Equity and Trust

In a rule-based legal system how can equity be justified?

 

This is a summary note for the final exam, so the footnote reference was not included. Please look for correct references in your own time.


What is Justice?

After researching as to the term " Justice" I  have found that defining the exact concept of Justice has been a controversial topic as it is very difficult to define it. Roman law defines the principle of justice for settling disputes in civil law, yet it does not cover the justice of criminal law or claims made in the name of justice outside the sphere of law.  Some scholars define “justice” in terms of equality; everyone should be given or have the same amount, regardless of how hard they work. Other scholars define "justice" in terms of equity; people should get benefits proportionally, according to what they contributed to generate those benefits. Viz, the harder and better people work, the more people should get as a reward for that work. Many scholars and experts believe in equity with a bottom "safety guard" which protects people suffering from disability  so that they are unable to work.

 

 

What is equity?

I have concluded and agreed that equity means “fairness in the resolution of disputes through the application of good conscience”. Historically, common law did not recognise equitable rights or interests so the defendant in common law proceedings could not plead equitable defences and matter could not be transferred between jurisdictions if other issues arose. This made difficulties in determining the appropriate court in which to commence proceedings. This issue led to enact  the Judicature Act 1873 that brought the major reform by fusing the administration of common law and equity.

Since then, a new High Court has been established, conferring on all jurisdictions previously exercised by the separate courts. That means the new High Court could administer both bodies of law. From the traditional view, fusion only extended to the administration and procedure. It did not fuse the bodies of law so that causes of action and remedies could be mixed. Spigelman CJ in Harris v Digital Pulse Pty Ltd stated that:

"The heart of the fusion fallacy  is proposition that the joint administration of two distinct bodies of law means that the doctrine of one are applicable to the other. It is only to say that they remain conceptually distinct."

 

Seager v Copydex Ltd is a sample case of the fusion fallacy. The English Court of Appeal awarded what appeared to be common law damages for equitable breach of confidence. Jussel MR in Redgrave v Hurd states that as a result of the passing of the Judicature Act, damages may be awarded for the equitable cause of action of innocent misrepresentation. The Attorney-General, Sir Francis Bacon, determined that when there are conflicts between the rules of common law and equity, the rules of equity should prevail.

 

A set of equitable maxims were developed they are general guidelines, which have been followed by courts of equity in applying equitable principles and devising equitable doctrine. Even though they are not specific rules or principles of law, they give a good indication of the nature of equity.

 

Equity recognise the certain relationship, which is called as 'fiduciary duty' between the parties, the breach of fiduciary duty is not available at common law.  Equity proves a breach of fiduciary duty which has traditionally been seen as a door to a remedy not available at common law, such as a contractive trust.

 

The principle remedy at common law is the award of damages, common law remedies, have not traditionally been available to enforce purely equitable right whereas equity supplements the remedies available at common law via an array of remedies that may be  awarded to enforce both legal rights and equitable right. There are wide range of remedies in equity such as, injunction, Mareva orders, Anton Pillar orders, specific performance, equitable compensation, equitable damages, constructive trusts, rescission, declaration, rectification and tracing.

 

Equity is not just about focusing on the penalty; rather, it gives the solution to the parties. One of the ongoing debates is over remedial fusion. The matter of remedial fusion is best illustrated by the issue of whether a common law remedy ought to be available for a breach of purely equitable right or conversely, whether equitable remedies should be available generally for common law wrongs.

 

From my perspective, equality has better remedy system than common law system and in particular, equity is well fit in to the family law. When women get divorced, they can claim the their property right based on the equity. I believe that without the equity law, women are difficult to get their legal right and their property after divorce or broken relationship.

 

 

How can equity be justified?

In my opinion, equality and justice are different terms. Equality is when every one of us is equally treated, in spite of the different environments and variables, whereas justice is when there is a hint of sympathy in someone and they make a particular situation fair. Namely, justice depends on the circumstances of the situation and the people involved, taking specific variations into account and allowing for more forgiveness in the right circumstances, whereas equality is impersonal and efficient, treating everyone exactly the same. Therefore, equity cannot be equally justified.


