a trust there will always be equitable rights within the propertyBailment: legal relationship in which one agrees to look after another's property for safe keeping. The owner retains legal title unlike that in a trust. In a trust the trustee gains the legal title of the property. Ashby v Tolhurst: man left car in carpark, when he came back the parking attendant had allowed a stranger to take the car. This baliment and the claimant retained full legal title and so the attendant could not be held liable. Administration of an estate: Commissioner of stamp duties v Livingston: a widow who gains benefit under her husband's will is not liable to tax of the property during the administration of the estate. Until the estate is completely administered the widow gains no right in the property. This is unlike a trust in which the beneficiary holds a constant equitable right in the property. Companies and Unincorporated associations: companies are incorporated (they have their own legal personality) unlike unincorporated associations which are held by the members and so have no legal personality. These are both different ways of holding a property other than on trust.
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