34. Specific performance

This chapter concerns the remedy of specific performance. The remedy of specific performance is a remedy which applies only where someone has already engaged to do something, but has then failed to do so. An equitable remedy of specific performance is a personal remedy against the defendant, as equity acts in personam, and disobedience is classified as a contempt of court which can lead to imprisonment or other action. The remedy provides an alternative to an award of damages, and it may sometimes be awarded alongside damages. The remedy of specific performance evolved to allow the courts to compel a defendant to perform a contractual obligation. At common law, if a contracting party failed to do what was promised, the injured party had a remedy only in damages.

31. Remedies against strangers to the trust

This chapter considers remedies involving a breach of trust which involves a third party who was not a trustee either as a participant in the breach or as the recipient of trust property transferred to them in breach of trust. In the event of such a breach, the beneficiaries of the trust may be entitled to pursue remedies against the stranger. The third party is termed a ‘stranger to the trust’ because he or she was not a trustee and, therefore, was not subject to any obligations prior to his or her involvement in the breach. Remedies against third parties may prove more attractive to the beneficiaries than their remedies against the trustee in breach. The availability of remedies against a stranger to the trust will be especially important if the trustee is insolvent, thus rendering direct remedies against the trustee ineffective.

28. Control and accountability

This chapter studies mechanisms for controlling trustees or the donees of powers and holding them accountable for their actions. It shows that the prime responsibility for supervising the activities of the trustees falls to the beneficiaries, who are able to complain to the court if they believe the trustees have committed, or are about to commit, a breach of trust. If the beneficiaries are able to apply to the court before the alleged breach has taken place, they may obtain an injunction against the trustees to restrain them from committing the contemplated breach. Trustees are also subject to a number of duties which enable the beneficiaries to keep a better check on their activities by entitling them to obtain information which will inform them of the trustees’ actions and may enable the beneficiaries to detect breaches of trust. This chapter considers those duties.

24. Variation of beneficial interests

This chapter considers the variation of beneficial interests. One route is for a trust to include provisions which allow the terms of the trust to be varied by the settlor, or by the trustees, or by a protector, in each case, with or without a requirement of consent by someone else. Variation by the beneficiaries is also explored, as is the surrender of a beneficial interest, the release of a power, the statutory powers of variation, and inherent court powers. The chapter next turns to consensual variation and variation under the inherent jurisdiction of the court. Miscellaneous statutory powers are also discussed. Finally, the chapter gives an overview of the Variation of Trusts Act 1958.

20. Fixed trusts

This chapter looks in detail at the fixed trust. In a fixed trust, the interests of the beneficiaries have already been defined by the settlor. The trustee must carry out those terms and distribute the fund as has been specified. There are six uses of fixed trusts: bare trusts, nominee trusts, custodian trusts, non-trustee custodians, concurrent interests, and consecutive interests. The chapter also discusses the beneficial entitlement to defined interests, as well as the certainty of objects. It then shows how a fixed trust will continue for so long as the trustees hold the trust assets for the beneficiaries. Furthermore, it is possible for the principal or beneficiary under a bare or fixed trust to deal with his equitable interest without terminating the trust.

11. The evolution of rights in the family home

This chapter shows how the laws governing the interests in the family home have developed. It first discusses the deserted wife’s equity, which was one of the first attempts to provide an answer to a dispute about the family home. Next, the chapter considers cases regarding proprietary interests in the home, some of which later built up to the present law. It also returns to the topic of resulting trusts, showing how limitations in resulting trust analysis led to the use of common intention constructive trust principles when dealing with ownership of the family home. This form of constructive trust has the advantage of greater flexibility than resulting trusts with the ability to resolve issues about ownership both at the time of acquisition of the family home and later.

9. Constructive trusts

This chapter turns to constructive trusts, the second main category in informal trusts. At its simplest, the term ‘constructive trust’ describes the circumstances in which property is subjected to a trust by operation of law. Unlike an expressly declared trust, a constructive trust does not come into being solely in consequence of the express intention of a settlor. Unlike automatic resulting trusts, it does not fill gaps in beneficial ownership. Like presumed resulting trusts, intention can form an important element in its genesis. As such, a constructive trust is a trust which the law imposes on the trustee by reason of their unconscionable conduct.

8. Resulting trusts

This chapter examines resulting trusts, which are one of the two main categories of informal trusts in English law. In general, resulting trusts arise to fill gaps in beneficial ownership or to give effect to the implied intention of the owner of property that someone else should not enjoy the benefit of it. Under existing law, a resulting trust arises in two sets of circumstances. One is where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, with a presumption that A did not intend to make a gift to B. The other is where A transfers property to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest.

1. What is equity?

This chapter defines equity. Equity is both a different system of law which recognizes rights and obligations that the common law does not, and a system which seeks to address the inherent gaps which can exist in following any set of rules. Equity plays a large, but largely hidden, role in all our lives. For instance, buying houses with a partner, borrowing money, investing in private or company pensions, making complex arrangements in a will, or preventing human rights abuse all use some form of mechanism developed in equity, such as trust. Thus, equity, even if we do not always appreciate it, intrudes into many parts of our lives.

25. Management and delegation

This chapter explores trustees’ management powers. The management powers of trustees are concerned with looking after property or funds. They do not allow the trustees to choose who benefits. In addition, the powers of management conferred upon a trustee are not the same in every case. Quite obviously, the powers of express trustees are likely to differ significantly from those of constructive trustees upon whom a trust has been imposed because of their improper conduct. In the latter case, the question of the trustees’ powers rarely arises. They are wrongdoers, who are, by definition, acting in breach of duty. How far they are authorized to act is, therefore, unlikely to be an issue.