Introduction to trusts

HideShow resource information

Burrows 'English Private Law'

Equity in principle follows the common law. Rights in equity but not common law include: restrictive covenants over land, contracts or options to purchase certain types of legal property rights. The mortgagors equity of redemption doesnt exist at all in common law. 

Equity looks upon that which ought to be done. Sir George Jessel- 'the moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchase of the estate sold and the beneficial ownership passes to the purchaser.' 

Doesnt apply to chattels. 

One of the most common reasons why a property right is equitable rather than legal is because of equity's more relaxed attitude to the issue of formalities. 

1 of 10

Burrows 'we do this at common law but that in equi

Meagher, Gummow and Lehane condemn the belief that common law and equity are merged as the fusion fallacy. 'The fusion fallacy involves the conclusion that the new system was not devised to adminster law and equity concurrently but to fuse them into a new body of principles comprising rules neither of law nor equity but of some new jurisprudence concieved by accident, born by misadventure and nourished by sour but high minded wet nurses.' 

Anti fusion- Judicature Acts fused the administration of courts but did not fuse the substantive law. They sit aside one another. Clashes between them are very rare. Equity prevails when they do clash.

Fusion- argues that the fusion of the administration of the courts, while not dictating the fusion of the substantive law, rendered this a realistic possibility. Many examples of inconsistencies. A harmonised rule that has features of both equity and common law is at the least acceptable and may represent the best way for the law to develop. Burrows favours the fusion view. Shouldnt be slaves to history. Wants to take the debate further and say that on the assumption that fusion is a good thing, we are not doing enough to eradicate the needless differences in the terminology used and the substantive inconsistencies between equity and common law. 

2 of 10

Burrows 'we do this at common law but that in equi

Three categories- 1) where equity and CL coexist coherently and where the terminology differences remain useful. To describe the trust you need to refer to both. 2) where CL and equity exist coherently but there is nothing to be gained by adherence to the historical labels. eg Mistake in contract and duress and actual undue influence, just different types of pressures or threat, doesnt need to involve equity. 3) comprises most of civil law. In this category common law and equity dont exist coherently. Need a change in the law to combine elements of both. 

Example- compensation- primary remedy for common law wrongs is compensatory damages. Courts have wide discretion. Equitable compensations aim is to compensate loss. Want to put claimant in position as if it didnt happen. Has exactly the same aim. Some think restrictions on equitable compensation such as remoteness doesnt exist. 'The common law rules of remoteness and damage do not apply.'- Browne Wilkinson. Millet thinks they do. Equity shouldnt go its own way. Should be regarded as identical in aim and application. 

3 of 10

Auchmuty 'The Fiction of Equity'

Depicted as the opposite or compliment of common law, flexible where the law is strict, discretionary and humane. This is Posner's view and is central to his claim that equity embodies the ethic of care and speaks for women. She says equity's flexibility is an illusion. Until Denning there had been no new equitable devlopments for 100 years in 1952. Says that Denning began to use equity in a flexibility that borders on recklessness. 

Denning's flexible use of equity has been replaced by a more cautious approach. When landmark equitable decisions are made you can be sure that the new principle will be cut down eg contractual licences being binding. HoL has a habit of reducing application of equitable principles to narrow set of circumstances which makes a mockery of equity's pretension to be flexible. Protaganists have often been the CoA and the HoL representing the forces of progress and reaction. 

Denning created deserted wives equity. This was welcomed by women at the time but HoL struck it down. Public outcry led to a watered down parliamentary version. Diplock's constructive trust formulation in Gissing established the guiding principle from which the courts have no deviated in 30 years. Refusal to change shows there is a limit to how much equity can be permitted to disturb the legal and social status quo. 

4 of 10

Auchmuty 'The Fiction of Equity'

Lloyds Bank v Rosset- Bridge said anything less than financial contribution is unlikely to do. Most claimants were women and much less likely to make contributions. Couples financial situations tend to fall in gendered ways: women use their money for household goods, expenses and children and men use theirs for mortgages. Judges know this. Yet despite outcry after Burns v Burns in 1984 the HoL was content to perpetuate the injustice of equitys treatment of women. 

Equity like law operates so as to maintain patriarchal power and by denying women access to assets they have worked for contributes substantially to their disempowerment. 

5 of 10

Neuberger 'Has equity had its day?'

Evershed- 'the function of equity was to fulfil the common law, not so much as to correct it.' Refinement, not invention.

