BPP University College Of Professional Studies Limited (BPP)
Comprehensive Equity & Trusts notes compiled in preparation for 2017 GDL exam.
Topics covered:
Equitable Remedies,
Secret Trusts,
Implied Trusts of the Home (includes problem question structure AND essay plan).
BPP University College Of Professional Studies Limited (BPP)
Graduate Diploma in Law
Equity and Trusts
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Equitable Remedies:
Equitable remedies provide a wider, alternative and more flexible range of options for Claimant than
common law damages. The Claimant can seek a claim at common law but obtain an equitable remedy.
Injunctions may only be awarded to protect a recognizable legal or equitable right: Day v Brownwigg.
Specific Performance:
At common law the 'remedy of right' is damages (Robinson v Harman); a breach of contract leads to an
entitlement to damages. SP requires party who breached contract to complete the terms/sale/provision
of services.
SP is a final remedy – in the interim an IMI or IPI should be considered; they may have the same
effect, but will take effect at a pre-trial stage.
SPs are only effective against positive obligations.
Consider the requirements for specific performance:
1. Damages must not be an adequate remedy: Adderly v Dixon.
a. LAND:
Regarded as unique in law, and so generally SP will be given for contracts to
buy/sell land or to grant an estate – including leases.
b. PERSONAL PROPERTY:
Generally not regarded as unique in law; damages generally represent an
adequate remedy.
If the item is unique, or identical property cannot be obtained, however, SP may
be granted –
Duncruft v Albrecht: Stocks and shares not-available on the stock-
market where considered sufficiently unique to award SP of contact;
Falcke v Gray: Ming vase was considered to be of unusual beauty, rarity,
distinction, for the award of SP but ordinary antique chairs were not in
Cohen v Roche;
If the item is of especial value to the claimant SP may be awarded to the C:
Behnke v Bede: ship fitted to the needs of the hirer and where sourcing
another ship of same specifications would incur significant expenses
resulted in Court awarding SP. Peculiar and practically unique value to
the claimant.
Sky Petroleum v VIP: petrol during oil crisis was considered of especial
value to the C to prevent business’ insolvency.
Lamplough v lotus Cars Ltd: SP awarded as damages would not have
been an adequate remedy for delivery of winning racing cars.
c. CONTRACT FOR PROFESSIONAL SERVICE:
Generally not considered ‘unique’ unless the D is the only business able to
perform the particular service. Ask: is the service provider replaceable? Could
the loss of service be quantified in damages?
, Verrall v Great Yarmouth: SP was awarded for use of conference hall as the
claimant could not find a suitable, alternative premises, and the political
repercussions of cancelling the conference were not compensable in damages.
d. CONTRACT FOR PERSONAL SERVICE:
A contract of services, such as long-term employment will never be subject to
SP under s. 236 Trade Union and Labour Relations Act 1992. SP will never be
granted for contracts of employment, more generally.
In contracts of services other than employment, equitable principles typically
bar the granting of SP:
De Francesco v Barnum: court will not award SP where to do so would
essentially turn ‘contracts of service into contracts of slavery’. Court will
not award SP where to do so would compel people to maintain
‘continuous personal relations’ that could generate resentment;
Giles v Morris: court will not award SP where to do so would lead to
poor performance of contractual obligation. Especially true where
subject matter of contract is measured subjectively.
2. Consider if court supervision would be an issue:
a. General rule – SP will not be awarded where performance of contractual obligation by D
would require constant court supervision:
Co-operative Insurance v Argyll Stores: D contracted to keep shop open for
certain working hours. C applied for SP to ensure was complied. Court refused
award as would have required constant supervision and contempt of court
rulings.
Ryan v Mutual Tontine: full time porter also part time chef. Job role too broad
for award of SP. Not clearly defined, i.e. must be clear whether D is complying
with SP order for the court to clearly enforce it.
EQUITY WILL NOT ACT IN VAIN.
3. Consider principle of mutuality:
a. If one party could not obtain SP the other party should be precluded also.
Lumley v Ravenscroft: minor could not obtain SP so SP could not be awarded
against minor.
Employer cannot obtain SP so SP will not be ordered against them by employee.
4. Clean Hands/Delay:
a. SP is equitable, discretionary remedy. Thus, no one who as acted unconscionably will be
able to obtain SP. In other words, C must have been willing to perform their contractual
obligations: Coatsworth v Johnson.
b. Delay defeats equity – Eads v Williams.
5. Excessive hardships:
a. Court will generally not grant specific performance where to do so would result in undue
hardships to the D: Patel v Ali.
, Distinction between undue hardship and poorly negotiated bargain.
Injunctive Relief:
Injunctions are 'court orders compelling the defendant to undertake an act or to prevent D for carrying
out an act' (can have positive or negative implications. Assist C when rights infringed).
Injunctions are usually used when it is not practical to wait for a full trial, as damage
may be incurred to a Claimant long before a matter comes to trial. Thus secure interim
remedy.
The awarding of injunctions is entirely discretionary and will only be awarded where
damages are an inadequate remedy.
Injunctions may be granted at different stages:
1. Interim (interlocutory) Injunctions = are granted before a trial. They can turn into
a final injunction. Only effective until trial or specified date in order.
2. Final (perpetual) Injunctions = are awarded at trial and will last into perpetuity.
Injunctions granted with notice = Party applies for interim injunction, notice is given to
other party so both parties can present their evidence for/against granting it. Called
'with notice' application (inter partes).
Injunctions granted without notice = extremely urgent matter where there is a need for
secrecy (e.g. search order or freezing order). Only applicant appears at hearing; other
party not notified. Used to be called 'ex parte' applications.
Breach of Injunction:
→ Non-compliance/breach with an injunction amounts to the contempt of court – as
injunctions act in personam it is punishable by imprisonment, sequestration of property
or fine. Damages may be awarded in lieu of, or in addition to, an injunction (Senior
Courts Act 1981, s 50).
→ Interim Injunction = 'holding the ring'; making sure everything is kept in place before a
trial.
o Civil Procedure Rules stress for justice to be done between the parties (as
there's always the possibility with injunctions of infringement Ds rights).
As a condition to granting interim injunctions, court generally requires C to enter
undertaking to pay damages which might be awarded at full hearing if D
suffered damage from interim injunction and C found not to have been entitled
to.
Search Orders:
A search order is a court order allowing the claimant access to the defendant’s premises for the purpose
of searching for, inspecting, photographing and subsequently seizing evidence. It is applied for without
notice and is designed to prevent the defendant destroying or removing any evidence that could be
potentially critical to the claimant’s case at full-trial.
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