Equity notes exam PDF

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Summary of equity notes...

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DISPOSITIONS ASSIGNMENT Questions: - Is the property legal or equitable property - Are there rules against the assignment - Is the transfer legal or equitable assignment - Is the transfer voluntary or for consideration Assignments at Law 1. Old System Titles – deeds, registration – s38 (deeds for people), s51A (execution of deed by corporation) 2. Torrens titles – registration, indefeasibility 3. Goods – gifts/sale of goods 4. Debts and choses in action – s12 Conveyancing Act – Norman v FCT (intention) Equitable Assignments 1. Future property – Rule in Holroyd v Marshall – no specific performance if fails 2. Equitable assignment of legal property for consideration – requirement for writing? If so, part performance may save an oral contract 3. Voluntary equitable assignment of legal property that is assignable at law - – Milroy v Lord, Corin v Patton, Costin v Costin 4. Voluntary equitable assignment of legal property that is not assignable at law – part of debt or chose in action – rules in Milroy v Lord etc do not apply 5. Equitable assignment of equitable property – requirement of writing? *Intention is Key! No particular form of words necessary - Burridge v MPH Soccer Management – intention was clear - Comptroller of Stamps v Howard-Smith – no assignment effective, it was merely an authorisation 1 – Future Property  Is it future or present property  If future property, must be described with sufficient particularity to permit its identification when it does eventuate – Tailby v Official Receiver  Assignment will not be valid if at the time the property eventuates into the hands of the assignor, the court would not order specific performance – Holroyd v Marshall - Rule in Holroyd v Marshall - Is it present or future property:  Norman v FCT – future property – dividends/loan o voluntary deed between husband and wife – husband to transfer 2 x items of property to his wife. 1 being interest in a loan, 2 being dividends from certain shares. o Held – dividends and loan not effective as they are future property and there was no valuable consideration  Shepherd v Commissioner of Taxation – present property - royalties o Inventor entitled to royalties, by voluntary deed he assigned the interest o Held – was effective present property  Everett v Commissioner of Taxation – present property – partnership profits o Assigned a fraction of his share in a partnership along with share of partnership profits

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o Held – effective present property assignment  Booth v Federal Commissioner of Taxation – present property – landlord rent o Landlord assigns percentage of the right to receive rent o Held – present property Nature of assignee’s rights  Re Lind o Assignee – receives the property, Assignor – assigns the property o Debt or similar to debt – If assignor goes bankrupt and then discharged is the debt discharged? Lind borrowed from 2 separate sources, he had expectancy under his mums Will which he used as security, then goes bankrupt. He then borrowed money from 3rd source, and assigned expectancy from Will as security. Does the 3rd source have priority over the other 2 loans (assignees)? o Held – no, first 2 assignees had priority and survived the bankruptcy o Assignee of future property obtains an equitable interest in the property immediately and automatically upon the property coming into existence or into the possession of the assignor – assignee rights are proprietary in nature o

Section 23C Conveyancing Act

Principles - Intention is key – no particular form of words are necessary TRUSTS Constructive Trusts Principles: - Trusts is imposed by law (courts) - Intention is not a necessary element of the trust, as it is for express and resulting trusts - Remedy (discretionary or institution (certainty) - Time of behaviour vs time of order by the court How they differ to express and resulting trusts - No fiduciary duty obligation - No requirement for certainty of subject matter – Giumelli v Giumelli (court remedy was $ instead of 50% of the farm) Scenarios where constructive trust arises - Incomplete contract for the sale of property – Lysaght v Edwards (specific performance, unconditional and identified property) - Incomplete gifts – Corin v Patton, Costin v Costin - Fraudulent transactions - Secret trusts - Mutual wills - Estoppel - Breach of confidence – constructive trust a major remedy for this

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Common intention to deal with property Breach of fiduciary duty Constructive trusts against 3rd parties o Trustees de son tort o Knowing recipet o Knowingly assisting a breach of trust Stolen property Moneys paid by mistake Homicide Unconscionable conduct – Muschinski v Dodds Family court context REMEDIES