Wyatt- 'the jurisdiction of equity must always arise from the defect of common law to do substantial justice between the parties, the necessity of an equitable jurisdiction in England arises from the same cause.' 

Mansfield- 'equity is not presumed to be past the age of child bearing.' 

Denning- Eves v Eves- 'equity is not passed the age of child bearing.' He managed to develop traditional equitable principles to deal with contemporary commercial problems. He birthed the search order by refinement and extension of principle by precendent of a 174 year old equitable power. 

Neuberger- 'equity is not presumed to be of an age beyond child bearing.' US courts equitable powers stopped developing in 1789. 

Did the Judicature Act bar equity from inventing? meant to 'put an end to all conflicts of jurisdiction.' 

6 of 10

Neuberger 'Has equity had its day?'

Denning thought there was substantive fusion as he said in Central London Property Trust- 'at this time of day it is not helpful to try and draw distinctions between law and equity. They have been joined together now for over 70 years and the problems have to be approached in a combined sense.' Diplock in 1977 made clear he was in the substantive view. Many critics of this thinking that substantive fusion is a fallacy which has done untold damage to English equity. Described Diplocks judgement United Scientific as the 'low water mark of modern English jurisprudence.' 

Lord Brandon in the HoL- 'the principle of the Judicature Acts, while making important changes in procedure, did not alter and were not intended to alter the rights of the parties.' Mummery- to effect 'procedural improvements in the administration of law and equity in all courts, not to transform equitable interests into legal titles or to sweep away the rules of the common law.' Neuberger agrees. Jessel- 'was not any fusion, it was the vesting in one tribunal the adminstration of Law and Equity in every cause, action or dispute.' Difficult to concieve how the rules of equity are meant to prevail if they had been made the same. 

Judicature Commissioners in 186 made it clear their intention was to consolidate the jurisdiction of the various superior courts into one court, with all the power and distinction of those courts. 

7 of 10

Neuberger 'Has equity had its day?'

Jessel- 'they have been established from time to time- altered, improved and refined from time to time.' By using equity's inventiveness to create new principle or legal doctrine it can intrude into policy making. Maybe necessary due to badly thought out legislation or avoidance of contraversial areas. Neuberger in Stack said that legislating should be left to Parliament. The majority thought Parliament would continue to duck the issue. 

Equitable invention was more acceptable when Parliament sat infrequently. Evershed- 'judicial legislation is apt to be a dangerous usurption of Parliamentary functions.' 

Equity invention has in practise, if not in principle has its day. But can develop with judges refining, extending and fashioning its characteristics. Reluctant to say that equity will never create a wholly new principle. 

8 of 10

Conway 'Equity's Darling' 2001

Equity has been called a protector of women kind. Disabilities of marriage were not directly addressed by equity, mainly dealt with through legislation. Equity's traditional role of allieviating the harshness of common law was perhaps more evident in protecting the rights of wives than women generally. 

In term of inheritance it can be argued that common law as a better friend to women than equity, and that equity by way of an alliance between dynastically minded land owners and conveyancers was deployed to deprive women of their rights which the common law would have provided. 'It was on the large rights that the common law gave to females that land owners had their eyes fixed, and against which their conveyancing strategies were fundamentally designed.' 

Married women if they were to have anything of their own would have to rely on equity. 'during marriage women had no property at their disposal.' Equity could offer some relief by safeguarding some property to the wifes sole use. Still the trustees had control and management of the property.' 

When parties had agreed to separate privately equity would enforce the financial aspect, whereas common law would not recognise them. The rights of the married women in England effectively ceased to exist as far as the common law was concerned and equity availed only a little. 

9 of 10

Conway 'Equity's Darling' 2001

as far as the common law was concerned, and equity availed her only a little. Equity was the barest recognition that married women existed at all, if only through the medium of trusts. 

Until the removal of legal disabilities attaching to wives was bought about by 19th C reform which saw the widening of the franchise and other social change. Parliament recognised the separate existence of wives and granted them their own property rights. Wives had custody, own wages, and granted them separate property rights. Equity has been a friend to some women in some circumstances particularly married women before they were seen in common law. Single women and widows did use the common law courts freely and sucessfully for many legal matters. It was the married women who needed the friend. 

10 of 10

Comments

No comments have yet been made

Similar Law resources:

See all Law resources »See all Trusts resources »