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Week 8 - E seminar trusts in the commercial contect
- Module
- Equity & Trusts
- Institution
- University Of Lincoln (UoL)
This week explores trusts in the commercial context with cases and journal articles. Questions and answers
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1. Do you think that equitable principles should apply differently in the commercial contextcompared to the family home context?
Some would say no as equity values should be available for everyone. Therefore they should
be the same for everyone. Lord Neuberger commented in Patel v Mirza that ‘the ultimate
function of the courts in common law and equity is to formulate and develop rules of a clear
and practical nature. However, the ‘commercialisation’ of equity at the highest level –
whether by way of context-based application or commercially driven reinterpretation of
what are the fundamental principles – often takes place discreetly under the cloak of
context-neutrality. Such a tacit yet paradigmatic shift risks undervaluing the importance of
equitable doctrine and by passing the need for transparent reasoning.
Equity judgments are not always welcomed in commercial dealings, where transactional
certainty is valued- given the often large sums of money involved, parties want to know
exactly where they stand. “…wise judges have often warned against the wholesale
importation into commercial law of equitable principles inconsistent with the certainty and
speed which are essential requirements for the orderly conduct of business affairs.”
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 704 (Lord Browne-
Wilkinson)
Equity bases its decisions on the concept of unconscionability. The idea of right/wrong or
justice is fine in private disputes but are not so normal for commercial relationships- which
are about making profits and money. “In my view it is impracticable and unreal to introduce
into commercial transactions the moral standards of the vicarage.” UBS AG (London Branch)
v Kommunale Wasserwerke Leipzig GmbH [2017] EWCA Civ 1567, [347] (Gloster LJ)
However, some people believe concepts of fairness can balance out the cold- hearted
pursuit of profit. “Equity’s place in the law of commerce, long resisted by commercial
lawyers, can no longer be denied. What they once opposed through excessive caution they
now embrace with excessive enthusiasm.” – Lord Millett, ‘Equity’s place in the law of
commerce’ (1998) 114 LQR 214
Equitys place in the law of commerce talks about although equitable doctries ,remedies and
principles could not be confined to the realm of family, their uncontrolled extension into the
commercial field, and their unthinking application by common lawyers was in danger of
doing more harm than good.
2. In terms of the common intention constructive trust, critically analyse Marr v Collie [2017]
UKPC 17, [2018] AC 631. Be sure to read around it: consider relevant case law and academic
case notes. Does the CICT work differently in the commercial and family home contexts?
A Couple bought various properties as investments in joint legal names, although C
contributed almost all of the purchase funds. When the relationship , the claimant sought a
declaration that he owned sole beneficial interest in the properties upon presumed resulting
trust. The Bahamas court of appeal held that the presumed resulting trust was rebutted due
to clear evidence at the time of purchase the claimant had intended that defendant should
have equal share in the properties. The privy council held that the intention of the parties
were not sufficiently examined by the judge and thus the matter should be remitted for a
judge to redetermine.
Lord Kerr stated that the scope of common intention constructive does not apply in the
domestic consumer context. It is entirely conceivable that partners in a relationship would
buy, as an investment, property which is conveyed into their joint names with the intention
that they shall be joint tenants beneficially ,even though they contributed in different shares
to the purchase. In such cases the presumed resulting trust does not apply [49].
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