Equity and Trusts Eighth Edition Alastair Hudson’s Equity and Trusts is an ideal textbook for undergraduate courses on the law of trusts and equitable remedies It provides a clear, current and comprehensive account of the subject through which the author’s enthusiasm and expertise shine through, helping to bring to life an area of the law which students often ¿nd challenging Fully updated and revised, this Eighth Edition contains an analysis of Jones v Kernott and trusts of homes; a new treatment of dishonest assistance and unconscionable receipt; a full treatment of the law on super-injunctions; coverage of all of the trusts law cases precipitated by the collapse of Lehman Brothers; a reÀection on women and equity and the politics of trusts law; a new treatment of the Hastings-Bass principle as set out in Pitt v Holt; analysis of over 200 new cases; the Charities Act 2011 and the Perpetuities and Accumulations Act 2009 Equity and Trusts provides the most comprehensive and up-to-date coverage of the law of Equity and Trusts, as well as a lively and thoughtful account of the issues raised by it This book has been cited as being authoritative in the courts of numerous countries The eighth edition is supported by a companion website which includes: • over 50 short podcast lectures by the author discussing and clarifying key topics from within the book, which cover an entire course; • a set of brief videos which provide context and bring to life selected key topics; • an introductory video presentation from the author introducing the viewer to the subject of Equity and Trusts and to the book in particular Review of a previous edition: ‘One of the book’s great strengths is its clear exposition of some very dif¿cult areas of the law, moving seamlessly from points that puzzle students to points that puzzle practitioners Other strengths are the breadth of its approach, the fact that it is extremely up to date, the freshness and vividness of its approach and its willingness to place equity in a wider context The student will enjoy a clear, lively and challenging account of the subject matter The practitioner will ¿nd the book well worth consulting for its clear exposition of the basic principles and of their application in dif¿cult areas.’ – New Law Journal Alastair Hudson is Professor of Equity & Finance Law at the University of Southampton, and of Lincoln’s Inn, Barrister He is a National Teaching Fellow, Fellow of the Higher Education Academy, Fellow of the Royal Society of Arts, and was voted UK Law Teacher of the Year This page intentionally left blank Equity and Trusts Eighth Edition Alastair Hudson LLB LLM PhD (Lond.) Professor of Equity & Finance Law University of Southampton National Teaching Fellow Fellow of the Royal Society of Arts Fellow of the Higher Education Academy Of Lincoln’s Inn, Barrister Eighth edition published 2015 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2015 Alastair Hudson The right of Alastair Hudson to be identi¿ed as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identi¿cation and explanation without intent to infringe First edition published by Cavendish Publishing in 1999 Seventh edition published by Routledge in 2013 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Hudson, Alastair, author Equity and trusts / Alastair Hudson.—Eighth edition pages cm ISBN 978-0-415-83688-3 (hardback)—ISBN 978-0-415-83687-6 (pbk)— ISBN 978-1-315-77441-1 (ebk) Equity—England Trusts and trustees—England I Title KD674.H83 2014 346.42ƍ004—dc23 2014007882 ISBN: 978–0–415–83688–3 (hbk) ISBN: 978–0–415–83687–6 (pbk) ISBN: 978–1–315–77441–1 (ebk) Typeset in Times by Re¿neCatch Limited, Bungay, Suffolk Preface Equity is a fascinating and subtle area of law; the law of trusts is by turns a technically progressive, practical and theoretically complex topic This book constitutes a comprehensive analysis of both equity and the law of trusts, suitable for undergraduate and postgraduate courses, and (as suggested by reviews of the previous edition) it is widely used by legal practitioners and has been cited in the courts of several jurisdictions This subject has everything: birth, life, greed, sex, lies, truth, conscience, bitterness, vengeance and death – and then what comes after death The rules of equity, and in particular the trust, are the ways in which English law deals with so many of these things This book is meant to teach students and others interested in this subject, and to deal forthrightly with the issues which this subject raises: both subtle technical issues and contextual, social issues To say that it is a teaching aid does not mean that it is not intended to be an academic or scholarly book On the contrary I have had two aims in writing it: to explain the law of trusts in an accessible way and also to address all of the major academic debates that currently surround the complex principles of equity and the law of trusts It explains the concepts by using easy-to-understand examples from real life, together with my ‘cognitive reinforcement’ teaching technique, and detailed analyses of the key cases and principles Important information for the student reader: how to read this book It is important that you read this Preface before you start reading the rest of the text It is then very important that you read the ¿rst two chapters, which will explain the vital underpinnings for the whole of the rest of the book This book has been written in a way that is slightly different from other trusts textbooks Each chapter and each individual section begins with an overview of the relevant legal principles in that area These summaries serve as a shorthand note of the discussion that follows Importantly, they will give an outline of the subject matter to come The secret to reading textbooks and cases is to know what the core legal principles are before you start to read Without that knowledge you will ¿nd it very hard to understand the detail of the discussion In this book each major principle is illustrated with a factual example to show how the ordinary world is understood through a trusts law analysis That way, the discussion that follows will make more sense and the major issues will stand out more clearly After the summary, the remainder of the section will explain how those principles work Those sections will be designed as problem-solving discussions – examining the real-life issues which have led to development of the law of trusts and the principles of equity vi Preface Discussion will be primarily of the most signi¿cant cases, set against accounts of the academic analysis of each subject Equity and trusts is a topic in which it is possible for a student to score very high marks in essays and examinations because there are a number of very sophisticated ideas bound up in it If you deal with them well, you will shine Therefore, importantly for you, this text and its two companion websites include discussion of all of the major academic and judicial debates in the area (with a few more besides): there are podcasts on each individual topic, and full lectures online too These ideas are usually considered towards the end of each chapter after the basic material has been explained at the outset A glossary of essential terms is also supplied, which may prove useful in those dark early days The signi¿cance of the painting on the cover of this book The painting on the cover of the paperback edition of this book depicts a young woman, clearly in some distress, consulting a lawyer The painting is set in the late 18th century While the woman is in full Àow telling her story to the older man, he is clearly unsure whether or not to believe her, or at the very least is readying himself to disagree with her The young clerk who is leaving by a door at the left of the painting appears to have stopped in mid-stride, surprised at what the young woman is saying At the time, women’s position under English law was tenuous Indeed, it was often only through trusts (as discussed in Chapter of this book) that it was possible to protect women both against arrangements which tended to prioritise men and against the dangers of having their property taken from them by unscrupulous husbands because (at that time) any property belonging to a woman would ordinarily pass to her husband on marriage Only a trust could ensure that a woman could maintain the use of that property after her marriage In Jane Austen novels, the young women who were threatened with losing their homes when their fathers died (and the house passed to the next male heir in their extended family) could only have been protected by differently drafted trusts So, this painting depicts the dif¿culty which a young woman would have both in protecting herself and in ¿nding lawyers who were enlightened enough to ¿ght for their rights A trust could be the protector for a young woman, by making it impossible for her home to be taken away from her; or it could be the device which condemned her to penury, by allocating the ownership of her home to other people The structure of the book Part is essential background material for the student reader, as it considers the fundamental principles of equity and explains the basic structure of the trust No student of this subject will get far without a sure understanding of this basic material Part considers the nature of express trusts and the formalities necessary for their creation, which form the basis of all courses on express trusts law Part considers the