Equity + Equitable interests in land(inc overreaching)

Question 1

What is the primary function of equity in the legal system?

Answer 1

Equity addresses and mitigates the rigidity of common law, providing remedies where none existed under the law to ensure fairness and justice.

Question 2

How did the integration of law and equity occur, and what was the result?

Answer 2

How did the integration of law and equity occur, and what was the result?

Question 3

Who are two historical figures that commented on the challenges of defining equity?

(Whatdoes Emily Sherwin argue about this?)

Answer 3

Sir Frank Kitto and Frederick Maitland.

Emily Sherwin - broke down Maitland’s definition - “that body of laws administered by our English courts of justice which, were it not for the operation of the Judicature Acts, would be administered by
courts that would be known as Courts of Equity.”1 = implication is that nothing unifies the various principles, doctrines, and remedies associated with equity other than their procedural
origin.

Question 4

What ancient philosophy influenced the concept of equity, and what does it represent?

Answer 4

Aristotle’s philosophy, specifically Epieikeia/Aequitas, viewed equity as a corrective mechanism to adjust the law for fairness in individual cases.

Question 5

What landmark case established equity’s role based on the Chancellor’s conscience?

Answer 5

Earl of Oxford’s Case (1615).

(Equity takes precedence over the common law).

Question 6

What legislation emphasizes that in conflicts between law and equity, = equity shall prevail?

Answer 6

Senior Courts Act 1981, s 49(1)

Question 7

Which case is highlighted in discussions of trusts within modern equity? (Who’s theory did the court reject?)
What was his theory?

Answer 7

Westdeutsche Landesbank Girozentrale v Islington LBC [1996].

=Payments made with the intention to discharge contractual obligations rebuts a presumed resulting trust even if the contract it was paid under was void.

Birks’ theory of resulting trusts was rejected = the resulting trust (automatic or presumed) is triggered in order to reverse unjust enrichment.

Question 8

What is a resulting trust?

Answer 8

A resulting trust is an implied trust that comes into existence by operation of law, where property is transferred to someone who pays nothing for it; and then is implied to hold the property for the benefit of another person.

Question 9

What is proprietary estoppel, and can you name key cases illustrating its principles?

Answer 9

A doctrine where a court may grant rights if a person relied on promises regarding property rights(and these promises were not met), illustrated by Thorner v Major [2009] and Guest v Guest [2022].

Question 10

How is equity applied to intellectual property?

Answer 10

Equity applies principles to protect intangible assets, ensuring fairness in cases involving intellectual property.

Question 11

How do equitable interests arise?

Answer 11

Equitable interests arise from intentions,

statutory formalities(i.e., s. 53(1)(a)); = equitable interests in land must be created by signed writing.)

doctrines like proprietary estoppel.

Question 12

What does the Law of Property Act 1925, s 53(1)(b) govern?

Answer 12

Governs express trusts and principles for the creation and transfer of equitable interests.

Question 13

What role does the doctrine of overreaching play in property law?

(What case refers to this?)

Answer 13

It occurs when the purchaser paid to at least two trustees in monies. The occupiers of a property in such a situation cannot then claim that their occupation of the property is an overriding interest, as the joint trustees have brought that occupation to a close through the sale of the property.(Threshold increased - so equity does not cover= more than one person so property/land cannot be transferred).

It plays a crucial role in the interaction between equitable and legal interests, particularly in the context of registered land, as explained in City of London Building Society v Flegg [1988].

-question was answered - Whether contribution to purchase price and actual occupation can amount to an overriding interest, or whether such rights can be overreached. = NO

Reasoning = would be risks to financial institutions of ‘unsuspected hazards’ if the defendants would be bound by unregistered rights. (Lord Oliver) - Therefore found them to have overreached.

Question 14

What is overreaching in property law?

What circumstances are provided by s2 of the Law of Property Act 1925?

What is capital money?

Answer 14

-The transfer of beneficial interests from land to the proceeds of sale.( =beneficial rights under trust detatch from the land, meaning the purchaser cannot be affected by them.)

• circumstances provided for by s 2 of the Law of Property Act 1925, payment of capital monies will remove beneficial interests so that a purchaser’s title will not be affected by them.

Capital money = (Money arising from the sale, mortgage, etc. of land held on a {trust of land} or from settled land.)

