Principles of Equity and Trusts Alastair Hudson, LLB, LLM, PhD Barrister and Senior Lecturer in Law Queen Mary and Westfield College, University of London Cavendish Publishing Limited London • Sydney
Principles ofEquity
andTrusts
Alastair Hudson, LLB, LLM, PhDBarrister and Senior Lecturer in Law
Queen Mary and Westfield College, University of London
CavendishPublishing
Limited
London • Sydney
CONTENTS
Preface vii
Glossary ix
TableofCases xxxiii
Table of Statutes xlix
PART IINTRODUCTORY
1 INTRODUCTION - THE NATURE OF EQUITY 3
1.1 THE BIRTH OF EQUTTY 4
1.1.1 The development of two Systems: common law and equity 41.1.2 The continning distinction between equity and common law 51.1.3 The impact of the distinction between common law
and equity 6
1.2 UNDERSTANDING EQUITY 8
1.2.1 Equity: an ethical construct 81.2.2 Equity acts in personam 91.2.3 Roots in trade and in the family 10
1.3 THE CORE EQUTTABLE PRINCIPLES 12
1.3.1 Equity will not suffer a wrong to be without a remedy 131.3.2 Equity follows the law 131.3.3 Where there is equal equity, the law shall prevail 131.3.4 Where the equities are equal, the first in time shall prevail 141.3.5 Delay defeats equities 141.3.6 He who seeks equity must do equity 141.3.7 He who comes to equity must come with clean hands 141.3.8 Equality is equity 141.3.9 Equity looks to the intent rather than to the form 151.3.10 Equity looks on that as done that which ought
to have been done 151.3.11 Equity imputes an intention to fulfil an Obligation 151.3.12 Equity acts in personam 161.3.13 Equity will not permit Statute or common law to be used
as an engine of fraud 16
Principles of Equity and Trusts
1.3.14 Equity will not permit a person who is trustee of propertyto take benefit from that property qua trustee 16
1.3.15 Equity abhors a vacuum 171.3.16 The trust 17
SUMMARY OF CHAFTER 1 19
2 UNDERSTANDING THE TRUST 21
2.1 THE BIRTH OF THE TRUST 21
2.2 EXPRESS TRUSTS-THE MAGIC TRIANGLE 22
2.2.1 What is a trust? 222.2.2 The settlor 222.2.3 The trustee 232.2.4 The beneficiary 252.2.5 Distinguishing between 'people' and 'legal capacities' 26
2.3 THE CLASSIFICATION OF TRUSTS 27
2.3.1 Express trusts 272.3.2 Resulting trusts 272.3.3 Constructive trusts 28
2.4 TRUSTS AND OTHER LEGAL CONSTRUCTS 29
2.4.1 Contract 292.4.2 Bailment 292.4.3 Agency 302.4.4 Gift 31
2.5 THE BENEFTTS OF TRUSTS 31
2.5.1 Owning property, but not owning property 312.5.2 Taxation 34
2.6 FUNDAMENTAL PRINCIPLES OF TRUSTS LAW 36
2.6.1 Understanding the core principles of the trust 362.6.2 The conscience of the trustee 372.6.3 Understanding the nature of property rights 37
XIV
Contents
2.6.4 The contractual nature of the trust 42
2.6.5 The broader nature of trust 44
SUMMARY OF CHAFTER 2 47
PART II EXPRESS TRUSTS
3 THE CREATION OF EXPRESS TRUSTS 51
3.1 INTRODUCTORY 52
3.2 THE THREE CERTAINTIES 53
3.3
3.4
3.5
CERTAINTY OF INTENTION
3.3.1
3.3.2
3.3.3
3.3.4
What form of intention?
Moral obligations or trusts?
Intention to create a trust, not something eise
Analysing the possibilities
CERTAINTY OF SUBJECT MATTER
3.4.1
3.4.2
3.4.3
The application of the orthodox view
An exception for fungible or intangible property?