administration of express trusts and the responsibilities imposed on trustees by case law and by statute The global ¿nancial crisis and the collapse of the US investment bank Lehman Brothers has given rise to a large amount of important case law on the certainties necessary to create a trust As the author of The Law of Finance, it has been possible for me to synthesise the discussion of these fascinating but complex new cases with the relevant principles of ¿nancial practice and ¿nancial regulation There continues to be a detailed discussion of the ¿duciary duties of trustees, including signi¿cant developments in Preface vii the decision of the Supreme Court in Pitt v Holt, and also on the rights of bene¿ciaries to information from trustees Part analyses resulting trusts, constructive trusts, equitable estoppel and the nature of ¿duciary liabilities: these areas are central to the study of trusts law and also pivotal in the scholarly debates about equity, trusts and unjust enrichment There has been a large amount of new case law, particularly in relation to the treatment of bribes and commercial joint ventures Part considers the interaction of principles of trusts law and proprietary estoppel with equitable principles of unconscionability and family law in relation to the acquisition of rights in the home Chapter 15 has been extensively updated to account for the decision of the Supreme Court in Jones v Kernott and its impact on the interpretation of the decision of House of Lords in Stack v Dowden and previous case law This is one of the most dynamic areas of equity and trusts: the discussion sets out a categorisation of the various streams of case law, before considering in detail the particular problems raised by equitable estoppel, relationship breakdown, human rights law and philosophical models of social justice Part contains three chapters which consider the variety of claims available in relation to breach of trust: whether brought against trustees in person, or against persons who have unconscionably and knowingly received trust property or dishonestly assisted in a breach of trust, or to trace proprietary rights in equity or at common law The chapter on dishonest assistance and unconscionable receipt has been completely re-cast to account for the burgeoning case law in this area, and to consider some of the fascinating theoretical and practical questions which it raises Part considers the way in which commercial people use trusts and other equitable principles such as the Àoating charge and mortgages in their transactions There is also a discussion of themes in international trusts law which casts new light on the English case law principles From this discussion emerges an account of the uncomfortable assimilation of general equitable doctrine into commercial activities juxtaposed with commerce’s enthusiastic acceptance of some techniques found in express trusts and equitable charges Part considers the welfare uses of trusts The chapter on Charities has been rewritten in large part to account for the Charities Act 2011 That Act was passed just after the previous edition was submitted and therefore its treatment in the last edition was a little rough around the edges The interaction between the old case law, which remains in force, and the new categories of ‘charitable purpose’ promises to be a fascinating area for the future Part considers the established categories of equitable remedies – speci¿c performance, injunctions, rescission, recti¿cation and set-off for undue inÀuence – as well as a comprehensive round-up of less conspicuous equitable remedies, including subrogation, account, equitable damages, remedies for breach of trust, and the appointment of receivers Many of these equitable doctrines and remedies are frequently overlooked in the calls made by restitution lawyers to ‘replace equity’ with principles of unjust enrichment What emerges from this discussion is a demonstration of equity at its purest: discretionary, imaginative and always in Àux For the ¿rst time there is a comprehensive discussion of the equitable doctrine of con¿dence and of the law relating to the award of super-injunctions Part 10 sets out in two short essays a compilation of the main themes of the book First, a consideration of the theoretical underpinnings of the law of property as put to work in the context of trusts and equity; then the ¿nal chapter of the book considers the theoretical nature of equity and also examines the various meanings associated with the important term ‘conscience’ in this context It has always been my aim to make this a progressive book as viii Preface well as a comprehensive textbook: it is in these ¿nal chapters that I set out to achieve that goal most obviously Two companion websites – containing updates on all important cases A library of further materials can be found at http://www.alastairhudson.com/trustslaw, including extended essays on the nature of express trusts, of restitution of unjust enrichment, and of trusts implied by law, as well as essays on unit trusts, co-operatives and public interest trusts That site has developed a large number of casenotes on new decisions reached by English and other courts between editions of this book It also contains a number of short podcasts on issues of particular concern to students in examinations, videos explaining some knotty problems of trusts law, and issues which are of particular academic interest All of my undergraduate lectures and many other podcasts besides are available free of charge on that website too My publishers maintain a companion website (www.routledge.com/cw/hudson) for purchasers of this book which is also updated periodically to account for new developments in equity and trusts: that website will continue to grow with essays, casenotes and commentaries on this and other areas of law and legal theory This new edition aims to update the book to account for important decisions in the Supreme Court in Pitt v Holt, in Jones v Kernott and in Lehman Brothers v CRC; and many other key cases besides, including FHR European Ventures v Mankarious, Armstrong v Winnington and Independent Trustee Services v GP Noble and Morris Otherwise, the law is stated as it was at the various times when the various chapters were written between February 2012 and February 2014 References to nearly 250 new cases have been included since the sixth edition of this book, making it one of the most comprehensive treatments of this topic in print today Updates on later developments will be made available on-line, as described before, in the form of documents and podcasts Consequently, this book will remain as up-to-date as possible From Routledge, I would like to thank Fiona Briden for her ever-professional and always good-humoured help in the preparation of this book, and also Damian Mitchell for a thousand kindnesses There are other people I would like to thank for help and comradeship which, while not necessarily directly connected to this book, were essential to its completion in many other ways: in no particular order but with boundless thanks Prof Geraint Thomas and Dr Helena Howe As this book aims to show, nothing is perfect but thinking can make it seem so Alastair Hudson Guide to the Companion Website Visit the Equity and Trusts Companion Website at http://www.routledge.com/cw/hudson, and the author’s own website http://www.alastairhudson.com/, to discover a comprehensive range of resources designed to enhance the learning experience for students of equity and trusts RESOURCES Podcasts Listen to a comprehensive series of short podcasts by the author covering an entire equity and trusts law course, discussing and clarifying key topics from the book, together with updating podcasts Essays A range of essays discuss new developments and provide pathways into further research Video introduction Familiarise yourself with equity and trusts through the author’s introductory video presentation Vodcasts Short videos in which the author explains some of the more complex issues arising in trusts law so that they make sense Documentaries See key topics brought to life through a set of brief video documentaries ¿lmed on location 1336 Bibliography Smith, R, ‘Oral contracts for the sale of land’ [2000] 116 LQR 11 Snaith, I, The Law on Co-operatives, 1984, London: Waterlow Snaith, I, ‘Mutuals and co-operatives: property, obligations, business and dedicated assets’, in Hudson, AS (ed), New Perspectives on Property Law, Obligations and Restitution, 2003, London: Cavendish Publishing, 345 Snell, Equity, 1868, 1st edn Sparkes, P, A New Land Law, 1999, Oxford: Hart Spry, I, Equitable Remedies, 8th edn, 2010, Sydney: LBC Spry, I, The Principles of Equitable Remedies, 8th edn, 2010, London: Sweet & Maxwell Stephenson, ‘Co-trustees or several trustees?’ (1942) 16 Temple ULQ 249 Stevens, ‘Election between alternative remedies’ [1996] RLR 117 Stewart, A, Rethinking Housing Law, 1996, London: Sweet & Maxwell Story, J, Commentaries on Equity Jurisprudence, 1839, Boston: Little and Brown Story, J, Commentaries on Equity Jurisprudence, 13th edn, ed Bigelow, 1886, Little and Brown Swadling, W, [1994] All ER Rev 259 (1994:1) Swadling, W, [1994] RLR 195 (1994:2) Swadling, W, ‘A new role for resulting trusts?’ (1996) 16 LS 110 Swadling, W, ‘Property and conscience’ (1998) 12 Trusts Law International 228 Swadling, W, ‘A hard look at Hodgson v Marks’, in Birks, P and Rose, F (eds), Resulting Trusts and Equitable Compensation, 2000, Oxford: Mans¿eld, 61 Swadling, W, Quistclose Trusts, 2004, Oxford: Hart Swadling, W, ‘The common intention constructive trust in the House of Lords: an opportunity missed’ (2007) 123 LQR 511 Sypnowich, C, The Concept of Socialist Law, 1990, Oxford: Clarendon Tee, L, ‘A merry-go-round for the millennium’ [2000] CLJ 23 Tennekoon, R, The Law and Regulation of International Finance, 1991, London: Butterworths Tennekoon, R, Legal Aspects of International Finance, 1992, London: Butterworths Tettenborn, A, [1980] CLJ 272 Tettenborn, A, The Law of Restitution in England and Ireland, 2nd edn, 1997, London: Cavendish Publishing Tettenborn, A, ‘Misnomer: a response’, in Cornish, W, Nolan, R, O’Sullivan, J and Virgo, G (eds), Restitution, Present and Future: Essays in Honour of Gareth Jones, 1998, Oxford: Hart, 31 Teubner, G, Law as an Autopoietic System, 1994, Oxford: Blackwell Thomas, G, ‘James I, equity and Lord Keeper John Williams’ (1976) English Historical Rev 506 Thomas, G, Taxation and Trusts, 1981, London: Sweet & Maxwell Thomas, G, Powers, 1998, London: Sweet & Maxwell Thomas, G, Powers, 2nd edn, 2012, Oxford University Press Thomas, GW and Hudson, AS, The Law of Trusts, 2nd edn, 2010, Oxford: Oxford University Press Thompson, EP, The Making of the English Working Class, 1963, London: Victor Gollancz; references are to the Penguin 1968 edition Thompson, M, ‘Constructive trusts, estoppel and the family home’ [2004] Conv Tiley, J, Revenue Law, 4th edn, 2001, Oxford: Hart Townsend, P, Poverty in the United Kingdom, 1979, Harmondsworth: Penguin Tudor, OD, Tudor on Charities, 9th edn, 2003, London: Sweet & Maxwell Underhill, A, A Practical and Concise Manual of the Law Relating to Private Trusts and Trustees, 3rd edn, 1889, London: Butterworths Underhill, A and Hayton, D, The Law of Trusts and Trustees, 16th edn, 2002, London: Butterworths Van Parijs, P, Real Freedom For All, 1995, Oxford: Oxford University Press Venables, R, Non-Resident Trusts, 5th edn, 1999, London: Key Haven Venables, R, The Taxation of Trust Post Finance Act 2006, 2006, Oxford: Key Haven Publications Vernon, S, Social Work and the Law, 1998, London: Butterworths Bibliography 1337 Virgo, G, ‘Undue inÀuence and misrepresentation after O’Brien’, in Rose, F (ed), Restitution and Banking Law, 1998, London: Mans¿eld, 70 Virgo, G, Principles of the Law of Restitution, 1999, Oxford: Oxford University Press Virgo, G, ‘Vindicating vindication: Foskett v McKeown reviewed’, in Hudson, AS (ed), New Perspectives on Property Law, Obligations and Restitution, 2003, London: Cavendish Publishing Virilio, P, Vitesse et politique: essai de dromologie, 1977, Paris: Galilee Virilio, P, Speed and politics, 1986, New York: Semiotext(e) Virilio, P, La bombe informatique, 1998, Paris: Galilee Virilio, P, Information Bomb, 2000, Verso: London Walsh, ‘Unit trusts’, in Grbich, YFR, Munn, GD and Reicher, H, Modern Trusts and Taxation, 1978, Melbourne: Butterworths Australia, 36 Warburton, J, [1987] Conv 217 Waters, D, The Constructive Trust, 1964, London: Athlone Waters, D, ‘Reaching for the sky – taking trusts laws to the limit, in Hayton, D (ed), Extending the Boundaries of Trusts and Similar Ring-fenced Funds, 2002, Hague: Kluwer Law International, 59 Watson, J, Psychology from the Standpoint of the Behaviourist, (1919), 1994, London: Routledge Watts, P, (1996) 112 LQR 219 Weil, S, ‘Human Personality’, reproduced in Miles, S (ed), Simone Weil – An Anthology, 2005, London: Penguin, 69 (originally published by Virago Press, 1985) Wilken, S and Villiers, T, Waiver, Variation and Estoppel, 1999, London: John Wiley Wong, S, ‘Constructive trusts over the family home: lessons to be learned from other Commonwealth jurisdictions’ (1998) 18 LS 369 Wong, S, ‘When trust(s) is not enough: an argument for the use of unjust enrichment for home-sharers’ (1999) 7(1) FLS 47 Wong, S, ‘Rethinking Rosset from a human rights perspective’, in Hudson, AS (ed), New Perspectives on Property Law, Human Rights and the Home, 2003, London: Cavendish Publishing, 79 Wood, P, Law and Practice of International Finance, 1980, 1995, London: Sweet & Maxwell Woodward, L, The Age of Reform: England 1815–1870, 2nd edn, 1962, Oxford: Oxford University Press Wooldridge [1987] JBL 329 Worthington, S, Proprietary Interests in Commercial Transactions, 1996, Oxford: Clarendon Worthington, S, ‘Reconsidering disgorgement for wrongs’ (1999) 62 MLR 218 (1999:1) Worthington, S, ‘Fiduciaries: when is self-denial obligatory?’ [1999] 58 CLJ 500 (1999:2) Youdan, T, ‘Formalities for trusts of land, and the doctrine in Rochefoucauld v Boustead’ [1984] 43 CLJ 306 Youdan, TG (ed), Equity, Fiduciaries and Trusts, 1989, Toronto Zimmerman, The Law of Obligations: Roman Foundations of the Civilian Tradition, 1996, Oxford: Oxford University Press Index absolute title 52, 54–5, 72 abstract purpose trusts see purpose trusts abuser–abused relationship 692–3 accounts: duty to render 403–4; falsi¿cation and surcharging 404; liability see liability to account; senses 1272–3 accumulation trust, endowments 55 administrative unworkability 175–6 advancement: ‘advancement or bene¿t’ 479–80; basic powers 478–80; inherent jurisdiction of court 480; presumptions see under presumed resulting trusts after-acquired property: non-parties enforcing covenant 274; ownership 271; parties enforcing covenant 272–4; problem areas 269–70; promise under covenant 271–6; settlement not to be unmade 272; summary of principles 279–80; third party bene¿t 274–6; trust of promise itself 278–9; trustee enforcement 276–9 agency: mortgages 1255–6; trusts distinguished 72 agents: appointment 480–1, 481–2; asset management functions 481–2; duties 481–2; functions 481–2; obligations, unauthorised pro¿ts 626–7; unincorporated associations as 228–9 animal welfare 1152–4 anonymised injunction, de¿nition 1212 appointment: agents 480–1; custodians 480–1; delegation 480–1; discretionary trusts 54–5; nominees 480–1; trustees see under trustees Aristotle 11–13, 15, 42, 43, 680–1, 834, 844 armed forces of the crown 1154 arts/culture/heritage/science advancement 1149–50 ascertainability 174–5 asset protection trust 82 associations see unincorporated associations Austen, Jane 61, 75–6, 78–9, 794 Australia, unconscionable actions 791–3 automatic resulting trusts: categorisation issues 509–10; circumstances 510–11; failure of trust 512–13; meaning 509; no declaration by mistake 511–12; presumed resulting trusts compared 507–9; surplus property 513–14; unincorporated associations 514–16 bad faith, change of position and 936–8 bailment, trusts distinguished 71 Baker, P 36–7 balance of convenience 1189–90 balance sheet approach, trusts of homes 731–40 bank accounts: and breach of regulatory obligation 133–6; electronic 919–20; express trusts 66–7, 102–3; knowing receipt and dishonest assistance distinction 1030; presumed resulting trusts 529–30 bankruptcy of bene¿ciary 814–16, 821–4 bare trusts: objects 163; trustee 54 bene¿ciaries: acting fairly between 447–8; attesting to will 313–14; capital/income 360–1; control of trustees 420–1; express trusts 52–3, 57–9, 91; failure by bene¿ciary to alleviate loss 883; infant see infant bene¿ciaries; land see trusts of land; mixed funds 906–7; personal obligations 65–6; principle rights 179–80; proprietary rights 64–6, 181–2, 185–6; with right to information provision 399–400; Saunders v Vautier principle 182–5; see also bare trusts; protective trusts bene¿ciary principle: arguments against 218–19; basic principle 197–9; basic requirement 179–80; case law approaches 219–20; perpetuities 200–1; property right and 209–10; strict approach 200–2; tax avoidance 84; transfer as gift 210–12; see also people trusts; perpetuities; purpose trusts bequests see charitable purpose Bevan, Aneurin 43 Birks, P 502–3, 557, 950 bona ¿de purchaser for value without notice 945–8, 1023 Index breach of con¿dence 1198–202, 1208–9 breach of trust: allocation of liability 864–6, 887–8; apportioning liability 865–6; basic of liability 858–66; basic principles 856; committed by another trustee 882; compensation see equitable compensation; concurrence by bene¿ciary 886; context of liability 348–9, 856–7; defences 882–7; development of liability 859–60; dishonest assistance and 965–7; excuses 884–5; investment 430–1, 432–3, 462–7; investment issues 863–4, 882; joint/several liability 864–5; limitation period 888; loss see loss; meaning 462, 858; nature of liability 857; non-fudiciary actions 885–6; permitted actions 885–6; remedies, choice between 887; remedies, outline 867; restitution 867–9; stranger liability 955; Target Holdings v Redferns case 860–1, 879–80; termination claims 880–2 bribery: common law debtor–creditor approach 571–2; company directors’ obigations 586–7; constructive trust approach 572–8, 576, 577–8; diminution of property value 577; equity traditionalist argument 585–6; examples 577–8; fudiciaries and 569–71, 575–6; pro¿ts 569–84; secret commissions 578–80; Sinclair Investment v Versailles Trading decision 580–7 Browne-Wilkinson, Lord 40–1, 42 Canada, unjust enrichment 790–1 Cayman Islands: STAR trusts 1053–4 certainty: intention 92–116; objects 145–78; principles 91–176; subject matter 116–45; see also uncertainty Chancellors see Lord Chancellor; ViceChancellors Chancery Courts 18, 19 change of position: activity 938–9; bad faith 936–8; basis of defence 935–6; before receipt of property 943; as equitable defence 940–1; future liabilities 941–3; knowing receipt 1023–4; measurement of comparative