Equity and Trusts - introduction to law of equity and trusts PDF

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introduction to law of equity and trusts...

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EQUITY AND TRUSTS -- - CASES -- - LEGISLATION -- - JOURNAL ARTICLES & LAW COMMISSIONS & BOOKS -- - TESTS AND PRINCIPLES

LECTURE ONE – INTRODUCTION TO EQUITY AND TRUSTS LEARNING OBJECTIVES:  

What is equity? Why do we have it?

Equity – Notes on Jurisdictions  

The English legal system applies in many jurisdictions around the world. Mostly the rules are the same – cases are interchangeable o E.g. – Hong Kong and Canada and New Zealand https://www.lawteacher.net/free-law-essays/equity-law/two-jurisdictions-oflaw-and-equity-law-essays.php  Mason A, “The place of equity and remedies in the contemporary common law world” (1994) LQR 238.

Equity – What is it? Moore v Sweet (2018) SCC 52 – Supreme Court of Canada (What does this case tell us about equity?) Full facts for Moore v Sweet (2018) SCC 52 - https://www.scc-csc.ca/case-dossier/cb/37546eng.pdf

A person named as an irrevocable beneficiary of a life insurance policy doesn’t always have a right to keep the insurance money, the Supreme Court has confirmed. A third party may have a right to the insurance money if there has been “unjust enrichment.” https://www.jstor.org/stable/4508037? seq=1#metadata_info_tab_contents This case was about what happens when someone has a pre-existing right to an insurance policy, but someone else is named as the irrevocable beneficiary. The majority said that in this case, the beneficiary was unjustly enriched and could not keep the insurance money.

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Aristotle (384–322 BC) wrote that “all law is universal but about some things it is not possible to make a universal statement which shall be correct”.

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As such, equity is “a correction of law where it is defective owing to its universality”.

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Aristotle, Nicomachean Ethics (see Book V) - https://www.studocu.com/esar/document/murdoch-university/equity/resumenes/equity-exam-notes2014/2908752/view o Equity corrects the law but does not replace it o Some universal doctrines can be explained in terms of dilemma of universality in law. o Australian model of equity (institutional equity) differs from Aristotle’s notion of equity o In a nutshell, this is pretty much the case today, and the case as it was in Oxford’s Case – it is impossible for a set of laws to act fairly if they need to be universal; need a mechanism to correct the situation where they act unjustly.

Why do we need equity? -

‘The cause why there is a Chancery is that men’s actions are so diverse and infinite, that it is impossible to make any general law which may aptly meet with every particular act and not fail in some circumstances… The Office of the Chancellor is to correct men’s consciences for frauds, breach of trusts, wrongs and oppressions, of what nature so ever they may be, and to soften and mollify the extremity of the law’ – The Earl of Oxford’s Case [1615] 21 ER 485, 486 (Lord Ellesmere LC) English equity was originally developed by the Lord Chancellor in the Court of Chancery

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So, we need equity to temper and mitigate the common law. Robyn’s description of Equity – ‘Equity is the body of legal principles which supplement and complement the common law, so as to create a more flexible and just legal system.’ Equity and Common Law do not fight each other, but run parallel; equity supplements the Common Law, helping it to work better.’

Equity – What is it? • •

… “since adherence to principles of ‘law’ does not invariably produce justice, equity is necessary”. Simonds v Simonds, 45 NY 2d 233 (1978), 239 (Brietel CJ)

What test was used to determine whether an alternative, equitable judgment should be issued? • Test of unconscionability • https://www.lawteacher.net/free-law-essays/equity-law/concept-of-unfairnessunconscionability-equity-law-essay.php • In general, an equitable judgment can be made where the defendant has acted unconscionably • ‘That when a Judgment is obtained by Oppression, Wrong and a hard Conscience, the Chancellor will frustrate and set it aside, not for any error or Defect in the Judgment, but for the hard Conscience of the Party’. • The Earl of Oxford’s Case (1615) 1 Ch Rep 1; 21 ER 485, 487 (Lord Ellesmere) • Lord Ellesmere in the Earl of Oxford’s Case (1615) 1 Ch Rep 1 said that equity is to “correct men’s consciences for frauds, breach of trusts, wrongs and oppressions… and to soften and mollify the extremity of the law”.

