Law Notes Trusts and Equity Notes
Equity notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB trusts cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).
These were the best Equity and Trusts Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest re...
The following is a more accessible plain text extract of the PDF sample above, taken from our Trusts and Equity Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Equity – Introduction
I. Maxims of Equity
Equity is discretionary
Though now governed by principles, they are not set in stone and remedies are awarded at the discretion of the court, emphasizing fairness
Schmidt v Rosewood – beneficiaries of a trust have no right to inspect trust documents but court has discretion to allow them to do so
Equity is triggered by unconscionability
Those who seek equity must do equity
Equitable remedies won’t be granted if C doesn’t intend to treat D fairly
Chappell v Times – employees denied remedy because they refused to sign an undertaking not to strike in the future
Those who come to equity must come with clean hands
Remedies will not be granted to C who has acted improperly
Dering v Earl of Winchelsea – legal impropriety only (not moral); conduct must relate to relief sought
Equity treats as done that which ought to be done
If A has a specifically enforceable contractual obligation to transfer property to B, Equity will regard it as transferred
Equity protects the weak and vulnerable
Equity is cynical
In certain cases Equity will mistrust gifts and hold that donee is holding them on a trust on behalf of donor
Equity is imaginative
Equity follows the law
Equity recognizes Common Law principles but doesn’t apply them slavishly or always
Equity looks to substance rather than form
Equity will not assist a volunteer
Equity assists the diligent
C may be denied a remedy due to lapse in time
Equity is equality
If there are multiple equitable interests, they are treated equally
Equity acts in personam
Rights destroyed when bona fide acquirer acquires the property (no rights in rem)
The Beneficiary Principle
I. Principle
Property must be held on trust for identified beneficiaries or objects, or it is void, so that the court has people in whose favor it can decree performance. A trust for purposes will not be valid.
II. Example Cases
Morice v Bishop of Durham – a trust bequeathing “such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of” was invalid as there were no ascertainable beneficiaries
Sir William Grant: “There must be somebody, in whose favour the Court can decree performance”
III. Exceptions
Charitable trusts – valid though trust for purposes (does not undermine rationale because Charity Commision and AG enforce them
Express trusts – though appearing to be trusts for purposes people can benefit indirectly, satisfying the requirement
Exceptionally non-charitable purpose trusts – old cases that are likely to be followed on facts but unlikely extended
Gardner, An Introduction to the Law of Trusts
I. Trustee’s Duties
Traditionally duties are in personam but increasing recognition of rights in rem attached to the trust property:
Trust property cannot be taken on bankruptcy because the duties owed are attached to it, whereas borrower can have the money taken away because duties are in personam.
When trust property is transferred from trustees, obligations stay with it and affect other people
Except when trustee is authorized to make the transfer (eg. to pay beneficiary from trust assets)
Bona fide purchaser for value (someone who pays what the property is worth without knowing/reasonably knowing it is trust property)
II. Beneficiaries’ Rights
Beneficiaries’ rights mirror trustee’s duties; interest thesis holds that a beneficiary holds interest in the trust property and trustee must provide, rather than the other way around.
Two (three?) categories of NCP trusts being valid:
Re Denley’s Trust Deed – two interpretations:
Trust is for the employees as beneficiaries (where employees could claim sports field’s monetary value and not just use)
Judge opted for view that trust is for purpose of providing employees with a sports field so the NCP trust was still valid because employees were benefited and could enforce the trust
Quistclose trusts:
Money transferred with understanding that payee would spend it in a particular way failing which it would return to transferer (trustee is not beneficiary as strings are attached to spending)
Graves/monuments, masses, particular animals etc.:
Other jurisdictions introduced statutes holding NCP trusts valid as long as there is someone to enforce them
III. Arguments of Principle
Technically all trusts are “purpose trust” because trusts with beneficiaries are simply purpose trusts to transfer money to them. Distinction on this basis is purely for policy. Policy concerns include 1) rights to enjoy property and 2) property be exposed to market influence (thus owned by someone with liberty to dispose). Thus trusts benefiting certain people (eg. sports field for employees) prevents those benefitted from spending the money as they wish, and those of erecting monuments (benefiting no-one) channels money away from enjoyment altogether.
IV: Is Enforceability Necessary?
Examples of enforceable PTs:
CPTs enforced by AG and Charity Commission
Re Denley enforced by individuals benefitted by purpose (but only they can enforce – thus if employees didn’t want sports field and trustees did something else with money, nobody else can enforce)
“Remaindermen” of anomalous cases: they can enforce but have no incentive (underspending on monument/purpose gives them more)
Non-enforcement:
If person with right to enforce chooses not to enforce, the choice prevails over settler’s wishes (this upholds interest theory as beneficiary has a choice to exercise his ownership)
Lack of information, energy, resources etc. often impede enforcement
Arguments against requirement of enforceability:
Against facilitative policy: while the requirement is supposed to prevent frustration of settlers by subversion of their intentions (eg. trustees keeping money for self) it simultaneously itself frustrates them by denying validity (abolishing requirement allows trust to exist but at the risk of subversion – both only partially vindicate settler’s...
Buy the full version of these notes or essay plans and more in our Trusts and Equity Notes.
Equity notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB trusts cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).
These were the best Equity and Trusts Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest re...
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