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LW 202: EQUITY & TRUSTS
WEEK 16: LECTURE 1: OVERVIEW
Syllabus:
● Introduction
● Equitable maxims
● Capacity & the Beneficiary Principle
● The three certainties
● Formalities
● Constitution
● Variation of trusts
● Fiduciary duties
● Breach of fiduciary duty
● Trustees’ powers and duties
● Breach of trust
● Liability for breach of trust
● Appointment and removal of trustees
Review: The Equitable Maxims
● Equity follows the law → Equity will only intervene if an important aspect of the
law is ignored or the outcome is injustice. Equity = doing the right thing
● Equity will permit no wrong without a remedy.
● Where equities are equal, the law prevails
● Where equities are equal, the first in time prevails → priority is given to interest
first in time.
● He who seeks equity must do equity → if seeking support of equity must be acting
fairly and conscionably
● He who comes to equity must come with clean hands → Someone who seeks an
equitable remedy cannot have acted immorally, illegally etc in relation to the
matter
● Delay defeats equity → if there is too long of a delay, the court may rule against
an equitable decision. Equity will look at the entirely of circumstances.
● Equity abhors a vacuum → property has to belong to someone
● Equity looks to substance, not form → KEY MAXIM: equity looks at what the
parties intended, more than what is written on paper.
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● Equity will not permit a statute to be used as an instrument of fraud → equity will
not allow statutory rights if it is unconscionable.
● Equity imputes an intention to fulfil an obligation → if someone makes a
commitment, their subsequent conduct can be used as proof of what they said to
do.
● Equity regards as done that which ought to be done → an obligation is required
and the court deems as so, rights will be required.
● Equity acts in personam (c.f. in rem) → equitable remedy acts against the
individual
● Equality is equity → KEY MAXI M: unless evidence to the contrary, equity will
assume an equal division of the interests.
● Equity will not allow a trust to fail for want of a trustee → The court has powers to
appoint trustees in situations where trustees have not been chosen or died.
● Equity will not assist a volunteer → volunteer = someone who is given no
consideration.
● Equity will not perfect an imperfect gift → if someone tries to do something and it
is not done properly, equity will not step in to perfect.
Review: Trusts
Recognition of Trusts Act 1987
● The term ‘trust’ refers to the legal relationship – created inter vivos or on death
[testamentary] – by a person, the settlor [or testator/testatrix], when assets have
been placed under the control of a trustee for the benefit of a beneficiary or a
specified purpose.
“… the legal relationship ...”
● Created by a person, the settlor/testator [or testatrix]
● When assets have been placed under the control of a trustee
● For the benefit of a beneficiary
● Inter vivos – during lifetime (‘between the living’)
● Testamentary – after death (by will)
Fully constituted express private trust
● Person A buys house
● Person A owns the house (legal and beneficial owner)
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● Person A (legal owner) declares that s/he is transferring the house to Person D to
hold on trust for the benefit of Person B and Person C
● Once there is a fully constituted trust, the settlor has possession of property.
● Settlors can assume different positions but not at the same time.
Fully constituted trust
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WEEK 16: LECTURE 2: CAPACITY & THE BENEFICIARY PRINCIPLE
Structure over the next 4 weeks:
CAPACITY:
Table of capacity (age and mental capacity) in relation to each role (of
settlor/testator, trustee and beneficiary):
Capacity Settlor Testator Trustee Beneficiary
in relation
to the
creation of
trusts:
Age 18 18 18 Any
If under 18 – (unless on
personalty; active military
voidable; service
If not repudiated,
binding (unless did
not appreciate
nature of act)
LW 202: EQUITY & TRUSTS
WEEK 16: LECTURE 1: OVERVIEW
Syllabus:
● Introduction
● Equitable maxims
● Capacity & the Beneficiary Principle
● The three certainties
● Formalities
● Constitution
● Variation of trusts
● Fiduciary duties
● Breach of fiduciary duty
● Trustees’ powers and duties
● Breach of trust
● Liability for breach of trust
● Appointment and removal of trustees
Review: The Equitable Maxims
● Equity follows the law → Equity will only intervene if an important aspect of the
law is ignored or the outcome is injustice. Equity = doing the right thing
● Equity will permit no wrong without a remedy.
● Where equities are equal, the law prevails
● Where equities are equal, the first in time prevails → priority is given to interest
first in time.
● He who seeks equity must do equity → if seeking support of equity must be acting
fairly and conscionably
● He who comes to equity must come with clean hands → Someone who seeks an
equitable remedy cannot have acted immorally, illegally etc in relation to the
matter
● Delay defeats equity → if there is too long of a delay, the court may rule against
an equitable decision. Equity will look at the entirely of circumstances.
● Equity abhors a vacuum → property has to belong to someone
● Equity looks to substance, not form → KEY MAXIM: equity looks at what the
parties intended, more than what is written on paper.
, 2
● Equity will not permit a statute to be used as an instrument of fraud → equity will
not allow statutory rights if it is unconscionable.
● Equity imputes an intention to fulfil an obligation → if someone makes a
commitment, their subsequent conduct can be used as proof of what they said to
do.
● Equity regards as done that which ought to be done → an obligation is required
and the court deems as so, rights will be required.
● Equity acts in personam (c.f. in rem) → equitable remedy acts against the
individual
● Equality is equity → KEY MAXI M: unless evidence to the contrary, equity will
assume an equal division of the interests.
● Equity will not allow a trust to fail for want of a trustee → The court has powers to
appoint trustees in situations where trustees have not been chosen or died.
● Equity will not assist a volunteer → volunteer = someone who is given no
consideration.
● Equity will not perfect an imperfect gift → if someone tries to do something and it
is not done properly, equity will not step in to perfect.
Review: Trusts
Recognition of Trusts Act 1987
● The term ‘trust’ refers to the legal relationship – created inter vivos or on death
[testamentary] – by a person, the settlor [or testator/testatrix], when assets have
been placed under the control of a trustee for the benefit of a beneficiary or a
specified purpose.
“… the legal relationship ...”
● Created by a person, the settlor/testator [or testatrix]
● When assets have been placed under the control of a trustee
● For the benefit of a beneficiary
● Inter vivos – during lifetime (‘between the living’)
● Testamentary – after death (by will)
Fully constituted express private trust
● Person A buys house
● Person A owns the house (legal and beneficial owner)
, 3
● Person A (legal owner) declares that s/he is transferring the house to Person D to
hold on trust for the benefit of Person B and Person C
● Once there is a fully constituted trust, the settlor has possession of property.
● Settlors can assume different positions but not at the same time.
Fully constituted trust
, 4
WEEK 16: LECTURE 2: CAPACITY & THE BENEFICIARY PRINCIPLE
Structure over the next 4 weeks:
CAPACITY:
Table of capacity (age and mental capacity) in relation to each role (of
settlor/testator, trustee and beneficiary):
Capacity Settlor Testator Trustee Beneficiary
in relation
to the
creation of
trusts:
Age 18 18 18 Any
If under 18 – (unless on
personalty; active military
voidable; service
If not repudiated,
binding (unless did
not appreciate
nature of act)
