Exploring Trusts and Equity Flashcards
A trust
A relationship recognised by equity which arises where property is vested in someone who is obliged to hold it for the benefit of some other person or for charitable purposes
Key features of a trust
- creation of equity
- trust exists in relation to specific property
- property held by trustees for the benefit of beneficiary/beneficiaries
- trustees owe obligations to beneficiaries
- beneficiaries can enforce trust against the trustees
Why are trusts important?
They enable separation of legal title and beneficial interest
What did Maitland say about trusts in 1936?
That trusts are “the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence”
What does equity do in trusts?
It prevents the legal owner from holding the land for his own benefit - it would be unconscionable for him to do so
Why did equity develop?
It developed because strict application of common law could lead to unjust results, with limited range of actions and remedies
What did Virgo say about the characterisation of equity?
“Rather than being characterised as securing justice, a better way of describing equity is that it restrains injustice by stopping the unconscionable conduct of a particular person”
Where does equity operate?
On the conscience of the owner of the legal interest - Browne-Wilkinson in Westdeustche
What are equitable maxims?
Not rules - they are statements of principle underlying the laws of equity
A trust must exist in relation to what?
Property
What is the nature of the beneficiary’s interest?
Both proprietary interest and personal rights
What is the trustee subject to?
Obligations of the beneficiary