Tracing Principles: - Must be a pre-existing fiduciary duty - Claimant must have equitable interest in the property prior to breach of fiduciary duty - Property must be in hands of the defendant - Property must exist and be identified - Can be mixed property Must read Foskett v McKewn & Caledonia Declaration Principles: - Finality is the main element - Order granted by court – states true nature of the law of the applicants rights duties and interest - S.75 Supreme Court Act Rules -

Applicants must have ‘real interest’ in the matter – show that your rights are being affected Utility – declaration must have some sort of affect on the rights and obligations of the parties

Specific Performance Principles - Main remedy by which contractual rights are enforced - Forces defendant to perform their contractual obligations (mainly contract law) - 2 x situations – executory (contract isn’t yet complete) OR executed (most of the contract complete, still outstanding obligations) Rules -

Must show 2 x elements otherwise specific performance fails 1 – Contract for valuable consideration 2 – Damages are inadequate Then look at discretionary factors!

Contract for valuable consideration – what is valuable consideration? - Falcke v Gray – what is valuable consideration - Dougan v Ley – object of beauty, rarity – followed UK case - Consideration mustn’t just be adequate or nominal – but doesn’t have to be market value Inadequate damages - Contracts for sale of land o Damages almost always inadequate as land is unique o Loan Investment v Bonner – land is unique, no exact substitute for it - Contracts to pay or lend money – usually damages are adequate except if you cannot get another mortgage or loan Contracts for benefits of a 3rd party - Must be a contractual party – 3rd parties cannot sue for specific performance - Coulls v Bagos – husband provided the consideration but she was a party to the contract – she was able to sue for specific performance - Linden Gardens Trust v Sludge Removals – if not party to the contract you can ask a party to the contract to sue on your behalf Discretionary factors as to whether you get a specific performance granted - Personal services contracts – i.e. employment contract – employer cannot force employee to work - Constant court supervision – Argyll Stores case - Hardship – Unconsionable hardship cause – see Falcke v Gray - Lack of mutuality – minors cannot sue for specific performance - Plaintiff in substantial brief and/or they are not ready/willing or able Injunctions Principles - Order made by courts – either restraining or enforcing - Jurisdiction o Exclusive jurisdiction – equitable issue/equitable rights o Auxiliary jurisdiction – common law damages inadequate but awarded in equitys auxiliary jurisdiction. Plaintiff must establish common law damages inadequate and they had a right - Plaintiff must have a right – Talbot v Norman – abortion case – no jurisdiction therefore no injunction Types of injunctions - Mandatory injunctions - restorative o Mandatory restorative injunction – compels the defendant to repair the consequences of some wrongful act they committed – Plaintiff must show where wrongful act had not occurred by merely threatened, they would have obtained a prohibitory injunction o Redland Bricks v Morris 1. Grave damage will occur to Plaintiff in future 2. Damages at common law not adequate 3. Costs to defendant – if acted unreasonably injunction can be granted even if cost of remedial work is out of proportion BUT if defendant acted reasonably and would be in hardship – must weigh up against loss suffered by Plaintiff

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4. If injunction granted, must be clearly worded so defendant knows what to do Mandatory injunctions – enforcing o Compels defendant to do some positive act that they promised to do for valuable consideration o Must satisfy agreement is specifically enforceable and it is just and equitable to gran injunction and would have attracted remedy of specific performance Perpetual injunctions o Granted after a full hearing – classified according to period of time for which order is to remain in force Interlocutory injunctions o Provisional order made before court proceedings – enforced until court trial o Interim injunction – emergencies usually 24 hours – made without giving notice to defendant o Interlocutory injunction only granted after defendant has been given notice so they can resist the claim – ‘inter partes’ hearing o Undertaking as to damages - Condition to granting an interlocutory injunction is plaintiff must give undertaking to damages – protects the defendant in case court later rules inunction shouldn’t have been granted. If plaintiff refuses undertaking then interlocutory injunction not granted – First Netcom v Telstra

Injunction to enforce negative stipulations in a contract Lumley v Wagner - Famous opera singer - Her Majesty’s theatre – 3 month contract – had negative stipulations that she couldn’t sing anywhere else - Covent Garden theatre – negotiated before start of other contract - Her Majesty’s theatre – sought and obtained injunction – she could not sing at Covent Garden but injunction did not require her to fulfil obligations at Her Majesty theatre...