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Lecture notes Equity And Trusts
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Lecture notes containing detailed information about the equity and trusts module.
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EQUITY & TRUSTSLectures 1 & 2: Introduction to & the Classification of Trusts
The Module
During the module we look at:
• how trust relationships are created. - trust law deals with the regulation of a basic but
quite common situation, where one person who we call the trustee, property is transferred to
them to hold for the benefit of someone else. They look after it for someone else, they are
called the beneficiary. The trustee has kind of physical control of the property, but the benefit is
going to somebody else.
• the different uses and applications of the trust device – why are they created?
• how the relationship is regulated including how the law controls the trustee and
protects the beneficiary from:
• abuse by the trustee; and – typically this means where the trustee isn’t
doing what they’re supposed to do, what the creator of the trust has asked
them to do or taking benefit for themselves when they shouldn’t be.
• interference by outsiders to the trust relationship.
The Early Common Law
Pre-1066: Fragmented system of justice, administered by local sheriffs and
authorities, based on local customs.
Post-1066: Development of common law, first delivered by visiting officials as
representatives of the King. Sources begin to change.
Common law court structure begins to develop and becomes focused on
Westminster.
- this type of law derives from equity, where did it derive from? - we originally had a dual
system of law, and originally had the common law, was administered by local sheriffs and
authorities, after 1066, we had a development of the common law derived out of that
customary law and was by representatives of the crown. We then see a more formal
development of law in Westminster. It became to be perceived to be unfair, because of
that we ended up with a development of equity. It became separated from the people,
became centred in London, became very fixed and inflexible. Common law is very strict,
you must do this to have your right to be recognised and if you don’t your right won’t be
recognised. A lot of unfairness arrived as a result of this, many litigants were appealing
to the king and petitioning for a different outcome. The king wasn’t going to hear the
problems of the normal people and delegated that task to the lord chancellor. They
, developed this very distinctive area of law we now know as equity, developed to
mitigate the harshness of common law. Strict nature was problematic, ended up with a
parallel area of law. Ende dup with equitable remedies to solves these disputes, not
entirely, but on fairness and conscionability.
Development of Equity
Common law became fixed and inflexible
Common Law remedies were limited (money awards)
Disappointed litigants appealed to the King
Task delegated to the Lord Chancellor and later to Chancery Courts
‘Equity’ developed to ‘mitigate the harshness and rigour of the law’.
Equitable principles and remedies emerged based on fairness and conscience
Fairness and flexibility
“…the office of the chancellor is to ‘correct men’s consciences for frauds, breaches of trust,
wrongs and oppressions of what nature soever they be, and to soften and mollify the extremity
of the law.”
The Earl of Oxford’s Case (1615) I Ch Rep 1, per Lord Chancellor Ellesmere
A Divided Legal System Emerges
Common Remedies as of right.
Limited remedies (generally
Law monetary).
Discretionary remedies.
Equity Remedies other than monetary.
- the difference between those was that common law remedies arise if it went in your
favour. Typically, monetary- compensation
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