Floating charges
CERTAINTY OF OBJECTS
3.5.1
3.5.2
3.5.3
3.5.4
3.5.5
3.5.6
3.5.7
3.5.8
3.5.9
3.5.10
Introductory
Personal power
Mere power - fiduciary power
Discretionary trust power
Fixed trust power
Bare trust power
Resolving the uncertainty
The various forms of uncertainty
Ascertaining the beneficiaries' rights
Conclusion
53
53
55
56
57
57
58
60
62
62
62
63
64
66
68
69
69
70
73
74
SUMMARY OF CHAFTER 3 75
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4 TRUSTS FOR PEOPLE, PURPOSES ANDPERPETUITIES 11
4.1 THE BENEFICIARY PRINCIPLE 77
4.1.1 Introductory 78
4.1.2 Defining a 'people trust' 78
4.1.3 Mapping the distinction between 'people' and
'purpose' trusts 79
4.1.4 Perpetuities and accumulations 82
4.1.5 Purpose trust or mere motive? 84
4.1.6 Anomalous purpose trusts 85
4.2 UNINCORPORATEDASSOCIATIONS 86
4.2.1 Introductory 86
4.2.2 What is an 'unincorporated association'? 86
4.2.3 Possible constructions of transfers to unincorporatedassociations 87
SUMMARY OFCHAPTER 4 95
5 FORMALITIES IN THE CREATION OFEXPRESS TRUSTS 97
5.1 SPECIFIC FORMALITIES IN THE CREATION OF A TRUST 98
5.1.1 Declaration of trust 98
5.2 EXCEPTIONS TO THE RULES OF FORMALITY 101
5.2.1 The Operation of implied, resulting and constructive trusts 101
5.2.2 Fraud and unconscionability 102
5.3 CONSTTTUTION OF THE TRUST FUND 104
5.3.1 Personalty 105
5.3.2 Land 105
5.4 IMPROPERLY CONSTTTUTED TRUSTS 105
5.4.1 Introductory 106
5.4.2 Trusts and imperfect gifts 107
5.4.3 'Doing everything necessary', not an incompletelyconstituted trust 109
Contents
5.5 PERFEC1TNGIMPERFECT GIFTS 112
5.5.1 Donatio mortis causa 112
5.5.2 The rule in Strong v Bird 113
5.5.3 Proprietary estoppel and the enforcement of promises . 114
5.6 COVENANTS AND PROMISES TO CREATE A SETTLEMENT 115
5.6.1 Enforceability of promise 116
5.6.2 Trustees enforcing promise 117
5.7 DISPOSITION OF EQUITABLEINTERESTS 119
5.7.1 The rule in s53(l)(c)of the LPA1925 119
5.7.2 Whether or not a transaction will fall within s 53(l)(c) 120
5.7.3 Transactions not within s 53(l)(c) 121
5.7.4 Declaration of a new trust by trustees or third party with
dispositive powers 124
5.7.5 Are Grey and Vandervell the right way round? 127
5.7.6 Subtrusts 129
5.7.7 Declaration of new trust 129
5.7.8 Contractual transfer of equitable interest 130
5.7.9 Dispositions effected by implied trusts 131
5.7.10 Summary: analysing dispositions of equitable interests 132
SUMMARY OF CHAFTER 5 135
6 SECRET TRUSTS 137
6.1 INTRODUCTORY 137
6.1.1 An example of a secret trust 137
6.1.2 Explaining the role of the secret trust 138
6.1.3 Mapping the discussion to follow 139
6.2 FULLY SECRET TRUSTS 139
6.2.1 Creating a valid, fully secret trust 139
6.2.2 Intention to benefit 140
6.2.3 Communication of the secret trust 140
6.3 GENERAL PRINCIPLES 141
6.3.1 The problem with secret trusts 141
Principles of Equity and Trusts
6.3.2 Trustee dies before the settlor 1426.3.3 Disclaimer of the trust 1426.3.4 Where further property is added to a secret trust 1436.3.5 Secret trusts arising on intestacy 1436.3.6 Specific problems of evidence 143
6.4 PARTICULARISSUES WITH FULLY SECRET TRUSTS 145
6.4.1 Secret trustees with different knowledge 1456.4.2 Time of the creation of the trust 146
6.5 HALF SECRET TRUSTS 147
6.5.1 Creating a valid half secret trust 1476.5.2 Communication 1476.5.3 Acceptance 1486.5.4 Clash of doctrines - beneficiary attesting to the will 148
6.6 THE DOCTRINE OF INCORPORATION BY REFERENCE 148
6.7 CATEGORISING THE SECRET TRUST-EXPRESS ORCONSTRUCTTVE TRUST? 149
6.7.1 The traditional view 1496.7.2 The modern view 1496.7.3 The split view 1506.7.4 An alternative view 150
SUMMARY OF CHAPTER 6 153
PART III CHARITIES
7 THE LAW OF CHARITIES 157
7.1 INTRODUCTION 158
7.1.1 Context 1587.1.2 Categories of charitable trust 1587.1.3 Simplifying the approaches of the cases 1607.1.4 The trusts law advantages of charitable Status 1617.1.5 The tax advantages of charitable Status 163
Contents
7.2
7.3
7.4
7.5
7.6
7.7
7.1.5
7.1.6
Sufficient intention to create a charitable trust
A note before we proceed
RELIEF OF POVERTY
7.2.1
7.2.2
7.2.3
7.2.4
Introductory
What is 'poverty'?