inequity or harm 938; mistaken payments 939–40; open nature 936; passing on 945; windfall payments 939–40 chaos, equity and 1311–13 charges 1091; Àoating 130–1; tracing, claims 928–30; trusts, distinguished 109–10 charitable purpose: amateur sport advancement 1150–1; animal welfare advancement 1152–4; armed forces of crown, promotion of ef¿ciency 1154; arts/culture/heritage/science advancement 1149–50; citizenship advancement 1149; conÀict resolution/ 1339 reconciliation 1151; emergency services, promotion of ef¿ciency 1154–5; environmental protection/improvement advancement 1151; equality/diversity promotion 1151; health advancement 1148–9; human rights advancement 1151; recreational charities 1155–7; relief of those in need 1151–2; religious/racial harmony promotion 1151; saving of lives 1148–9; statute 1147–8 charitable status: exclusivity 1113–14; formalities 1110–11; negative ¿nding 1112–17; political purposes 1114–16; suf¿cient intention 1112–14; tax advantages to charities 1111–12; tax advantages to third persons 1111–12; trust law advantages 1108–9 charities: basic principles 1099–100; case law roots 1103–4; ‘charitable purposes’ 1104–8; as companies 1109–10; context 1100–1; cy-pres doctrine see cy-pres doctrine; education see education; historical roots 1102–4; poverty see poverty relief; pro¿t role 1144; public bene¿t see public bene¿t requirement; purposes bene¿cial to the community 1143–8; regulation 1166; religion see religion; statutes 1101–2; as trusts 1108–9 chattels 1170–1 children: and property law 842–3; superinjunctions 1222; trusts of land 812–13, 820–1; see also infant bene¿ciaries Chinese walls 375–6, 404–7, 1207–8 citizenship advancement 1149 civil law and ownership/express trust, distinction 60 cohabitees/cohabitants 705–6, 843–4 Coke, Sir Edward 37 commercial transactions: basic themes 1037–8; equity and 1039–42, 1060–1; equity as risk 1059–60; see also loan moneys; Quistclose trusts commercial trusts: development 1042–4; removal of trustee 349–50; trustee duties, limitation 418–19 common intention: birth of 713–15; Gissing v Gissing case 715–17; mistake 546–7; resulting trusts 506–7, 711–17; rights not based on 763–4 common intention constructive trusts: agreement 719–22; approaches 725–7; bright-line development 795–6; conceptual issues 793–9; conduct 722–3; court discretion 728; domestic work and property rights 727–8; excuses 729; feminist objection 794; foundations 717–19; home and 630–1; Lloyds Bank v Rosset case 719–25; mapping 718; need for detriment 723–5; phantom common intention 793; roots 1340 Index 717; strict application dif¿culties 729–31; substantive unfairness 729–30; supremacy of money 795; unconscionable actions 762–3 common law: balance with equity 1311; damages equitable compensation, distinguished 875–6, 877; distinction from equity 4–5, 19; distinction’s impact 19–21; as engine of fraud 34; estoppel 679; fusion with equity 21–2; origins 16–17; remedies, interim injunctions and 1190; tracing see common law tracing; see also equity common law tracing: basic principles 896–7; claims 896–7; electronic transfers 896; equitable tracing, distinguished 894; limitations 897; new directions 897–9 company law: conÀicts of interest 620–2; corporate opportunity doctrine 612–17; equitable remedies 1057–9; unauthorised pro¿t remedy 622–4 compensation see equitable compensation complexity science 1310–11 compound interest 1276–7 con¿dence, equitable doctrine of: basic issues 1197–8; breach of con¿dence 1198–202, 1208–9; central principles 1205–7; development 1202–4; history 1198–202; open-textured nature 1204–5; tort of misuse of private information compared 1210–11 con¿dential information: contexts 1207–8; de¿nition 1206–7; duties 375–6, 404–7; misuse 1017–18; obligation to disclose 401–3; see also con¿dence, equitable doctrine of conÀicts of interest, avoidance 367–75, 601–3 conscience: constructive trusts 553–5, 648–9, 949–50; equity and 8–9, 330–1; in ethical philosophy 1306–8; meaning of 9–11; obligations on trustees 62–4; paradox within equity 1305–6; sovereign’s 9; teleological focus 27–8; trustee duties and 347 consensual transfer 948 constitution of trusts: completeness 244–5; ‘doing everything necessary’ 257–65; general principle 245–6; improperly constituted 253–5; land 243, 246–7; personal property 246; settlor’s proprietary right 247–50 constructive fraud 1245–6 constructive trusts: agreement relating to property 629–37; basic principles 547–9; bribery see bribery, pro¿ts; Cobbe v Yeoman’ Row decision 561–4; coherence of doctrine 646–8; common intention see common intention constructive trusts; conscience see conscience: constructive trusts; conveyances 631–7; de son tort 642–3; de¿nition 50–1; ‘doing everything necessary’ 566–7; English language analogy 650; estoppel licenses 676–8; formal exceptions 250–1; fraud see under fraud; fraudulent misrepresentation see fraudulent misrepresentation; fudiciary obligations 552–3; fundamentals 549–51; institutional nature 552; issues 646–50; ‘keeping out of the market’ 564; killing see killing, pro¿ts; knowledge 553–5, 558; land 558–64; potential application 553; pre-payment protection fund 567–9; proprietary estoppel, distinguished 796–9; proprietary and personal claims, distinguished 551–2; proprietary rights 555–6; Quistclose trusts 1074–6; remedial 649–50; sale of land 632–6; sale of personalty 636–7; secret trusts as 324–5; statute as engine of fraud 565–6; sympathy 648–9; theft, pro¿ts 589–92; unconscionable actions 558–69, 762–3; undue inÀuence 597; voluntary assumption of liability 637–42; Westdeutche Landesbank case 556–8 contracts: contractarian argument 1044–6; estoppel licenses 677; exclusion of liability 1047–50; investment 1046–7; risk and 1059–60; sale of land 632–4; sale of personalty 636–7; speci¿c performance see under speci¿c performance; trusts distinguished 70–1; uberrimae ¿dei 1232 control of trustees: administration 422; basic rules 420; by bene¿ciaries 420–1; by courts 421–2; directions 422; judicial review 422–4; nature of power and 421; relevant/irrelevant considerations and 424 conversion 1282 Cooke, E 649–50 corporate contexts, liability to account 1024–30 corporate opportunity doctrine 612–17 Court of Star Chamber 18 court structure: Chancery Courts 18, 19; post-1873 21–2 Cowper, Lord 15 creation of trusts: constitution see constitution of trusts; declaration see declaration of trust; disposition see equitable interests, disposition; exceptions to formalities 250–3; gifts see gifts; main principles 241–2; speci¿c formalities 242–5 Crusades 45–6 custodians: appointment 480–1; role 482 customers, as expression 167 cy-pres doctrine: case law 1158–60; charitable intention 1157–8; exclusivity of purpose 1160–1; express private trusts, distinguished 1158; future 1165–6; impossibility after commencement of trust 1160; impossibility at commencement of trust 1158–9; small charities 1165; statutory provisions 1161–6; where objects fail 1164–5 Index damages: equitable see equitable damages; equitable compensation, distinguished 875–6, 877; exemplary 879; injunction, in lieu of 1196–7; injunctions, measure 1197; speci¿c performance, in lieu of 1178–9 de son tort࣠: constructive trusts 642–3; liability to account 646; trustees 642–3 deceit, tort of 321, 1176, 1231 declaration of trust: on death 243; inter vivos over land 243, 246–7; inter vivos over personal property 244 delegation: agents see agents; appointment 480–1; custodians see custodians; devolution, of trust powers 484–5; liability for acts 483; nominees see nominees; power of attorney 482; standard of care for trustees 483–4 Denning, Lord 40, 676–7, 678 detriment: common intention constructive trusts 723–5; estoppel 650–1; proprietary estoppel 664–6 devolution, of trust powers 484–5 Dicey, AV 75 Dickens, Charles: Bleak House 19, 21, 61 directors: duties 624–6; obligations 586–7, 1057–9 disclaimers, trustee duties 420 disclosure, obligation 401–3 discretionary trusts: bene¿ciaries’ rights 187–90; certainty of objects 155–60; obligatory nature 155; power of appointment 54–5 dishonest assistance 645; basic principles 961–3; breach of trust and 965–7; defences 1023–4; investment advisors 1027–8; knowing receipt, distinction 1030; knowing receipt and 956–60; nature 965–8; proprietary claim 1004–6; rationale 964–5; remedy 1004–6; time/nature of assistance 966–7 dishonesty: Abou-Rahma v Abacha decision 987–90; alternative test 1019–20; Barlow Clowes v Eurotrust case 981–3; defendant’s evidence 986–7; objective test 968–74, 984–5; objectivity/subjectivity, distinction and combination 975–81; professional services and 999–1002; as risk 1002–4; state of authorities and judges’ dif¿culties 990–9; stranger’s liability 967–8; subjectivity 974–5; Twinsectra v Yardley case 981, 984–6 diversity/equality promotion 1151 divorce settlements 800 doctor-patient relationship 690–1 doctrine of notice 1243–5 documents: delivery/cancellation 1240, 1282; transfer of undue inÀuence 1264–5 donatio mortis causa 265–6 Douzinas, C 11 1341 duty of care: in case law 361–2; with delegation 483–4; reasonable 415–18; statutory 362–4, 434–6, 438 Dworkin, R 43 education: business/charity 1129–30; charitable principles 1126; de¿nition 1126–30; in-between cases 1132; independent schools 1133–4; infant bene¿ciaries 477; law students 1130; personal nexus test 1131–2; public bene¿t requirement 1130–5; research/ teaching/ideology 1127–8; sport and 1129 Eldon, Lord 39–40 election 1282 electronic bank accounts 919–20 Elias, G 1307 