Equity: Trust Law
1. Introduction
1. Equity and Trusts * Equity is a particular body of law, consisting of rights and remedies, which evolved historically through the Courts of Chancery to mitigate the severity of the common law. * The trust has been characterised as the greatest and most distinctive achievement in equity although an exact definition of the trust has proven difficult. * Equity would recognise and enforce rights and duties that were not known to the common law. * E.g. the common law protects the trustee’s legal interest in the property, thus facilitating their dealings with 3rd parties, but if the beneficiaries of the trust wanted to enforce their rights, equity will provide equitable proprietary interest.
The Fusion “fallacy” * The fusion debate arose as to whether the Judicature Acts of 1873 and 1875 had effectively fused common law and equity, and the orthodox view is that the fusion was purely procedural and there are still substantive differences. * Fusion of procedural administration? * Salt v. Cooper (1880) * HELD: Main object of the Judicature Acts was to assimilate the transactions of equity and common law. It was not a fusion or anything of the kind. * MCC Proceeds Inc v. Lehman Brothers International (Europe) (1998) * HELD: Substantive rule of law was not altered by the Judicature Acts, which were intended only to achieve procedural improvements in the administration of law and equity. * However, in advocating practical realism, some judges have declared that they have been fused. * Fusion in substance? * Walsh v. Lonsdale (1882) * HELD: There is only 1 Court and the equity rule prevails in it. * There are substantive fusion as seen in cases like Boyer v. Warby (1953) – equitable tenants allowed to enforce covenants against successors in title, contravening privity of estate, Tinsley v. Milligan (1994) – assertion of equitable
1. Equity and Trusts * Equity is a particular body of law, consisting of rights and remedies, which evolved historically through the Courts of Chancery to mitigate the severity of the common law. * The trust has been characterised as the greatest and most distinctive achievement in equity although an exact definition of the trust has proven difficult. * Equity would recognise and enforce rights and duties that were not known to the common law. * E.g. the common law protects the trustee’s legal interest in the property, thus facilitating their dealings with 3rd parties, but if the beneficiaries of the trust wanted to enforce their rights, equity will provide equitable proprietary interest.
The Fusion “fallacy” * The fusion debate arose as to whether the Judicature Acts of 1873 and 1875 had effectively fused common law and equity, and the orthodox view is that the fusion was purely procedural and there are still substantive differences. * Fusion of procedural administration? * Salt v. Cooper (1880) * HELD: Main object of the Judicature Acts was to assimilate the transactions of equity and common law. It was not a fusion or anything of the kind. * MCC Proceeds Inc v. Lehman Brothers International (Europe) (1998) * HELD: Substantive rule of law was not altered by the Judicature Acts, which were intended only to achieve procedural improvements in the administration of law and equity. * However, in advocating practical realism, some judges have declared that they have been fused. * Fusion in substance? * Walsh v. Lonsdale (1882) * HELD: There is only 1 Court and the equity rule prevails in it. * There are substantive fusion as seen in cases like Boyer v. Warby (1953) – equitable tenants allowed to enforce covenants against successors in title, contravening privity of estate, Tinsley v. Milligan (1994) – assertion of equitable