Origins and basics Flashcards
(10 cards)
What is equity
2 bodies in english law - common law and equity - equity supplements common law doesnt replace it
Origins
William I of Normandy conquered england in 1066 - successors to normans (plantagenet dynasty) made written orders and commands to incorporate varying customs and traditions of diverse ppl of england - common law
lord chancellor led the king’s curia regis (royal council) and the de facto head of english legal system - but system of common law was rigid and harsh to those outside nobility
common ppls could petition to lord chancellor and would invoke the church based concept of equity and provide remedy through his discretion
so many petitions came that the court of chancery had to be formed
‘Equity’ as a coherent body of jurisprudence
medieval period - chancery judges continue to hear petitions and develop law on petition by petition basis - inherently discretionary
Lord Dudley v Lady Dudley (1705) - ‘Equity is no part of the law, but a moral virtue which qualifies, moderates and reforms the rigour, hardness and edge of the law.’
19th century - equity = own settled body of law with precedents, rights and remedies
The commercialisation of ‘Equity’ and strains on the Court of Chancery
Gee v Pritchard 1818 - doctrines of court of chancery ought to be consistent like common law but more flexible
differences in administration for common law and CoC led to expensive and unnecessary delays
needed to be a fusion - common law procedure act 1854 began this process
judicature acts 1873 and 1875 completed the administrative realignment fusing courts of equity and CL together to from high court and CoA
Court of Chancery became the Chancery Division of the High Court - all 3 divisions are able to adjudicate on matter of common law and equity - if litigation starts at Cl and parties realise need equity, case can stay in whatever division
consequence = where Cl and equity conflict, equity prevails
Implications
fusion means equity can interject into almost all legal affairs
equitable maxims
maxims are cited regularly in court even if not binding - highly influential
trusts
trust is the legal institution by which a legal owner of property (real land or personal property e.g. chattels or intangible property e.g. company shares) can vest their property in another legal person or in themselves for benefit of designated beneficiary
beneficial interest in trust property - operates as an equitable prop right in trust property which cannot be defeated except by bona fide purchaser without notice (equity darling)
Must have separate legal and equitable/beneficial title - if don’t have separation then no trust - westdeutsche landesbank
The basics of the Trust in English law
3 legal persons - settlor, trustee and beneficiary
settlor = legal person in possession of legal title to property who settles their property in a trust - creates a beneficial title to property which exists separately from legal title
trustee = legal person entrusted to hold trust property for benefit of beneficiary - confers a fiduciary duty upon trustee not to use trust prop for own benefit but rather beneficiary
beneficiary = legal person entitled in equity to a beneficial interest in trust property - person going to take title of property once transfer is complete
The rights conferred under a Trust
The beneficiary’s beneficial interest in the trust property confers two rights in Equity – a proprietary right, and a personal right - right in land and a personal right can only be enforced against a person
The beneficiary’s equitable proprietary right against the trust property guarantees that title will be transferred to them under the operation of the trust. It cannot be defeated, except by ‘Equity’s Darling’ – a bona fide purchaser of value without notice
The beneficiary’s personal right exists against the trustee, and guarantees that the trustee carries out their obligations under the trust. The personal right confers a fiduciary duty upon the trustee. It also ensures the trustee’s liability for breach of trust.
Creating a Trust in English law
settlor (A) can transfer legal title to a trustee (B), to hold for the benefit of the beneficiary (C). - most common variation - express trust
settlor (A) can also appoint themselves as trustee (B), to hold the trust property for the benefit of a beneficiary (C). - norm when one person is proprietor but other ppl living are beneficiaries - express trust
settlor can even be both a trustee and a beneficiary under the same trust, so long as there is at least one other beneficiary - e.g. owner of legal title to a home can make express declaration of trust to hold home on trust for benefit of themselves and their partner
courts can impute a trust to legal parties based on their intentions
trusts can be created or imputed either inter vivos (during ones lifetime) or testamentary (in a will)