Elizabeth I 37 Ellesmere, Lord 5, 37 emergency services, promotion of ef¿ciency 1154–5 employer–employee relationship 691–2 English language: constructive trusts and 650; equity and 328–9 Englishness 1315–17 environmental protection/improvement 1151 equality/diversity promotion 1151 equitable charges 928–30 equitable compensation: basic terms 870–1; common law damages, distinguished 875–6, 877; compensation as part of equity 873–4; as equitable remedy 1275; liability to pay 872–3; for losses 870–4; restoration of value of fund 869–70; restorative/compensatory, distinguished 871–2; tort of negligence 876 equitable damages: jurisdiction 1275–6; statute 1276 equitable estoppel: express trusts and 334–6; mistake and 662–3; purpose 675–6 equitable interests, disposition: assignment 293; basic issues 280; contractual transfer 295–6; declaration of new trust 287–9; holding on for another 293–4; implied trusts and 296–7; resulting trusts and 504–5; signed writing requirement 280–4, 289–91; sub-trusts 291–2; summary of analysis 297–9; transfer with legal interest 284–6; variation see variation of trust equitable remedies: accounts see accounts; liability to account; compound interest 1276–7; damages see equitable damages; documents, delivery/cancellation 1282; equitable compensation 1275; mere equities 1283–4; modi¿cation of existing rights 1282–3; mutual bene¿t and burden 1284; receivers 1281; speci¿c restitution 1274–5; subrogation see subrogation 1342 Index equitable tracing: basic issues 899–900; bene¿ts 902–3; common law tracing, distinguished 894; conscience and 949–50; innocent volunteers 901–2; limitations 903–4; mixed funds see mixed funds; prior equitable interest 900–2; restitution and 950–1; see also tracing equitable wrongs 1251–2 equity: claimant must not equity 31; clean hands 31, 1185; commercial transactions and 1039–42; conclusion 1318–19; contexts 36–43; core principles 28–36; cultural place 1314; defence of 1060–1, 1303; delay 30–1; done as ought to be done 32–3; Englishness see English language; Englishness; equal equity 30; equality is equity 31–2, 43; as ethical construct 22–3; Àexibility 7, 327–8; as follower of law 29–30; foundations of 4–15; future in public law 1308–9; goals 1317–18; in Greek philosophy 11–13; human rights and 830; intent rather than form 32; intention to ful¿l obligation 33; Kant’s conception 13–14; legal history 16–22, 36–43; misrepresentation in 1251; nature of 1304–5; paradox and cool jazz 24–5; theoretical basis 833–4; trade and family roots 26–7 estoppel: basic elements 680–1; by representation 679–80, 944–5; commercial contexts 679–80; common law 679; detrimental reliance 650–1; meaning 647–8; nemo dat principle 679; promissory 651, 678–9; proprietary see proprietary estoppel; secret trusts and 326; as single doctrine 648–51; unconscionability 649–50, 651 ethical philosophy 1306–8 evidence: parole evidence rule 317; secret trusts and 316–18; see also sham devices evidential uncertainty 173–4 experts, use of unconnected third person 168–9 express trusts: based on circumstances 94–5; bene¿ciaries 52–3, 57–9, 91; certainty principles 91–176; civil law ownership distinction 60; commercial intentions 96–100; creation see creation of trusts; cy-pres doctrine and 1158; de¿nition 49; equitable estoppel and 334–6; inference by court 93–4; intention to create 92–3, 112–14; paradox 327–9; partial/total failure 177–8; people/legal capacities distinction 59–60; property problems 1289–90; Quistclose trusts 1072–4; settlor/trustee/bene¿ciary relationship 51, 89–91; settlors 52, 89–90; structure 51; techniques 333–4; trustees 52–7, 90–1; trusts of homes 710–11; wealth redistribution and 332–3 fair dealing principle 373–4, 629 family law, and law of home: Children Act (1989) 842–3; co-habitees/cohabitants 705–6, 843–4; context 839–41; married couples 843–4; statute 841–2; see also rights in the home ¿duciaries: abuser–abused 692–3; constructive trusts and 552–3; de¿nition 682–3; doctor– patient 690–1; duties 55–7, 683–5; employer– employee 691–2; human rights and 694; mortgagee–mortgagor 689–90; new categories 688–93; remedies based on responsibilities 686–8; role 682; unauthorised pro¿ts see under unauthorised pro¿ts ¿duciary mere powers: alternative approaches 153–4; bene¿ciaries’ rights 190; objects, certainty test 151–3; permissive nature 150–1 ¿nancial advisors/¿nancial institutions, liability to account 1026–30 Financial Conduct Authority (FCA) 458–9 Finch, Sir Heneage see Nottingham, Lord ¿xed trusts: nature of 149–50; objects 149–50; trustee 54 Àoating charges, trust distinguished 130–1 Francis’s Maxims of Equity 38 fraud: complex commercial 1018–19; constructive 1245–6; constructive trusts and 592–7; equity and 34, 35–6; as formality exception 251–3; fraud theory 305–6, 320–2; on a power 497; pro¿ts 592–7 fraudulent misrepresentation: no constructive trust 594–5; as proprietary constructive trust 595–7 freedom of expression 1219–20, 1222–3 freezing injunctions: basic principles 1191–2; core test 1192–3; nature 1191–2; substantive proceedings requirement 1193; worldwide 1194 French, Marilyn: The Women’s Room 800 friends: as expression 165–7; good friends 152–3 FSA see Financial Services Authority fully sectret trusts: communication 309–10; consequences of failure 311–12; creation 307–8; half-secret, distinction 303; intention to bene¿t 308; meaning 303, 307; of¿ce of trustee 310–11 fungible property see intangible property Galsworthy, John 81 Giddens, A 1313 gifts: continuing intention requirement 267; donatio mortis causa 265–6; enforcement of promises 268–9; future speci¿c 478; imperfect 255–6; intention 114; mere motive and 212–13; perfecting imperfect gifts 265–9; Index Strong v Bird rule 266–8; to unincorporated associations 223–5; transfers of property as 210–12; trusts and 329–30; trusts distinguished 72–3; voluntary 524–6 Goff, Lord 8, 41 ‘good friends’ 152–3 Hale, Baroness 42 half-secret trusts: acceptance 313; bene¿ciary attesting to 313–14; communication 312–13; creation 312; meaning 303–4, 312; see also secret trusts Hatton, Sir Christopher Hayton, D 693–4 health advancement 1148–9 Hegel, George Henry II 16–17, 42–3 Henry VIII 18 Hogarth, William: Marriage a la Mode vi–vii, 60–1 home see rights in the home; trusts of homes human rights: advancement 1151; applicable norms 835–6; de¿nition issue 829–30; equity and 830; ¿duciary liability 694; principles 835–9; in property 836–7; right to family life 837–8; right to freedom of expression 1219–20, 1222–3; right to possessions 839; right to privacy 1219, 1220; rights and freedoms, distinguished 834–5; superinjunctions see superinjunctions; theoretical basis 831–3; trusts of land 825 hyper-injunctions 1227–8 identi¿cation: purpose trusts 201–2; segregated property 144 immediate possession 203–4 implied trusts: duties applicable to 344; formality exceptions 250–1 in personam: acts 23, 33; civil law rights 60; speci¿c performance 1168–9; trustees, rights against 181–2 incorporation by reference 319–20 infant bene¿ciaries: capital 478; court’s inherent jurisdiction 478; income during infancy 476–7; income under trust 474–6; intermediate income 478; ‘maintenance, education or bene¿t’ 477; maintenance powers 474–8; variation of trusts 495 information provision: basic duties 392–3; bene¿ciary with right to 399–400; existence/ nature of trust 393–4; obligations to give reasons 400 information provision, trust documents 394–7; nature of documents 397–8; new analysis 397; precluded 394; scope of right 360–1; traditional approach 394–7 1343 injunctions: basic principles 1181–2; classi¿cation 1187–8; clean hands 1185; common law interaction 1196–7; common law remedies, distinguished 1183–5; courts’ power 1182–3; damages inadequate 1185; damages in lieu of 1196–7; damages’ measure 1197; equitable principles 1185–7; freezing see freezing injunctions; hyperinjunctions 1227–8; interim see interim injunctions; mandatory 1187; nature 1182–7; no delay 1185–6; not in vain 1186; prohibitory 1187; quia timet 1187–8; right affected 1186; search orders 1194–6; superinjunctions see superinjunctions; undue hardship to respondent 1186–7 insider dealing 461 insolvency: bankruptcy of bene¿ciary 814–16, 821–4; ‘investment ¿rms’ holding assets 132–3; Lehman Brothers case 132–42; money in bank accounts and breach of regulatory obligation 133–6; Quistclose trusts 1086; resulting trusts 540–4; and rights of bene¿ciaries 194–6; securities held within investment banking groups 140–2; subject matter and law of ¿nance 131–42 insubstantial interests 1173–4 intangible property 120–9; ‘achieving equity’ approach 126; after-acquired property 128; certainty of intention and 125; in commercial law 126–8; Hunter v Moss approach 124–5; non-transferable assets 128–9 intention: certainty 92–116; commercial 96–102; creation of trust 92–3, 112–14; gifts and 114; non-commercial 100–2; share in ¿nancial transactions 103–6 interim injunctions: balance of convenience 1189–90; basic principles 1188–9; common law remedies and 1190; strong prima facie case 1189–90 international trusts law: and ‘bene¿ciary principle’ 84; offshore trust services 1051–2; protectors and enforcers 1055–6; recognition of trusts 1050–1; revocable trusts 1056–7; sham devices 1057; STAR trusts, Cayman Islands 1053–4 interpretation: trust provisions 409–10; wills 107–9 intestacy, secret trusts and 304, 316 investment: advisors see investment advisors; approach to questions 430; authorised persons 455–61, 467; banking see under insolvency; basic