Trust

 

 

Subject: Debt

Q) $5000 owed to me by Deliah to my trustees to provide sporting opportunities to my family and their friends

 

Purpose trust: Tombs and (upkeep) Animal

 

Express trust

Express trust is where the settlor has expressed an intention to create a trust, subject to the required certainties and formalities, an "express trust" arise. Here, there is intention arise, this is an express trust. (See Above)

 

Parties

Trust is where propriety right are held by one person on behalf of another. The creator of the trust is a settlor, here Shane. The person holding the right is the trustee, here Clara. The person for whom the right are held is the beneficiary. (See Above)

 

 

Satisfy 3 certainties

Intention

  • "to provide" creates intention: Dean v Cole
  • Satisfied

 

Subject

  • Debt
  • Satisfied

 

Object

  • Purpose trust: beneficiary principle requires a person or charitable purpose
  • Not certain: Re Denley's Turst Deed
  • (점수 받을려면 언급) Apply chartable purpose test: Pemsel. If not in the Pemsel then apply Preamble.

 

Certainties is not satisfied and so invalid bequest.

 


 

Five block of Land and Hard Working Law Student

 

Express Trust

As to five blocks of land in my new development at Robina for a hard working QUT law student selected by my trustee;

 


Express trust

Express trust is where the settlor has expressed an intention to create a trust, subject to the required certainties and formalities, an "express trust" arise. Here, there is intention arise, this is an express trust. (See Above)

Parties

Trust is where propriety right are held by one person on behalf of another. The creator of the trust is a settlor, here Shane. The person holding the right is the trustee, here Clara. The person for whom the right are held is the beneficiary. (See Above)

 

Satisfy 3 certainties

Intention

  • Simon created the will and appointing Debbie as a trustee.
  • Dean v Cole
  • Satisfied

 

Subject

  • Five blocks of land in my new development at Robina clearly stated
  • Property need to be identifiable both nature and quantum
  • Re Golay: which five or the 10 block
  • Hunter v Moss: if the block are relatively homogenous
  • Not satisfied

 

Object

  • Hard working QUT law student
  • Uncertainty of "Hard working QUT law student"
  • McPhail v Doulton: trust is valid if it can be said with certainty
  • Not satisfied
  • Discretionary trust: Trustees have a discretion to decide who among a class of beneficiaries will receive a benefit and may also be able to decide the amount of the benefit to be paid. Trustee need only be able to determined with certainty whether any claimant is within the class (in / out test)

Conclusion: Not satisfy certainties and so not valid bequest.

 


 

Animal and Tombs       

Express Trust

as to the sum of $20,000 to look after my horse, Black Beauty

 

Express trust

Express trust is where the settlor has expressed an intention to create a trust, subjct to the required certainties and formalities, an "express trust" arise. Here, there is intention arise, this is an express trust. (See Above)

 

Parties

Trust is where propriety right are held by one person on behalf of another. The creator of the trust is a settlor, here Shane. The person holding the right is the trustee, here Clara. The person for whom the right are held is the beneficiary. (See Above)

 

 

Satisfy 3 certainties

Intention

  • On the understanding
  • Uncertainty of meaning of understanding
  • Hayes v Nat'l Heart Foundation
  • Satisfied

 

Subject

  • Sum of $20,000 clearly stated as money
  • Satisfied

 

Object

  • Uncertainty of object
  • Beneficiary principle require person or chartable purpose
  • Trust for non-charitable purpose fail because there is no beneficiary except trust: upkeep of tombs and animals; directly or indirectly for benefit of ascertainable beneficiaries: Pettingal v Pettingal
  • Pettingal case has not found particular favour in Australia
  • Satisfied
  • Fixed trust: Trust where the rights of all beneficiaries are fixed by the trust deed. List of possible objects has to be compiled or capable of compilation (list certainty)

 

Conclusion: Satisfy certainties and so valid bequest.