https://www.lawteacher.net/free-law-essays/equity-law/conflict-betweencommon-law-and-equity-equity-law-essay.php - Earl of Oxford case essay. “Equity operates on the conscience of the owner of the legal interest.” Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 705 (Lord Browne-Wilkinson) Conscience is not clearly defined – it is a moral-legal construct embodying fairness, equality, and stopping exploitation (https://watermark.silverchair.com/gqm015.pdf? token=AQECAHi208BE49Ooan9kkhW_Ercy7Dm3ZL_9Cf3qfKAc485ysgAAAq8w ggKrBgkqhkiG9w0BBwagggKcMIICmAIBADCCApEGCSqGSIb3DQEHATAeBglg hkgBZQMEAS4wEQQMqKKcFQ8URejTWjkjAgEQgIICYpwL1NZY5IXpb5kwQ7 xptZ1VJdJrxmJzhKHgXcnWkutZpD5_5Q-mUTsG_w9YH4byJUHET1UBRhm33Zp62ZEiWio8Xapn18YRAwI4rnxTkM47zA0s8xvgWVBpOEmjTltOTsJAnwD3PYVO1q4umm9wWW8lOPQqujgOSeDmzsfb6cKZx5fYduB2lJYhjwkCo6w4iNB9XAm9gSFe9eY5lOcq9VmLJYH yTfNpQG63wEeCDSpnDGSn2bgGrWZNBjm239Q5REMfn0tLsO4cx2jtJTJqea9yAr YKJetyAsoJYtc7uJ3gkLYf1pJzdaiPG0ZuxnwZ69RNbeXVyfcGtnySHlark7ax97ERzP9iDVv8DLdHDU0oewbhqaGi1Ufk-QTltNHMHLmmQOb3n1z_ZrqkeWrkJNH_Cp2zpg9Q4JHwQm4E2QXE2ocuwvHlTFwyfxHVOz1Xqjsw0nLxiGcm9DSy5 e8zanv0FiQ5sFNmjXezdwM6IeZ6k0BpNwhYk3XTTO5WUkvXIGqkqYexvnRb3Q O3gpvChsv_kIarTcRuwRdy7MwrXmT0DsNezfrWRf3FDkHmDRwVkmciyKG6kxk FbxUiHkMIQYCQH0MXX50x_br2o3_urbCY1WSFLUCCZDuqwgpR9rcNuC6BV2H8DN1hhmjcuxTU_yYB1mOvVED0ErycG74TtJr95AfaiY4mzuNXsIolSJbwa zZIL7GRp_Zplcb3xJTUkFy6m6zDQ0Q_xz92YOOaNt_dOVnHf4GXU3akJrtXPmB cOjlJmN6cZIPI2MCTvoWRa6sZoaWvJRu-oP843xks) – Journal Article – Mike Macnair – Oxford Journal of Legal Studies, Vol 27, No.4 (2007), pp 659-681. •

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Key points about equity’s conscience Almost all of the medieval Lord Chancellors were senior clerics in the Church A great deal of English equity is actually based on medieval church law, which in turn was based on Roman law Whist English equity is secular, the notion of conscience relates back to a theological/ethico-moral idea of justice, fairness, equality, proportionality, social justice, and preventing the exploitation of vulnerable parties

What is Equity Today? • • • • • •

Since the Middle Ages, equity has developed into a proper jurisdiction in its own right Today, equity is a body of rules, principles, and remedies that help make up English law (alongside the common law) Equity and the common law therefore supplement each other

‘The life of the law has not been logic; it has been experience … its form and machinery, and the degree to which it is able to work out desired results, depend very much upon its past.’ – Oliver Wendell Holmes, The Common Law). Equity was never invented – it evolved from a series of ‘fortuitous’ ‘accidents of history’. In 1875, the old common law and chancery courts were merged

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We no longer speak of legal/equitable procedural rules or rules of evidence – they are the same (Senior Courts Act 1981, Civil Procedure Rules 1998) What remains is substantive equity • Trust law is the main example • Other property rights (such as freehold covenants) Remedial equity – to correct the ‘harshness’ of the common law • Undue influence – to set aside contracts someone has been pressured into • Injunctions – to order or stop conduct

Development (Continued from above heading) •

Equity’s life story is the history of the Court of Chancery. This falls into three stages: • Origins and the Medieval Period; • Formative Period (Tudors); and • Period of Systemisation during the 18th and 19th Centuries. • Each stage tells you something different about equity and how it works today.

Equity’s Maxims Law Teacher: Do not Reference. The Maxims Of Equity These are the general legal principles that have been adopted threw following precedent in regard to equity. These maxims are the body of law that has developed in relation to equity and these, help to govern the way equity operates. All maxims are discretionary in nature and courts may choose whether they wish to apply these principles. 1. Equity will not suffer a wrong to be without a remedy: This maxim developed as common law had no new remedies only monetary damages. Maxim must be treated with caution as today’s laws are made by the Oireachtas. Maxim can be used by the beneficiary of a trust whose rights were not recognised by the common law. Equitable remedies such as injunctions or specific performance may be given. 

(Patterson v Murphy 1978 ILRM 85) injunction

Attempts to alter this maxim in recent times by Lord Denning in (Hussey v Palmer 1972) were unsuccessful. 2. Equity follows the law: Courts will firstly apply common law and if this is not fair then an equitable remedy will be provided. This maxim sets out that equity is not in place to overrule judgements in common law but rather to make sure that parties don’t suffer an injustice.