principles 426; best return 444–6; breach of instrument terms 430–1; case law 443–53; case law principles 431–2; conduct of 1344 Index business 458–9; contracts 1046–7; controlling interest 467–8; delegates’ control 468–70; development of rules 426–7; diversi¿cation 440–1; excluded categories 457–8; exclusion clauses 464; exclusion of liability 464–5; express powers 453–4; general power 433–4; insider dealing 461; in land 443; liability levels 465–6; liability measurement 463; limitation of liabilities 466–7; management 467–70; market abuse 459–60; market comparisons 452–3; meaning 434; meaning of ‘trustee’ 429; misfeasance 459–61; misleading statements 460; money laundering 460–1; portfolio management 449–51; private trusts and 427–8; professional advice 441–3; prudent businessperson standard 446–9; regulation 455–61; selection 467–70; standard of care see duty of care; standard criteria 438–41; standard market practice 451–3, 463; statutes 428–30, 431, 434–8; strict construction of powers 454; suitability 439–40; unauthorised 462–3 investment advisors: context of advice 1026–7; dishonest assistance 1027–8; knowing receipt 1028–30 Islamic law 46 James I 17, 37 Jessel, Sir George 38–9 joint breach of trust 864–5 joint tenancy/tenants in common 223, 231–2, 827 joint trustees 348 joint ventures: land 559–61; proprietary estoppel 673–6 Jones, G 41 judicial review, trustees’ actions 422–4 Kant, Immanuel 13–14 killing, pro¿ts 587–9 knowing receipt: basic principles 1516; bona ¿de purchaser for value without notice 1023; change of position 1023–4; complex commercial fraud 1018–19; context 1015–16; defences 1023–4; developments in treatment 1019–22; dishonest assistance, distinction 1030; dishonest assistance and 956–60; dishonesty see dishonesty; investment advisors 1028–30; issues with receipt 1008–9; meaning 1516–17; misuse of con¿dential information 1017–18; nature of knowledge 1012–14; nature of receipt 1007–9; release 1024; remedy 1023; subjectivity of knowledge 1016–17; test for knowledge 1014–19; unconscionability 1009–12, 1022–3; unjust enrichment and 1020–1 laches 30–1 land: constructive trusts 558–64; declaration of trust 243, 246–7; investment in 443; joint ventures 559–61; sale 632–6; speci¿c performance and 1169–70; see also trusts of land Larkin, Philip 78 Law Commission, on trustee duties 419 legal title see title liability of strangers see stranger liability liability to account: categories 1273–4; as constructive trustee 644–6; de son tort 646; dishonest assistance 645; employees/personal 1024–6; ¿nancial advisors/¿nancial institutions 1026–30; personal 960–1; tracing, comparison 893; unconscionable receipt 644–5 liens 930–1 life tenants 163, 194, 248–9, 271, 357–8, 359, 361, 447–8 loan moneys: commercial approach 1083–4; equitable device 1086–8; loan contracts 1082–3; non-loan moneys 1088–90; third party rights 1090; transfers 1067–8; see also commercial transactions; Quistclose trusts Lord Chancellor: constitutional position 18, 42–3; jurisdiction 17–18, 21; medieval of¿ce 17–18; as sovereign’s conscience 9, 1317 loss: breach of trust and 862–4; causal link 882, 1032; equitable compensation for 870–4; failure by bene¿ciary to alleviate 883; valuation see valuation of loss Maccles¿eld, Lord 18 maintenance: ‘maintenance, education or bene¿t’ 477; powers 474–8 Maitland, FW 11, 1315 Mareva injunctions see freezing injunctions married women, limited rights 75–7 Master of the Rolls 17 media see superinjunctions mere equities 1283–4 mere powers see ¿duciary mere powers Miller, D 844 misfeasance, investment 459–61 misleading statements 460 misrepresentation: in equity 1251; fraudulent 1231; innocent 1231–2; mortgages 1256; rescission 1231–2; speci¿c performance 1176 mistake: automatic resulting trusts and 511–12; change of position 939–40; common 1233, 1238; common intention 546–7; equitable estoppel 662–3; equity and 1234; of fact/law 1235; proprietary estoppel 652–3; recovery of property 544–5; recti¿cation 1238–9; restitution 1178; resulting trusts 544–7; scope Index of equity 1234; speci¿c performance 1177–8; tracing 915–16; in trustee powers 391–2; unilateral 1233, 1238–9 mixed funds: approaches compared 915; basic issues 904; bene¿ciary election approach 906–7; ¿rst in, ¿rst out approach 912; honest trustee approach 905–6; innocent volunteer 907–15; payments in and out 911–12; proportionate share 912–14; trustee’s own money 905–7; two trust funds 907–15 money: laundering 460–1, 896–7; tangible money theory 1297–8; transactions, speci¿c performance 1172–3 moral obligations, trusts distinguished 106–9, 113–14 More, Sir Thomas 11 mortgages 1091; included in trust property 468; mortgagee–mortgagor relationship 689–90 mortgages, setting aside: agency 1255–6; attention of mortgagee 1257–60; Barclays Bank v O’Brien case 1253–6; basic principles 1252; burden of proof 1260–1; certi¿cate that advice taken 1262–3; CIBC v Pitt 1256–7; context 1253; manifest disadvantage 1257–9; means of discharging duty 1261–5; misrepresentation 1256; part or whole 1267–70; Royal Bank of Scotland v Etridge (No 2) 1259–60; solicitor advising more than one party 1266–7; solicitor’s liability 1265–7; TSB v Cam¿eld 1267–8, 1269–70; undue inÀuence 1254–5, 1264–5; vulnerable people 1263–4 Mulheron, R 1165 mutual bene¿t and burden 1284 mutual wills 638–42 natural justice ne exeat regno 1241 negligence: dishonesty and 999–1000; and gross negligence 414–15; tort of 876 nominees: appointment 480–1; role 482 Norman Conquest 17 notice, doctrine of 1243–5 Nottingham, Lord 37–8, 39 Oakley, A 322–3 objects: bare trusts 163; basic issue 145–6; ‘customers’ as expression 167; decisions on own facts 164–5; discretionary trusts 155–60; ¿xed trusts 149–50; ‘friends’ as expression 165–7; personal powers and 160–3; ‘relatives’ as expression 167; structure for dealing with 176–7; trusts and powers distinguished 147–9; uncertainty in words/expressions 165–7; see also certainty; uncertainty obligations, trustee see trustee obligations 1345 occupation, trusts of land 809–11 occupational pension schemes 1095 of¿ce of trustee 342–53 offshore trusts services 1051–2 overreaching 826–7 Parliamentary privilege, problem of 1227–8 parole evidence rule 317 passing on 945 patient–doctor relationship 690–1 payments: mistaken 939–40; mixed funds 911–12; pre-payment protection fund 567–9; windfall 939–40 pension funds, occupational 1095 people trusts: alternative interpretations 204; cases’ comparison 206–7; literalist approach 203–4; property, direct/indirect use/enjoyment 204–6; purpose trusts, distinction 202–10; strict approach 207–8 performance 1283 perpetuities: bene¿ciary principle 200–1; common law rules 215–16; forms of perpetuity clause 216; historical/cultural changes 215; principles 214–15; statutes 216, 217–18 personal liability to account 960–1 personal nexus test 1131–2 personal powers: non-¿duciary nature 160–1; in trust instruments 162–3; uncertainty of objects and 161–2 personal property, presumed resulting trusts 524–5 personalty, sale 636–7 phone hacking, superinjunctions and 1214–18 Pirandello, Luigi 1306 Plato 42, 43 pledge: meaning 1062–3; transfer of title and 1062–3 political purposes 1114–16 politics of trusts law 81–4 possession: immediate 203–4; unity of 813–14 possessions, rights to 839 poverty relief: bene¿ts for poor relatives 1125–6; cases 1117–20; charging for services 1125; charitable principles 1117; de¿nition of poverty 1120–2; de¿nition of relief and prevention 1122–3; examples of poverty 1120–1; limitations 1123–6; links to settlor 1125–6; public bene¿t requirement 1123–4; relief of those in need, charitable purpose 1151–2; social class issues 1122; statutory provision 1117 powers: investment see investment; trustee see trustee powers; trusts distinct from 73, 147–9; types 147–9 powers of attorney 482 1346 Index pre-payment protection fund 567–9 Press see superinjunctions presumed resulting trusts: automatic resulting trusts compared 507–9; bank accounts 529–30; categorisation issue 509–10; father and child 521–2; husband and wife 521, 522–3; meaning 508–9; personal property 524–5; presumptions of advancement 519–20, 521–4; purchase price see purchase price resulting trusts; real property 525–6; rebuttal 528–31; statute 521; summary of principles 544; tax avoidance 530–1; voluntary gifts 524–6 presumptions of advancement 519–20, 521–4 privacy right 1219, 1220 private information, misuse of: equitable doctrine of con¿dence compared 1210–11; see also superinjunctions pro¿ts: bribery see bribery, pro¿ts; from fraud 592–7; from killing 587–9; from theft 589–92; unauthorised see unauthorised pro¿ts promises: enforcement 268–9; property see after-acquired property promissory estoppel 651, 678–9 property: after-acquired see after-acquired property; control as right 1296–7; direct/ indirect use/enjoyment 204–6; estoppel licenses 677–8; fragility of understanding 1299–300; human rights 836–7; lightness and softness 1298–9; modern forms 1297–300; quasi-property rights 1294–5; receivers 1281; rights against people 1293–4; rights in a thing 1292–3; stolen 951–2; surplus 513–14; theory 1291–300; tracing see tracing; unconscienable actions 558–69; see also trust property proprietary estoppel: approaches 653–7; assurance/representation 658–64; Cobbe v Yeoman’s Row decision 673–6; common intention constructive trusts 730–1; compensating detriment 655–6; constructive trusts, distinguished 796–9; court’s discretion on remedies 666–70; detriment of claimant 664–5; features 651–2, 653; ¿nancial