Lecture notes
Recap Maxims & Types of Trust Overview/Resulting Trusts
- Module
- Equity And Trusts
- Institution
- University Of Sussex (UoS)
Lecture notes of 22 pages for the course Equity And Trusts at UoS (.)
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Recap Maxims & Types of Trust Overview/Resulting TrustsRecap on Maxims
Recapping the Maxims
Maxim – “as equity became more formalised a framework emerged within which its
development could be shaped…”.
Sarah Wilson, Textbook on Trusts, OUP, 2005.
Boardman v Phipps [1967].
Lord Upjohn – “rules of equity have to be applied in such a great diversity of
circumstances that they can be stated only in the most general terms and
applied with particular attention to the circumstances of each case”.
Treat with caution:
“The maxims are not rules to be construed like statutes, but rather a general
basis around which much of the law of equity has formed”.
Sarah Wilson, Textbook on Trusts, OUP, 2005.
Virgo - ‘useful generalisations of complex law’.
Often cited in judgments.
Rarely the sole reason for a decision.
Those Who Come to Equity Must Come with Clean Hands
Has to relate to the relief (remedy) sought, don’t have to be of general moral
upstanding character.
Argyll (Duchess) v Argyll (Duke) [1967] – adultery/confidential information.
Ungoed-Thomas J – “A person coming to Equity for relief – and this is the
equitable relief which the plaintiff seeks – must come with clean hands; but
the cleanliness required is to be judged in relation to the relief that is
sought”.
Reviewed in Patel v Mirza [2016].
Equity Looks to Intent (Substance) Rather than Form
Provides basis for equitable remedy of rectification – contract (where words do not
reflect the common intentions of the parties) and in the context of a trust,
constructive trusts, and even though settlor not explicitly stated.
Three certainties.
Gift?
Whole will – trust.
Comiskey v Bowring-Hanbury [1905].
‘In full confidence that she will make use of it as I should have made myself
and that at her death she will devise it to such one or more of my nieces as
she may think fit’.
,Delay Defeats Equity
Links with the doctrine of laches – prevents a claimant from asserting their rights, a
defence “equity aids the vigilant, not the negligent” (burden of proof on defendant).
No set time and usually needs to have been reliance i.e. change of position – unfair
to grant the relief sought.
Leaf v International Galleries [1950].
Delay of five years.
Bar to equitable remedy of recission.
Limitation Act 1980.
“Equity follows the law”.
Trust Essentials and Classifications
Trusts Essentials
Trusts of:
Land.
Origin historically/rights in land.
E.g. easements.
Money.
Chattels (goods).
Intangible property.
E.g. share certificate represents rights in company.
E,g. profits/voting rights potentially.
Trustees – hold legal estate in the property.
Beneficiaries – equitable interest.
Trustees invest the trust property (capital) & pay the income to the beneficiaries.
Trustees’ duties.
Trust instrument.
Principles of trust law.
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] per Lord
Browne-Wilkinson.
Equity operates on the conscience of the legal owner.
Trustee needs to know of the trust (or in constructive trust –
awareness of factors affecting conscience).
Identifiable trust property (breach of trust dishonest assistance
exception).
Proprietary interest (only defeated by bona fide purchaser for value).
Classification of Trusts
Many ways of classifying.
Private trusts – beneficiaries are people.
Public trusts (often known as charitable trusts) – purposes, but only charitable.
Limited exceptions private purpose trusts.
E.g. to look after a pet.
Maintain a grave.
Say masses for the deceased.
Express trusts – required formalities.
, E.g. writing for land s53(1)(b) LPA 1925.
Constitution.
Wills Act 1837.
Three Certainties.
Intention.
Subject matter.
Objects.
Fixed trusts – trust instrument prescriptive.
“To Leigh for life, remainder to Maya and Jamie in equal shares”.
Discretionary trusts – maximum flexibility.
“My trustees Ajay & Lucy to hold my shares in Wind co plc on trust for my
children. They shall apply the income from the shares for the benefit for any
or all of my children in such amounts and at such time as they think
appropriate”.
Annabel’s (Berkely Square) Ltd v Revenue & Customs Commissioners [2009].
Employers were private members club.
Employees were given tips, either by credit/debit cards, and cash.
Tips were separated and given to the ‘master’.
Would distribute the tips with relation to length of service.
o Employees were not paid statutory minimum wage.
o Tips were part of their wages.
The tips never belonged to the employer.
o The master was holding them on discretionary trust for
the employees.
Secret trusts – testamentary trusts (via a will), where a beneficiary has promised to
give the property to a person or purpose not in the will.
Stanley leaves house to Michael in his will, but Michael has promised he will
give it back to Patrick.
Will is a public document.
Testator may not want in public domain.
Affair – secret child?
Debate as to type:
Express (testator) has created.
Constructive (operates on conscience of Michael – ‘unconscionable’
for him to keep.
Historically useful for women/charities (prevented by statute).
Fully secret - appears to be a gift in the will.
Half secret – reference to the trust, but no detail.
Requirements - Ottaway v Norman [1972].
Intention.
McCormick v Grogan [1839].
o Linen merchant dying from cholera.
o Told his friend, Grogan that he made a will leaving all
his property to him.
Grogan was told that he would find the will and
letter.
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