Equity and Trusts Law 1 Notes
Lecture 1 – Introduction
Trusts are included as part of the programme as Trusts are the “greatest invention of
Equity”, but not the only example of Equity in operation
Trusts are also the third limb of the general law of obligations – contract and tort
being the other two
Dictionary meaning of ‘equity’
Noun
The quality of being fair and impartial
The value of shares issued by a company
The value of a mortgaged property after deduction of charges against it
Law
What is Equity?
No neat Categorisation
No Statutory Base
Equity supplements the common law
Wide-ranging Case Law
Hybrid principles
Gillet v Holt [2000] EWCA 66
Proprietary estoppel case
Long genesis – came to court in 2000
The facts
In 1952, when Mr Gillet first met the first defendant Mr Kenneth Holt, the former
was a schoolboy aged 12 and the latter was a gentleman farmer (and a bachelor)
aged 38
o G used to do odd jobs to earn money = source of labour for the farm
When Mr Gillet junior was 15 Mr Holt proposed that he should leave school and
work full-time for Mr Holt
Concern of the case is what G was promised
Then occurred the first of seven incidents which the judge recorded ([1998] 3 AER at
pp.930-2) as assurances given by Mr Holt and relied on by Mr Gillet. The judge
accepted the Gillets’ account as factually accurate. The first incident (and some
supporting material from the same period) were described as follows by the judge –
Basically there is nothing in writing – entirely verbalised whether the judge
believes what is said by either side
The evidence at trial
“1964 Harvest
Mr Gillet says that he and Sally (then his fiancée) were taken to dinner by Mr Holt at
the Golf Hotel Woodhall Spa. The discussion was in line with earlier indications but
was “more specific”. Mr Holt explained that “as time progressed I would be involved
more and more with the farming business and in due course I would take over the
complete running of the farm when he died the farming business would be left to me
in entirety.” Mrs Gillet remembers Mr Holt saying that Mr Gillet was going to be in
full charge of the farm in due course and “that he also wanted to leave the farm to
Geoff”.
1
, Equity and Trusts Law 1 Notes
o Possible issue is that this could be hearsay BUT it is acceptable as long as the
judge believes it
Mr Gillet’s father speaks of a dinner at Mr Holt’s house at about this time, at which
Mr Holt said he wanted Geoffrey to run the farm which he saw as being “a
permanent arrangement” and that “he would see to it that, when anything
happened to himself, Geoffrey and Sally would be secure”.
Sally’s brother, Mr Wingate, remembers a conversation at his parents’ house, at
which Mr Holt said “something to the effect that he was going to look after Geoffrey
and Sally and that they would have an assured future”.
Proprietary estoppel
Both sides are agreed on that, and in the course of the oral argument in this court it
repeatedly became apparent that the quality of the relevant assurances may
influence the issue of reliance,
That reliance and detriment are often intertwined, and that whether there is a
distinct need for a ‘mutual understanding’ may depend on how the other elements
are formulated and understood
o Promise cannot be unilateral – mutual understanding
Moreover, the fundamental principle that equity is concerned to prevent
unconscionable conduct permeates all the elements of the doctrine
In the end the court must look at the matter in the round
The decision
It is entirely a matter of conjecture what the future might have held for the Gillets if
in 1975 Mr Holt had (instead of what he actually said) told the Gillets frankly that his
present intention was to make a will in their favour, but that he was not bound by
that and that they should not count their chickens before they were hatched
o Difficult point is that when someone says they want to make a will then it
becomes binding even before they die
o Rule = will revocable until point of death
o This decision = the intention of making a will or even making one makes the
decision in the will is irrevocable
Had they decided to move on, they might have done no better. They might, as Mr
Martin urged on us, have found themselves working for a less generous employer
The fact is that they relied on Mr Holt’s assurance, because they thought he was a
man of his word, and so they deprived themselves of the opportunity of trying to
better themselves in other ways
Although the judge’s view, after seeing and hearing Mr and Mrs Gillet, was that
detriment was not established, I find myself driven to the conclusion that it was
amply established
Mr Gillet and his wife devoted the best years of their lives to working for Mr Holt and
his company, showing loyalty and devotion to his business interests, his social life
and his personal wishes, on the strength of clear and repeated assurance of
testamentary benefits
They received (in 1983) 20 per cent of the shares in KAHL, which must be regarded
as received in anticipation of, and on account of, such benefits,
Then in 1995 they had the bitter humiliation of summary dismissal and a police
investigation of alleged dishonesty which the defendants called no evidence to
justify at trial
2
Lecture 1 – Introduction
Trusts are included as part of the programme as Trusts are the “greatest invention of
Equity”, but not the only example of Equity in operation
Trusts are also the third limb of the general law of obligations – contract and tort
being the other two
Dictionary meaning of ‘equity’
Noun
The quality of being fair and impartial
The value of shares issued by a company
The value of a mortgaged property after deduction of charges against it
Law
What is Equity?