3. He who seeks equity must do equity: A remedy will only be provided where you have acted equitable in the transaction. This maxim is discretionary in nature and is concerned with the future conduct of the plaintiff. 

(Cheese v Thomas 1994)

4. He who comes to equity must come with clean hands: This maxim is linked to the previous maxim and relates to the past conduct of parties. They must not have had any involvement in fraud or misrepresentation or they will not succeed in equity 

(Overton v Banister 1844) A beneficiary failed in their action against the trustees to pay her back the assets of the trust she had already received as a result of a misrepresentation of her age.

5. Delay defeats equity: Laches is an unreasonable delay in enforcing a right. If there is an unreasonable delay in bringing proceedings the case may be disallowed in equity. Acquiescence is where one party breaches another’s rights and that party doesn’t take an action against them they may not be allowed to pursue this claim at a later stage. These may be used as defences in relation to equity cases. For a defence of laches courts must decide whether the plaintiff has delayed unreasonably in bringing forth their claim and the defence of acquiescence can be used if the actions of the defendant suggest that they are not going ahead with the claim so it is reasonable for the other party to assume that there is no claim. (Nelson v Rye 1996) 6. Equality is Equity: Where more than one person is involved in owning a property the courts prefer to divide property equally. Prefer to treat all involved as equals. In the case of a business any funds left over from dissolution should be divided equally.

7. Equity looks to the intent rather than the form: Principle established in (Parkin v Thorold 1852). This maxim is where the equitable remedy for rectification was established this allows for a contract to be corrected when the terms are not correctly recorded. This maxim allows the judge to interpret the intentions of the parties if the terms aren’t recorded properly. 8. Equity looks on that as done which ought to have been done: The judges look at this contract from the enforceable side and the situation they would be in had the contract been completed 9. Equity imputes an intention to fulfil an Obligation:

If a person completes an act that could be regarded as fulfilling an original obligation it will be taken as such. 10. Equity acts in personam: This maxim states that equity relates to a person rather than their property. It applies to property outside a jurisdiction provided that a defendant is within the jurisdiction. 

(Penn v Lord Baltimore 1750) English court ordered specific performance on land in the US.

11. Where the equities are equal, the first in time prevails. Where two parties have the right to possess an object the first one with the interest will prevail. 12. Where the equities are equal, the law prevails. Where two parties want the same thing, and the court can’t honestly decide who deserves it most they will leave it where it is. Condensed Version Below: • • • • • • • • • • • •

Equity will not suffer a wrong to be without a remedy Equity follows the law Where there is equal equity, the law shall prevail Where the equities are equal, the first in time shall prevail Delay defeats equities He who seeks equity must do equity He who comes to equity must come with clean hands Equality is equity Equity looks to the intent rather than the form Equity looks on as done that which ought to be done Equity imputes an intention to fulfil an obligation Equity acts in personam

Drawing it all together: • • • • • •

Common Law and Equity are two separate but linked bodies of principles, rules, and remedies Common law operates on the principle of reasonableness Equity operates on the principle of unconscionability Equity originated as a means to provide alternative justice where the common law failed Equity is more focused on judicial discretion and fact-based justice; common law remains focused on certainty and predictability Continues to be a great deal of tension between the two

SEMINAR ONE INTRODUCTION:

What is a legal estate? How do you evidence ownership of a legal estate? What is the TR1 form? -

A legal estate is an estate which is capable of subsisting at Law, such as a freehold estate or a leasehold estate.

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Evidence of ownership of a legal estate is usually by form of deed.

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The use of a TR1 form is to transfer the whole of the property in one or more registered titles. It may also be used to transfer unregistered property which is to be registered for the first time. To transfer part of a registered title, then the TP1 form will need to be used in replacement of the TR1 form.

What is registered land and what are the key principles behind the Land Registration Act 2002? -

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Registered Land is land that has been registered with HM Land Registry, this is often triggered when the land has been sold and the land was not registered prior. Or when the vendor passes away this may be triggered and the land consequently registered. The key principles behind the Land Registration Act 2002 are to promote a clear, coherent and fully transparent system, however, there are major issues with the Land Registration Act 2002 which were not rectified since the previous Act.

What happens when two or more people jointly purchase a legal estate? How do you distinguish between a joint tenancy and a tenancy in common?

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If a property is held as joint tenants then the joint owners are both entitled to the whole of the equity. However, when only one joint tenant remains he is entitled to the whole of the equity and the trust comes to an end. Joint tenancy is where both parties own the whole of the property, not a quantified share. Tenancy in common can bring clarity to parties where one party has made a larger contribution to the purchase price and want the recognition for that. In registering as tenants-in-common the parties will agree on (with help from a solicitor) what proportion of the property each of them owns. In furtherance, the term survivorship is unique to situations where a property is held by joint tenants and is a key different between joint tenants and tenants in common. Survivorship ultimately means that in the event of the death of one of the owners, the property will automatically pass to the surviving person and will become entirely their property....