Question 15

What is a beneficial interest?

What are the three ways this can arise?

What is the difference between constructive trusts and resulting trusts?

What are the two differences between a resulting trust and express trust?

Answer 15

-A beneficial interest is an interest in land that gives a person a financial share in a property and/or a right to occupy a property.

-a. by express declaration of interests(= the most common way to show that someone has a beneficial interest in a property. This kind of trust is usually written down in a contract, a declaration, or a deed. It involves the legal owner, who is called the trustee, signing the document to confirm the beneficial interest.)

b. by resulting trust. = From Express:
i. = when a beneficiary is not present(dies before trust is given) or
ii. = when all trust assets are not used.

(A resulting trust arises essentially where property is transferred back to someone who is implied to have held the property on trust for the benefit of another.) -i.e., when assets are exhausted due to mismanagement or market conditions.

c. by constructive trust. (A trust that arises by operation of law where it would be unconscionable for a person (A) who holds an asset to deny the beneficial interest of another person in the asset.(i.e., holding funds that have been paid by mistake or holding an asset obtained by fraud).

Constructive v Resulting
- constructive trusts’ are trusts that may exist even though an express trust has not been expressly created. A resulting trust arises essentially where property is transferred back to someone who is implied to have held the property on trust for the benefit of another.

Resulting v Express
a. Express trust is unenforceable unless it is evidenced in writing, whereas resulting trust is created and operates without formality.

Question 16

What is a trust? (grantor/trustor/settlor? trustee? beneficiary?)

Answer 16

A trust is a legal document created for the benefit of a beneficiary — a minor child, a surviving spouse, a family member with special needs, a pet, or a charity.
The person who creates the trust is referred to as the grantor or settlor. The grantor designates a trustee, who holds legal control of the assets in the name of the trust and must act in the best interests of the beneficiary.

Question 17

Why was overreaching introduced under section 2(1)(i) Law of Property Act 1925)?

What does law of Property Act 1925, section 27, say about overreaching?

Why are beneficial interests dealt with solely by the doctrine of statutory overreaching? (What does this make overreaching capable of doing?)

Answer 17

• Statutory Overreaching is the second device through which the law intended to reduce the influence of the doctrine of notice (Land Charges Registration is the other).

-Law of Property Act 1925, section 27, says that in order for an equitable interest under a trust to be overreached the capital money arising from the sale must be paid to 2 trustees.

-beneficial interests under trust cannot be registered on the land charges register. Thus, they are dealt with by the doctrine of statutory overreaching = a beneficial interest under trust is capable of binding 3rd parties through overreaching.

Question 18

Are all equitable rights capable of being registered as land charges or overreachable? - which statute outlines this?

If not, what might these rights governed by instead?
(What case exemplifies this?)

What is equity’s darling?

Answer 18

• NO Some equitable rights are neither capable of registration as land charges (i.e. not listed in the Land Charges Act 1972, section 2) nor overreachable.
• These rights are governed by the historical doctrine of notice i.e. bind all transferees except equity’s darling e.g. Equitable co-ownership interests behind a trust of land and equitable interests under a Settled land Act Settlement are both governed by the doctrine of notice. Also pre-1926 easements and covenants and pre-1926 class B + C land charges are governed by notice.

i.e., Kingsnorth Finance Co Ltd v Tizard [1986]
-where it was decided that a wife’s beneficial interest in the matrimonial home can serve to bind a purchaser for value who fails to adequately inspect a property.

Equity’s darling = the one person whose rights will trump prior equitable interests – the bona fide purchaser who acquires property for value and without notice of the equitable rights.

Question 19

Which case established the foundation for equity’s role in the legal system?

Answer 19

Earl of Oxford’s Case (1615).

Question 20

What insights do Westdeutsche Landesbank Girozentrale v Islington LBC [1996] and Thorner v Major [2009] provide?

Answer 20

Insights into trusts and proprietary estoppel, respectively.

Question 21

What are the implications of the concept of overreaching on equitable interests?
(What is the iconic case referred to which exemplifies this?)

Answer 21

Exemplified in City of London Building Society v Flegg [1988], it affects the interaction between equitable and legal interests.

Question 22

Which authors can you refer to who specialises in equity?

Answer 22

Maitland’s lectures and modern legal analyses by authors such as Swadling, Megarry, and Wade.