 


 

Company Shares %

 

Express Trust

As to 50,000 XYZ Ltd shares for my niece Susie

 

 

Express trust

Express trust is where the settlor has expressed an intention to create a trust, subject to the required certainties and formalities, an "express trust" arise. Here, there is intention arise, this is an express trust. (See Above)

 

Parties

Trust is where propriety right are held by one person on behalf of another. The creator of the trust is a settlor, here Shane. The person holding the right is the trustee, here Clara. The person for whom the right are held is the beneficiary. (See Above)

 

 

Satisfy 3 certainties

Intention

  • Bahr v Nicolay: option to renew
  • Satisfied

 

Subject

  • 50,000 XYZ Ltd Shares
  • Any property including intangible property may be subject matter of a trust
  • Hunter v Moss: 50 shares are certain
  • Property need to be identifiable both nature and quantum
  • Satisfied

Object

  • my niece Susie clearly stated
  • Satisfied
  • Fixed trust: Trust where the rights of all beneficiaries are fixed by the trust deed. List of possible objects has to be compiled or capable of compilation (list certainty)

 

Conclusion: Satisfy certainties and so valid bequest.

 


 

* Certainty 끝내고 제일 마지막에 하나 Formalities 적기*

 

서류에 사인이 되어있는지 지문에서 확인하기. 만약 Settlor가 사인을 안 했다거나, 서류가 준비가 안되어 있으면 invalid.

 

 



 

Formalities*

 

There are formalities for will requiring proper singing, and the like and "everything necessary" has been done, these will need to be satisfied: Milrory v Lord.

 

*Inter Vivo (Settlor 살아있는 상태)

땅이 나오면 아래 2 중에 하나 택해서 쓰기

  • S 11 (1)(a) Property Law Act 1974 (Qld): Interest in land requires signed writing.
  • S 11 (1)(b) Property Law Act 1974 (Qld): A declaration of trust respecting any land - Need evidence of writing.

In this case, apply s 11 (1)(a)./ In this case, apply s 11 (1)(b).

 

* Testamentary (Settlor 죽은 )

Will must be executed (실행되다):

  • S 10 Succession Act 1981 (Qld)
  • Writing
  • Signed by testator
  • 2 or more witness

 

In this case all the elements are met. / In this case, all the elements are not met.

결론: 아래 2 중에 하나 적기

1) Question 1,2,3 Certainties satisfied and the formalities satisfied so have valid trust.

2) Question 4, Certainties satisfied and the formalities  not satisfied so have not valid trust.

 


만약에 Settlor has Not done everything:

If the 3 certainties are present but the settlor has not completed the formalities required of her, and none of the exceptions apply.

 

  • An enforceable promise
  • A promise to someone who was not a volunteer
  • The prospect of a fraud if the trust is not upheld
  • Secret or half secret trust

 


 

Remainder (Reasonable) & My Children

 

Express trust

the remainder in equal shares for my children when the youngest turns 21 years of age

 

 

Express trust: See above

Parties: See above

 

 

Satisfy 3 certainties

 

Intention

  • Shane withdraw the previous will and appointing Clara as new trustee
  • Dean v Cole
  • Satisfied

 

Subject

  • Remainder
  • Re Golay - ('Reasonable income') need an effective determinant
  • Presumably this is all estate left over making other bequests and paying all expenses and liabilities and that this can be identified
  • Presumably can identify beneficiaries and then divide " remainder" into equal shares
  • White v Shortall - need to be able to identify shares of various forms of property with sufficient certainty even if cannot identify specific property (such as shares among a grouping of shares)
  • Satisfied
  • Fixed trust: Trust where the rights of all beneficiaries are fixed by the trust deed. List of possible objects has to be compiled or capable of compilation (list certainty)

 

Object

  • Uncertainty of "my children"
  • Presumably they can be identified
  • West v Weston: Finding and identifying children are any problems.
  • Satisfied
  • Fixed trust: Trust where the rights of all beneficiaries are fixed by the trust deed. List of possible objects has to be compiled or capable of compilation (list certainty)

 

Conclusion: Satisfy certainties and so valid bequest.

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