No neat Categorisation
No Statutory Base
Equity supplements the common law
Wide-ranging Case Law
Hybrid principles
Gillet v Holt [2000] EWCA 66
Proprietary estoppel case
Long genesis – came to court in 2000
The facts
In 1952, when Mr Gillet first met the first defendant Mr Kenneth Holt, the former
was a schoolboy aged 12 and the latter was a gentleman farmer (and a bachelor)
aged 38
o G used to do odd jobs to earn money = source of labour for the farm
When Mr Gillet junior was 15 Mr Holt proposed that he should leave school and
work full-time for Mr Holt
Concern of the case is what G was promised
Then occurred the first of seven incidents which the judge recorded ([1998] 3 AER at
pp.930-2) as assurances given by Mr Holt and relied on by Mr Gillet. The judge
accepted the Gillets’ account as factually accurate. The first incident (and some
supporting material from the same period) were described as follows by the judge –
Basically there is nothing in writing – entirely verbalised whether the judge
believes what is said by either side
The evidence at trial
“1964 Harvest
Mr Gillet says that he and Sally (then his fiancée) were taken to dinner by Mr Holt at
the Golf Hotel Woodhall Spa. The discussion was in line with earlier indications but
was “more specific”. Mr Holt explained that “as time progressed I would be involved
more and more with the farming business and in due course I would take over the
complete running of the farm when he died the farming business would be left to me
in entirety.” Mrs Gillet remembers Mr Holt saying that Mr Gillet was going to be in
full charge of the farm in due course and “that he also wanted to leave the farm to
Geoff”.
1
, Equity and Trusts Law 1 Notes
o Possible issue is that this could be hearsay BUT it is acceptable as long as the
judge believes it
Mr Gillet’s father speaks of a dinner at Mr Holt’s house at about this time, at which
Mr Holt said he wanted Geoffrey to run the farm which he saw as being “a
permanent arrangement” and that “he would see to it that, when anything
happened to himself, Geoffrey and Sally would be secure”.
Sally’s brother, Mr Wingate, remembers a conversation at his parents’ house, at
which Mr Holt said “something to the effect that he was going to look after Geoffrey
and Sally and that they would have an assured future”.
Proprietary estoppel
Both sides are agreed on that, and in the course of the oral argument in this court it
repeatedly became apparent that the quality of the relevant assurances may
influence the issue of reliance,
That reliance and detriment are often intertwined, and that whether there is a
distinct need for a ‘mutual understanding’ may depend on how the other elements
are formulated and understood
o Promise cannot be unilateral – mutual understanding
Moreover, the fundamental principle that equity is concerned to prevent
unconscionable conduct permeates all the elements of the doctrine
In the end the court must look at the matter in the round
The decision
It is entirely a matter of conjecture what the future might have held for the Gillets if
in 1975 Mr Holt had (instead of what he actually said) told the Gillets frankly that his
present intention was to make a will in their favour, but that he was not bound by
that and that they should not count their chickens before they were hatched
o Difficult point is that when someone says they want to make a will then it
becomes binding even before they die
o Rule = will revocable until point of death
o This decision = the intention of making a will or even making one makes the
decision in the will is irrevocable
Had they decided to move on, they might have done no better. They might, as Mr
Martin urged on us, have found themselves working for a less generous employer
The fact is that they relied on Mr Holt’s assurance, because they thought he was a
man of his word, and so they deprived themselves of the opportunity of trying to
better themselves in other ways
Although the judge’s view, after seeing and hearing Mr and Mrs Gillet, was that
detriment was not established, I find myself driven to the conclusion that it was
amply established
Mr Gillet and his wife devoted the best years of their lives to working for Mr Holt and
his company, showing loyalty and devotion to his business interests, his social life
and his personal wishes, on the strength of clear and repeated assurance of
testamentary benefits
They received (in 1983) 20 per cent of the shares in KAHL, which must be regarded
as received in anticipation of, and on account of, such benefits,
Then in 1995 they had the bitter humiliation of summary dismissal and a police
investigation of alleged dishonesty which the defendants called no evidence to
justify at trial
2