What is 'relief'?
Limits on the class of beneficiary
EDUCATION
7.3.1
7.3.2
7.3.3
Introductory
What is 'education'
Public benefit requirement
TRUSTS FOR RELIGIOUS PURPOSES
7.4.1
7.4.2
7.4.3
Introductory
What is 'religion'?
The requirement of public benefit
OTHER PURPOSES BENEFICIAL TO THE COMMUNITY
7.5.1
7.5.2
7.5.3
7.5.4
7.5.5
Introductory
The nature of the fourth head
Requirement of public benefit
Political purposes
Recreational charities
CY-PRES DOCTRINE
7.6.1
7.6.2
Exclusivity of purpose
The mechanics of the cy-pres doctrine
SUMMARY OF CHAPTER 7
164
164
165
165
167
168
169
170
170
170
173
175
176
176
176
179
179
179
179
183
184
185
185
186
187
PART IV ADMINISTRATION OF TRUSTS
8 THE OFFICE OF TRUSTEE AND THECONDUCT OF TRUSTS 191
8.1 INTRODUCTORY 191
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8.2 THE OFFICE OF TRUSTEE 192
8.2.1 Nature of the office of trustee 1928.2.2 Appointment of trustees 1938.2.3 Removal of trustee 196
8.3 POWERS OF MAINTENANCE AND ADVANCEMENT 197
8.3.1 Powers of maintenance 1978.3.2 Powers of advancement 200
8.4 THE CONDUCT OF TRUSTS 201
8.5 FIDUCIARY RESPONSIBILriTES OF TRUSTEES - I N OUTLINE 202
8.5.1 The nature of trusteeship 2028.5.2 The nature of fiduciary duties 2038.5.3 Conflicts of interest 2038.5.4 Duty of impartiality 206
8.6 DELEGATION OF TRUSTEES' DUTIES 207
8.6.1 Delegation of trustee's duties 2078.6.2 The devolution of powers or trusts 210
8.7 CONTROL OF TRUSTEES AND PROVISION OF INFORMATION 210
8.7.1 Control of the trustees 2108.7.2 The duty to give accounts and information 212
SUMMARY OF CHAPTER 8 215
9 INVESTMENT OF TRUST FUNDS 217
9.1 INTRODUCTORY 217
9.1.1 General principles 2189.1.2 The trustee's duty of Investment 2209.1.3 Trustee's duty to manage Investments 2239.1.4 The Standard of the duty - 'current portfolio theory' 2259.1.5 Duty to control delegates 2269.1.6 Controlling trustee investment powers, breach of trust 227
SUMMARY OF CHAPTER 9 229
XX
Contents
10 VARIATION OF TRUST FUNDS 231
10.1 INTRODUCTORY 231
10.1.1 Duty not to deviate from the terms of the trust 232
10.1.2 Variation of Trusts Act 1958 233
10.1.3 Other Statutes permitting deviation from terms of the trust 236
10.1.4 The effect of the principle in Saunders v Vautier 238
10.1.5 Termination of trusts 238
SUMMARY OF CHAPTER 10 241
11 PENSION FUNDS 243
11.1 INTRODUCTORY 243
11.2 THE NATURE OF PENSION TRUSTS 244
11.2.1 Settlor 244
11.2.2 Trustees 245
11.2.3 Beneficiaries 246
11.3 THE INVESTMENT OF PENSION FUNDS 246
11.3.1 Powers of Investment 247
11.3.2 Powers of delegation 248
11.3.3 Investment principles 249
11.3.4 Choosing investments 250
11.3.5 Surplus 250
11.3.6 Winding up 250
11.3.7 Conclusion 251
SUMMARY OF CHAPTER 11 253
XXI
Principles of Equity and Trusts
PART V TRUSTS IMPLIED BY LAW
12 WESTDEUTSCHE LANDESBANK VISLINGTON -A NOTE 257
12.1 THE ROLE OF WESTDEUTSCHE IN TRUSTS IMPLIED BY LAW 257
12.1.1 The local authority swaps litigation 25812.1.2 The facts of Westdeutsche Landesbank 259
12.2 WHAT WESTDEUTSCHE LANDESBANK V ISLINGTONDECIDED 261
12.2.1 Introductory 26112.2.2 The decision at first instance 26112.2.3 The Court of Appeal 26212.2.4 The House of Lords (in outline) 263
12.3 DEBATING THE ROLE OF EQUITY 264
