Equity and Trusts

• Equity


  A body of law developed by the Court of Chancery to mitigate the strict application of common law rules
• Equitable rights


  Rights recognized and enforced by courts of equity, often in relation to property
• Equitable remedies


  Remedies granted by courts of equity, such as specific performance and injunctions
• Trusts


  Legal arrangements where property is held by one party for the benefit of another
• Three certainties


  • The requirements for a valid trust: certainty of intention, subject matter, and objects
• Knight v Knight establishes the three certainties required for a valid trust


  1840
• Certainty of intention


  The requirement that the settlor must intend to create a trust
• Paul v Constance: Words and conduct can infer an intention to create a trust


  1977
• Certainty of subject matter


  The requirement that the trust property must be clearly identified
• Hunter v Moss: A trust of a specified number of shares out of a larger holding has sufficient certainty of subject matter


  1994
• Certainty of objects


  The requirement that the beneficiaries of the trust must be ascertainable
• McPhail v Doulton: A trust for a class of beneficiaries has sufficient certainty of objects if it can be said with certainty that any given individual is or is not a member of the class


  1971
• Resulting trusts


  Trusts implied by law when property is transferred without the intention to make a gift
• Vandervell v IRC: A resulting trust arises where there is a transfer of property without an intention to benefit the recipient


  1967
• Constructive trusts


  Trusts imposed by law to prevent unjust enrichment or wrongdoing
• Lloyds Bank plc v Rosset: A constructive trust can arise where there is a common intention to share beneficial ownership and detrimental reliance by the claimant


  1991
• Fiduciary duties


  Duties owed by a trustee to the beneficiaries of a trust, requiring loyalty and good faith
• Bristol & West Building Society v Mothew: A fiduciary duty is a duty to act in the best interests of another


  1998
• Duty of care


  The duty of a trustee to exercise reasonable care and skill in managing the trust property
• Speight v Gaunt: Trustees must exercise reasonable care and skill in managing trust property


  1883
• Duty to account


  The duty of a trustee to keep and provide accounts of the trust property
• Armitage v Nurse: The duty to account is a core trustee duty


  1998
• Duty to invest


  The duty of a trustee to invest the trust property prudently
• Cowan v Scargill: Trustees must invest trust property in the best interests of the beneficiaries


  1985
• Tracing


  The process of following property through different forms or into the hands of different parties
• Foskett v McKeown: Tracing allows beneficiaries to claim property that represents their original property


  2001
• Breach of trust


  A violation of a trustee's duties, which can give rise to personal liability
• Target Holdings Ltd v Redferns: A breach of trust occurs where a trustee fails to comply with their duties


  1996
• Trustee Act 2000


  Legislation governing the powers and duties of trustees in England and Wales
• Charities Act 2011


  Legislation governing the creation, administration, and regulation of charities in England and Wales
• Equitable maxims


  Principles developed by the courts of equity to guide their decision-making