compensation 666–70; frustration of expectation 653–4; giving effect to promise 654–5; interest awarded 749–50; joint ventures 673–6; licenses 676–8; mistake and 652–3; personal detriment 665; promises enforced 268–9; remedies awarded 750–3; scope of remedies 666–72; test elements 657–65; trusts of homes 744–53; unconscionable actions 656–7, 758–9; underlying test 745–9; vitiating doctrine 671–2 proprietary rights: bene¿ciaries 57–9, 64–6, 181–2; multiple rights 113; settlor’s 247–50 protective trustspurpose 192; structuring methods 192–4 protectors and enforcers 1055–6 prudence: duty 347–8; investment and 446–9; reasonableness, compared 436–8 psychology of order 1311 public bene¿t requirement: bene¿t de¿ned 1144–5; charities 1106–8; civic amenities of community 1146–7; community de¿ned 1145–6; education 1130–5; individuals within commmunity 1146; poverty relief 1123–4; purposes bene¿cial to the community 1144–7; religion 1140–3; test 1167–8 purchase price resulting trusts: contribution to purchase price 526–8; principles 503–4, 520–1 purpose trusts: anomalous trusts 213–14; identi¿cation 201–2; mere motive and 212–13; people trusts, distinction 202–10; policy 199; as Quistclose trusts 1084; see also bene¿ciary principle Queen’s Bench Division 19 Quistclose trust: in abstract 1084–6; Barclays Bank v Quistclose decision 517–19; basic issues 1061–2; categorisation 518–19, 1068–90; commercial contexts 1084–90; constructive trusts 1074–6; decision 1065–7; de¿nition 516, 1064, 1090; equitable interest 1070–1; examples 1066–7; express trusts 1072–4; insolvency 1086; key decisions 1078–82; loan moneys see loan moneys; outline 516–17, 1064–5; as purpose trust 1084; as resulting trust 1069–72; retention of title 1071–2, 1076–8; Romalpa see Romalpa clause; source 1064–5; Twinsectra model 1076–8 racial/religious harmony promotion 1151 real property, presumed resulting trusts 525–6 receivers 1281 recreational charities 1155–7 recti¿cation: basic remedy 1238; common mistake 1238; delivery up/cancellation of documents 1240; nature 1095, 1238; ne exeat regno 1241; unilateral mistake 1238–9; voluntary settlements 1239–40 relatives, as expression 167 release: breach of trust 883; stranger liability 1024; trustee duties 420 religion: case law de¿nition 1136–7; charitable principles 1135–6; de¿nition 1136–40; issues 1142–3; public bene¿t requirement 1140–3; statutory de¿nition 1137–40 religious/racial harmony promotion 1151 Index remedies: breach of trust see breach of trust; ¿duciaries 686–8; knowing receipt 1023; proprietary estoppel see proprietary estoppel; tracing see tracing, claims; wrongs remedied 29 rescission: acquiescience 1237; af¿rmation 1236–7; basic remedy 1230; delay 1237; loss of right 1236–7; misrepresentation 1231–2; mistake 1233–5; restitutio in integrum 1236; restitution 1235; scope of equity 1230–1; undue inÀuence/unconscienable bargains 1232–3 restitution: breach of trust 867–9; mistake 1178; rescission 1235; speci¿c 1274–5; tracing and 950–1; see also unjust enrichment resulting trusts: automatic see automatic resulting trusts; basic principles 501–2; categories 503; circumstances 502–3; common intention see common intention; common intention constructive trusts 730–1; de¿nition 49–50; equitable interests, disposition 504–5; formality exceptions 250–1; foundation 505–6; illegality 532–9; illegality, intention 535–7; insolvency 540–4; meaning 502–3; mistake see mistake; presumed see presumed resulting trusts; purchase price see purchase price resulting trusts; Quistclose see Quistclose trusts; traditional principles 711–13; trusts of homes 739–40; unincorporated associations 238–9; vacuum abhored and 35; Westdeutsche Landesbank case 503–6 retention of title: meaning 1062; pledge 1062–3; Quistclose trusts 1071–2, 1076–8; right in speci¿c property 1062; transfer of title 1062–3 revocable trusts 1056–7 rights in the home: relationship breakdown 847–9; social justice and 844–9; see also family law, and law of home; trusts of homes risk society 1312–13 Romalpa case: Quistclose trusts, comparison 519; right in speci¿c property 1062 Roman law 11, 1317 sale of land 632–6; court powers 816–26 satisfaction 1283 saving of lives 1148–9 science of complexity 1310–11 search orders 1194–6 secret commissions 578–80 secret trusts: basic issues 301; categorisation 320–6; conscience and 324–6; as constructive trusts 324–5; disclaimer of trust 315; estoppel and 326; evidence problems 316–18; example 304–5; fraud theory 305–6, 320–2; fully secret see fully secret trusts; further property added 1347 315–16; half-secret see half-secret trusts; incorporation by reference 319–20; inter vivos 322; intestacy and 304, 316; modern view 322; obligations of trustees 318–19; parole evidence rule 317; problem issues 314; role 305–6; signi¿cance 301–2; split view 322–3; statutory background 302–3; time of creation 319; traditional view 320–2; trustee dies before settlor 314–15; types 303–4; voluntary assumption of liability 637–8; Wills Act exception 323 secrets see con¿dence, equitable doctrine of security 1091 segregated property: certainty requirement 142–5; development of law 142; mistake in identi¿cation 144; orthodox approach 118–20 self-dealing: principle 628–9; transactions 370–3 settlors: discretionary trust 54–5; express trusts 49, 52, 89–90; poverty relief 1125–6; proprietary right 247–50; resulting trusts 52 sham devices: de¿nition 111; international trusts law 1057; resulting trusts and 540–2; validity 110–12 shareholders’ rights 1057–9 Shaw, George Bernard 201, 1127–8 Simonds, Lord 40 social complexity 1309–11; science of complexity 1310–11 social justice: concept 844–5; equity as tool of 1312; example 845; rights in the home and 844–9 speci¿c performance: absence of writing 1175–6; basic principles 1167–8; chattels 1170–1; contracts, where available 1169–71; contracts, where unavailable 1171–5; contracts not mutually binding 1175; damages in lieu 1178–9; defences 1175–9; illegal/ immoral contracts 1171; in personam 1168–9; insubstantial interests 1173–4; land and 1169–70; lapse of time 1178; misrepresentation 1176; mistake 1177–8; money transactions 1172–3; nature of 1168–9; no breach requirement 1169; no consideration 1171–2; no enforceable contract 1175; personal skill 1172; supervision required 1174–5; unconscionable bargains 1176–7; undue inÀuence 1176–7 speci¿c restitution 1274–5 sport: amateur 1150–1; education and 1129 Star Chamber 18 STAR trusts, Cayman Islands 1053–4 stolen property 951–2 Story, J 37 stranger liability: assistance claim 955–6; basic principles 954; basis of claim 955–61; breach of trust 955; causation and loss 1032; defences 1348 Index 1023–4; dishonest assistance see dishonest assistance; knowing receipt see knowing receipt; liability to account in corporate contexts 1024–30; limitation according to fault 1031–2; nature 1031–4; personal liability to account 960–1; personal remedy 1030; receipt claim 955–6; receipt-based/assistancebased claim, distinction 1033–4 subject matter: certainty requirement 116–45; Àoating charges 130–1; orthodox approach 118–20; testamentary trusts 129–31; see also insolvency; segregated property subrogation 931; forms 1279–80; nature 1277–9; tracing and 1280–1 superinjunctions: and anonymised injunction, de¿nitions 1212; application to set aside 1223–4; basic issues 1211; communication between courts and Parliament 1227; core principle relating to award 1218–20; data collection 1227; legal context 1226; legal issues 1218; likelihood of success at trial 1222; ‘open justice’pinciple 1225–6; and phone hacking 1214–18; potential harmful effect on children 1222; problem of Parliamentary privilege and hyper-injunctions 1227–8; procedural issues 1226–7; public debate 1212–13; Report 1225–8; terms 1224; two-step process 1220–2; types of speech 1222–3 swollen assets theory 932–3 tangible money theory 1297–8 ‘tax havens’ 81; role in international crime 74, 82–3 taxation: avoidance 68–70, 81–4, 530–1; principles 69–70 teleological focus 27–8 tenants: in common/joint 223, 231–2, 827; life 163, 194, 248–9, 271, 357–8, 359, 361, 447–8 testamentary trusts 129–31 theft, pro¿ts 589–92 Thomas, GW 182, 188 title: absolute 52, 54–5, 72; retention see retention of title; transfer of 1062–3 tort: of deceit 321, 1176, 1231; misuse of private information see superinjunctions; negligence 876 tracing: basic principles 888–9; bona ¿de purchaser for value without notice 945–8; change of position see change of position; claims see tracing, claims; common law see common law tracing; consensual tranfer 948; defences 934–48; electronic bank accounts 919–20; estoppel by representation 944–5; issues 949–52; liability to account, comparison 893; loss of right 916–20; lowest intermediate balance 918–19; mistake 915–16; mixtures of property 892–3; nature of claim 889–95; original property 891; as process not remedy 894–5; Quistclose trust 1086–8; remedies see tracing, claims; restitution and 950–1; stolen property 951–2; subrogation and 1280–1; substitute property 891–2; see also equitable tracing tracing, claims 920–34; appropriate remedy 921–3, 933–4; basic principles 920; choice of remedies 934; constructive trust 923–8; constructive trust, institutional not remedial 927–8; equitable base 924–7; equitable charges 928–30; liens 930–1; subrogation 931; swollen assests theory 932–3 transactions: commercial see commercial transactions; money 1172–3; self-dealing 370–3 transfers of property: as gift 210–12; obligations 114–16; see also unincorporated