12.3.1 An historical basis in family trusts 26412.3.2 Isolating a variety of conceptual approaches 264
12.4 NECESSARILYTANGIBLE PROPERTY 265
12.5 THEAVAILABILrTYOFPROPRIETARYREMEDIES 266
SUMMARY OF CHAPTER 12 269
13 RESULTING TRUSTS 271
13.1 INTRODUCTORY -WHAT IS ARESULTTNG TRUST? 271
13.1.1 Two views 27113.1.2 Resulting trusts in Westdeutsche Landesbank 27213.1.3 The division between 'automatic' and 'presumed'
resulting trust 27313.1.4 Common intention in resulting trusts 27513.1.5 Doubting the automatic/presumed categorisation 27613.1.6 Structure of this chapter 277
Contents
13.2 AUTOMATIC RESULTING TRUSTS 277
13.2.1 No declaration of trust, by mistake 277
13.2.2 Failure of trust 278
13.2.3 Surplus property after Performance of trust 278
13.2.4 Upon dissolution of unincorporated association 279
13.3 QUISTCLOSE TRUSTS 280
13.3.1 The dedsion in Barclays Bank v Quistclose 280
13.4 PRESUMED RESULTING TRUSTS 283
13.4.1 Voluntary gift 284
13.4.2 Contribution to purchase price 286
13.4.3 Presumption of advancement - Special relationships 286
13.4.4 Rebutting the presumption 288
13.4.5 Illegality and resulting trust 290
13.5 MISTAKE AND RESULTING TRUST 295
13.5.1 Restitution on grounds of mistake 295
13.5.2 Common intention and resulting trust in cases of mistake 296
13.6 UNDERSTANDING THE NATURE OF THE RESULTING TRUST 297
13.6.1 How resulting trusts arise 297
13.6.2 Problems with the resulting trust 298
SUMMARY OF CHAFTER 13 303
14 CONSTRUCTIVE TRUSTS 305
14.1 INTRODUCTORY 306
14.1.1 The foundations of the proprietary constructive trust 306
14.1.2 The distinction between proprietary and personal Claims 309
14.1.3 Constructive trust institutional in nature 310
14.1.4 Fiduciary obligations under constructive trust 311
14.2 RULE AGAINST PROFITING FROM FIDUCIARY OFFICE 311
14.2.1 The birth of the principle 311
14.2.2 Modern application of the principle 312
14.2.3 What is the property at issue? 313
Principles of Equity and Trusts
14.2.4 Disclosure 31414.2.5 To whom is the duty owed? 31514.2.6 The appropriate remedy 31514.2.7 Equitable accounting 316
14.3 BRIBES AND UNLAWFUL ACTS 317
14.3.1 Introductory 31714.3.2 Old authorities: when bribes did not lead to a
constructive trust 31814.3.3 The modern view: receipt of bribes leads to a
constructive trust 319
14.4 IMPOSING THE OFFICE OF CONSTRUCTIVE TRUSTEE 321
14.4.1 Introductory 32114.4.2 Knowing receipt 32314.4.3 Dishonest assistance 324
14.5 MISCELLANEOUS CONSTRUCTIVE TRUSTS 326
14.5.1 'Doing everything necessary': Re Rose 32714.5.2 Statute cannot be used as an engine of fraud:
Rochefoucauld v Boustead 32814.5.3 Secret trusts 32814.5.4 On conveyance of property 328
14.6 UNDERSTANDING CONSTRUCTIVE TRUSTS 329
14.6.1 Value judgments, consdence and identity of property 32914.6.2 The remedial nature, in truth, of many institurional
constructive trusts 330
14.6.3 US and Commonwealth comparisons 331
SUMMARY OF CHAPTER 14 335
15 TRUSTS OF HOMES 337
15.1 INTRODUCTORY 338
15.2 EXPRESS TRUSTS OF HOMES 338
15.3 RESULTING TRUSTS - CONTRIBUTION TO PURCHASE PRICE 339
Contents
15.3.1 Setting the scene 34015.3.2 The central text 342
15.4 CONSTRUCTIVE TRUSTS - ACQUISITION OF EQUITABLEINTERESTS BY CONDUCT OR AGREEMENT 342
