The Law of Trusts and Equitable Obligations

Transcription

1 The Law of Trusts and Equitable Obligations Robert A Pearce, BCL, MA Professor of the Law of Property and Equity, University of Buckingham John Stevens, BCL, MA Lecturer in Law, University of Buckingham Butterworths London, Dublin, Edinburgh 1995

2 Contents Preface v Table of statutes xiii Table of cases xix PART I INTRODUCTORY 1 Chapter 1 Historical introduction 3 1 What is equity? 3 2 The historical development of equity 4 3 The Judicature Acts 1873 and The fusion of law and equity 10 5 The maxims of equity 15 6 The creativity of equity 20 Chapter 2 Equitable remedies in modern English law 25 1 Introduction to equitable remedies 25 2 Specific performance 25 3 Injunctions 35 4 'Mareva' injunctions 48 5 Anton Piller orders 53 6 Recission 56 7 Rectification 62 8 Account 63 Chapter 3 Equity and the law of property 70 1 Introduction 70 2 What is property? 70 3 Proprietary rights 71 4 Equitable proprietary rights 75 5 Priority of property rights 81 6 Trusts of land and the equitable doctrine of conversion 90 Chapter 4 Equity and the management of property 92 1 Introduction 92 2 Dealing with property 95 3 Hiding the real owner 96 4 Transferring property 96 5 Facilitating collective investment Property holding of clubs and societies 105 vii

3 viii Contents 7 Trusts arising informally Remedial trusts Trusts and tax avoidance 108 Chapter 5 Fundamental concepts Introduction Distinctions-other mechanisms separating the management and ownership of property Key concepts of equitable mechanisms for the separation of management and ownership Classification of equitable obligations 123 PART II ASSET MANAGEMENT 135 Chapter 6 Holding trusts and nominee holdings The nature of nominee holdings Rights and obligations of nominees Execution and performance Dealing with the equitable interest 141 Chapter 7 Management powers Trusts with no management powers The need for management The extent of the powers 146 Chapter 8 Investment and reinvestment Introduction The purpose of investment Powers of disposal Authorised investments Widening of powers of investment Duties of trustees in relation to investment 169 Chapter 9 Collective assets and investments Introduction Incorporation of a company Investment trusts Friendly societies Building societies Members' arrangements with companies and friendly societies Endowment policies Unit trusts Investment club Pension funds and provision for retirement Clubs and societies 193 Chapter 10 Delegation by trustees Introduction Delegation prior to the Trustee Act

4 3 Delegation after the Trustee Act Proposed reform 211 Chapter 11 Appointment, removal and retirement of trustees The appointment of the original trustees of a trust fund The appointment of replacement or additional trustees Appointment under the Trustee Act 1925, s Appointment under the Trustee Act 1925, s Appointment of special trustees The court's inherent jurisdiction to remove trustees Summary 229 Chapter 12 Accountability of trustees Introduction The duty of trustees to act unanimously The trustees'exercise of their discretion Trustees duty to keep accounts and records Beneficiaries entitlement to inspect trust documents 240 Contents ix PART III ALLOCATION OF FUNDS 243 Chapter 13 Introduction to allocation General Certainty of objects Beneficial entitlement and ownership Purpose trusts Charitable and benevolent giving The duty to act evenhandedly between beneficiaries 258 Chapter 14 Defined interests Introduction Defined interests under trusts Beneficial entitlement to defined interests Certainty of objects Policy limits 271 Chapter 15 Powers of appointment and redistribution Nature of powers of appointment Essential validity of powers of appointment Exercise of powers of appointment Duties of the donee of a bare power of appointment Failure to exercise the power Fiduciary powers Release of powers 299 Chapter 16 Powers of advancement and maintenance Introduction The trustee's power of maintenance The trustee's power of advancement 310

5 x Contents Chapter 17 Discretionary trusts Introduction Essential validity of discretionary trusts Rights of the beneficiaries of discretionary trusts The duties of trustees of discretionary trusts 328 Chapter 18 Variation of beneficial interests Introduction Variation under the inherent jurisdiction of the court Statutory powers of variation other than the Variation of Trusts Act The Variation of Trusts Act Chapter 19 Charities Introduction Privileges enjoyed by charitable trusts Defining charitable trusts Charitable purposes Public benefit Interpreting charitable gifts 383 Chapter 20 Winding up of funds Introduction Surplus funds on the failure of trusts Surplus funds on the dissolution of unincorporated associations Surplus funds on the failure of a charity 400 PART IV CHECKS AND CONTROLS 411 Chapter 21 Control of trusts and trustees The need for control The means of control Controlling and supervising charitable trusts 420 Chapter 22 Remedies against the trustee for breach of trust Meaning of breach of trust The remedy for breach of trust Defences to liability for breach of trust Contribution and indemnity where the trustee is liable 455 Chapter 23 Fiduciary position of trustees Fiduciary relationships Unauthorised remuneration Purchase of trust property Incidental profits Remedies against the fiduciary Restitution and remedies for breach of fiduciary duty 491

6 Chapter 24 Remedies against strangers to the trust Introduction Strangers who take it upon themselves to act as a trustee Strangers who receive trust property in breach of trust Strangers who assist in a dishonest and fraudulent design 510 Chapter 25 Tracing What is tracing? Identifying specific property-the rules of tracing The requirements for equitable tracing Tracing and restitution 539 Contents xi PARTV CREATING THE RELATIONSHIP 545 Chapter 26 Substantive and formal requirements for the creation of express trusts Introduction Creating a valid trust The requirement of certainty Constitution of trusts Formal requirements for the creation of trusts 576 Chapter 27 Secret trusts Distributing property on death Introduction to secret trusts Requirements for the creation of secret trusts Failure of secret trusts Death or disclaimer by the secret trustee The legal rationale for the enforcement of secret trusts 600 Chapter 28 Resulting trusts Introduction to resulting trusts Presumed resulting trusts The presumption of advancement Reform in the context of matrimonial property 624 Chapter 29 Constructive trusts Introduction to constructive trusts The constructive trust as a remedy available against fiduciaries Constuctive trusts as a remedy available against strangers to a trust Constructive trusts imposed to prevent a criminal benefiting from his crime Constructive trusts where a vendor enters a specifically enforceable contract to sell property Constructive trusts where testators have made mutual wills Constructive trusts where a purchaser of land has expressly agreed to take subject to the interests of a third party Constructive trusts and the co-ownership of land The 'remedial constructive trust' 654

7 xii Contents Chapter 30 Proprietary estoppel Introduction to proprietary estoppel Establishing the equity Satisfying the equity 673 Chapter 31 Mutual wills The nature of mutual wills Requirements of mutual wills Operation of mutual wills 687 Index 693