associations trust laws, politics of 81–4 trust property: commercial uses 66–8; component legal aspects 1287–8; controlling interest 467–8; distribution duty 365–7; express trust problems 1289–90; family business and 66; investment duty 365; legal ownership 66–8; mortgage included 468; and property law 68; rights having value, not identity 1290–1; safeguard of 356–7; see also property trustee duties: on acceptance of of¿ce 343, 354–5; accounts see accounts; acting jointly 348; assets allocation 360–1; basic principles 340–1; breach of trust liability see under breach of trust; care see duty of care; care/ prudence 347–8; con¿dential information 375–6, 404–7, 1208; conÀict of interest 367–8; delegation see delegation; discretionary power 391; effect of breach 392; expenses 364–5; fair dealing principle 373–4; ¿duciary 55–7; general 353–4; good conscience requirement 347; gratuitous acts 376–7; impartiality between bene¿ciaries 357–61; information see information provision; of¿ce of trustee 343–4; removal 349–50; scope of 343; self-dealing transactions 370–3; to obey directions of trust 356; to safeguard trust property 356–7; trust property and 347; unauthorised pro¿ts 368–70; voluntary retirement 349 trustee duties, limitation: Armitage v Nurse decision 409, 412–14; basic issues 407; commercial trusts and 418–19; disclaimers 420; dishonesty 410; gross negligence 414–15; intentional breach of trust/wilful default 411–12; paradox 419; reform Index proposals 419; release 420; statutory restrictions on 418; trust instrument provision 408–9; trust instrument provision, interpretation 409–10; trustee’s obligations and 415–18 trustee duties, relevant/irrelevant considerations: court’s response 387–8; default 388–90; nature of 386–7; setting aside decisions 424; taking into account 377–91 trustee obligations: conÀicts of interest 367–8; on conscience 62–4; failure to act 391; meaning 55; professional advice 441–3; property rights and 64–5 trustee powers: advancement see advancement; delegation 353; devolution 484–5; discretionary 391; excessive exercise 497; fraud on a power 497; for infants see infant bene¿ciaries; land see under trusts of land; limits on 497; mistake in 391–2; nature of 473; setting aside 379; to compromise 473–4; to give receipts 473 trustees: appointment 344–7; appointment, judicial discretion 346; appointment, statutory powers of 346–7; bene¿t not permitted 34; breach see breach of trust; de son tort 642–3; exemption clause 883–4; express trusts 90–1; fully secret trusts 310–11; in personam, rights against 181–2; indemnity 350–3; investment duties see under investment; meaning 429; of¿ce of trustee 343–4; powers 55; refusal to act as 343–4; regulation 455–7; reimbursement 350–3; renumeration 350; unfettered discretion, to resolve uncertainty 169–70; wide powers, to resolve uncertainties 170–2 trusts: bene¿ts and uses 66–70; birth of 45–7; breach see breach of trust; charges, distinguished 109–10; charities as 1108–9; constructive see constructive trusts; core principles 61–2; de¿nition 47–9; fundamentals 61–6; intention to create 109–12; meaning vi–vii, 41; mechanisms 48; origins 45–7; powers distinct from 147–9; as sham device 110–12; types 48–51; variation see variation of trust; see also bare trusts; discretionary trusts; express trusts; ¿xed trusts; international trusts; people trusts; protective trusts; Quistclose trusts; resulting trusts trusts of homes: academic discussion 793–800; balance sheet approach 731–40; basic themes 702–4, 708–10; co-habitees/cohabitants 705–6, 843–4; common intention see common intention; common intention constructive trusts; Commonwealth jurisdictions 789–93; communal undertakings 743–4; deposit/sale proceeds from previous properties 737–9; 1349 equality is equity 741–3; equitable interest 731–3; express trusts 710–11; family assets approach 740–4; Jones v Kernott case 706–8, 739–40, 764–89; law’s treatment of family home 828; legal treatment of home 704; non-cash contributions 733–4; persistent problems 784–9; problems questions, approaches 799; proprietary estoppel 744–53; rights/deserts/needs 845–7; Scots law problem 767; social context 705–6; social issues 800; socio-economic phenomenon 793; Stack v Dowden case 706–8, 739–40, 764–89; time of interest creation 739; unconscionable approach see unconscionable actions; unpaid mortgage capital 735–7; value contribution 734–5 trusts of land: bankruptcy of bene¿ciary 814–16, 821–4; basic issues 802; bene¿ciaries 807–16; case law role 825–6; children’s rights 812–13, 820–1; concurrent ownership 827–8; consultation rights 808–9; de¿nition of bene¿ciary 807; delegation of powers 806–7; duty of care 805; exclusion from occupation 811; exclusion/restriction of powers 805–6; ¿nding the facts 824; functions of trustees 804–5; human rights 825; meaning 803–4; occupation rights 809–11; overreaching 826–7; people entitled to petition court 816–18; power of consent 807–8; powers of court 816–26; protection of purchaser 826–7; purchase contracted with delegate 826; secured creditor of bene¿ciaries 824–5; settlor’s intention 819; statute law 803; unity of possession 813–14 unauthorised pro¿ts: authorisation defence 607–8; company law remedy 622–4; conÀict of interest avoidance 601–3; constructive trust formation 598–605; corporate opportunity doctrine 612–17; directors’ duties 624–6; equitable accounting 627–8; equitable response 609–10; fair dealing principle 629; ¿duciary making 598–629; ¿duciary relationship 608–9; from ¿duciary of¿ce 606; misuse of trust property 603–5; remedy of account 610–12; restricted freedom of fudiciaries 617–20; self-dealing principle 628–9; strict approach 620–2; trustee duties 368–70 uncertainty: administrative unworkability 175–6; ascertainability 174–5; conceptual 172–3; evidential 173–4; forms of 172; powers to resolve 167–72; see also certainty unconscionable actions: approach 753–64; Australia 791–3; bargains see unconscionable bargains; consensual approach 755–8; 1350 Index constructive trust/common intention constructive trust model 762–3; Cox v James case 759–62; estoppel 649–50, 651, 656–7; excuses cases 763–4; fairness in all circumstances 759–62; granting rights in home 792–3; Jennings v Rice case 758–9; knowing receipt 1009–12; Oxley v Hiscock approach 755–8; property 558–69; proprietary estoppel 656–7, 758–9; rights not based on common intention 763–4; speci¿c performance 1176–7; test 791–2; Voldemort concept 783–4 unconscionable bargains: rescission 1232–3; speci¿c performance 1176–7 unconscionable receipt 644–5, 1009–12, 1022–3 undue inÀuence: actual 1246–7; basic principles 1242–3; categories/classes 1245, 1246–51; constructive fraud 597; as constructive fraud 1245–6; mortgages 1254–5, 1264–5; presumed 1247–50; rescission 1232–3; source of division 1250; speci¿c performance 1176–7; wills and 1250–1 unincorporated associations: abstract purposes 229–30; as agent of members 228–9; automatic resulting trusts 514–16; basic issues 220; charitable purposes 230–1; distributions 234–6; endowment capital 225–6; gift/ assignment to 223–5; juridicial nature 220–1; meaning 220–1; moribund associations 234; nature of property 231–2; non-charitable purposes 229–30; resulting trusts 238–9; rules of association and 226–8; transfers of property 222; transfers to, constructions 222–34; trust for present members 225; winding up 234–9 unit trusts, participants’ rights 190–2 unity of possession 813–14 unjust enrichment: Canada 790–1; distinction from equity 8, 41; knowing receipt and 1020–1; mistake 1178; restitution and equity, distinguished 1300–1; tracing and 950–1; see also restitution valuation of loss: exemplary damages 879; methodology 877–8; set-off 878–9 variation of trusts: applicant’s own bene¿t 489; automatic transfer 294–5; basic provisions 485; bene¿cial 491–3; Chapman v Chapman exceptions 486–7; court’s jurisdiction 486, 488–9; deviation principle 486; disagreement between bene¿ciaries 494–5; divorce proceedings 493–4; identi¿cation 489–91; issues 486; persons covered by statute 487–8; statutes 487–9, 495–7 Vice-Chancellors 17, 21 voluntary gifts 524–6 voluntary settlements 1239–40 volunteers: gift recipient 72–3; imperfect gifts and 256–7; innocent 901–2, 907–15; not assisted rule 32 ‘vulture funds’ 83–4 Walker, Lord 41–2 Walpole, Sir Robert 17 ‘waqf’ 46 Weil, Simone 76 wills: bene¿ciary attesting to 313–14; bequests see charitable purpose; interpretation of 107–9; mutual 638–42; secret trusts 323; undue inÀuence and 1250–1 windfall payments 939–40 winding up, unincorporated associations 234–9 Wolsey, Cardinal 18 women: changing perception of rights 79–80, 794–5; common intention constructive trusts 794–5; denial of rights and protection of 78–9; judicial attitudes to 77–8, 80–1; limited rights to property and other things 75–7; rights in the home 80, 794–5, 800; and trusts law 74–81 writing requirements 280–4, 289–91, 1175–6 wrongs remedied 29 .. .Equity and Trusts Eighth Edition Alastair Hudson’s Equity and Trusts is an ideal textbook for undergraduate courses on the law of trusts and equitable remedies It provides a clear, current and. .. and the Perpetuities and Accumulations Act 2009 Equity and Trusts provides the most comprehensive and up-to-date coverage of the law of Equity and Trusts, as well as a lively and thoughtful account... of equity and trusts Introduction – the nature of equity 1.1 1.2 1.3 1.4 1.5 The foundations of equity The birth of equity 16 Understanding equity 22 The core equitable principles 28 Placing equity