15.4.1 Foundations of the common intention constructive trusts 34315.4.2 Rosset - the new model common intention
constructive trust 34415.4.3 Application of the common intention constructive
trust concept 34815.4.4 The difficulties with the Rosset strict test 350
15.5 PROPRIETARY ESTOPPEL 351
15.5.1 The test underlying the doctrine of proprietary estoppel 35115.5.2 The nature of the interest awarded under
proprietary estoppel 35315.5.3 The extent and nature of the interest awarded under
proprietary estoppel 354
15.6 THE BALANCE SHEET APPROACH 356
15.6.1 Introductory 35615.6.2 Calculating the size of the equitable interest 35715.6.3 What can be taken into account? 358
15.7 THE FAMILY ASSETS APPROACH 363
15.7.1 Explaining the approach 36315.7.2 Where equality is equity 36315.7.3 Communal undertakings 365
15.8 THE COMMONWEALTH CASES 366
15.8.1 Canada and 'unjust enrichment' 36615.8.2 Australia and 'unconscionability' 36715.8.3 New Zealand - 'reasonable expectations' and 'fairness' 368
15.9 TRENDS IN THE ACADEMIC DISCUSSION OF TRUSTSOF HOMES 369
15.9.1 Framing the problem 36915.9.2 Conceptual issues with the common intention
constructive trust 370
Principles of Equity and Trusts
15.9.3 A taxonomy of trusts of homes 37215.9.4 Conclusions - rethinking the law on trusts of homes 375
15.10TRUSTS OF LAND - THE LEGISLATIVE CONTEXT 376
15.10.1 Trusts of Land and Appointment of Trustees Act 1996 37715.10.2 Understanding the law's manifold treatment of the
family home 383
SUMMARY OF CHAPTER 15 385
PART VI BREACH OF TRUSTAND EQUITABLE CLAIMS
16 LIABILITY FOR BREACH OF TRUSTS 389
16.1 INTRODUCTORY 389
16.2 BREACH OF TRUST 390
16.2.1 Traditional views of breach of trust 39016.2.2 Mapping out the modern test 39116.2.3 Loss as a foundation for the claim 39416.2.4 Exceptions to the causal link - power of sale in relation
to mortgages 39416.2.5 Defences to breach of trust 396
16.3 THE NATURE OF THE REMEDY 396
16.3.1 The remedy in outline 39616.3.2 A personal or a proprietary Obligation
to restore the fund? 39716.3.3 Compensation to restore the value of the trust fund 39816.3.4 The link between common law damages
and compensation 39916.3.5 Choice between remedies 40016.3.6 Valuation of the loss to the trust 40116.3.7 Some reservations about Target Holdings 40116.3.8 The action for breach of trust after termination
of the trust 402
Contents
16.4 PERSONAL LIABILITY TO ACCOUNT: 'STRANGERS TOTHE TRUST' 404
16.4.1 Understanding the genesis of each claim 405
16.4.2 Trustee de son tort 406
16.4.3 Knowing receipt 407
16.4.4 Dishonest assistance 410
16.5 COMPENSATION 416
16.5.1 Introductory 416
16.5.2 Distinguishing between 'restorative' and'compensatory' remedies 416
16.5.3 The measurement of compensation 417
16.5.4 The nature of compensation as part of equity 419
SUMMARY OF CHAPTER 16 421
17 TRACING 423
17.1 TRACING-UNDERSTANDING THE NATURE OF THE CLAIM 424
17.1.1 Introductory 424
17.1.2 The distinction between common lawand equitable tracing 426
17.1.3 Tracing is a process - not a remedy 426
17.2 COMMON LAW TRACING 427
17.2.1 Introductory 427
17.2.2 Understanding the limitations 428
17.2.3 Anewdirection 428
17.3 EQUITABLE TRACING 430
17.3.1 Introductory 430
17.3.2 Need for prior equitable interest/proprietary base 431
17.3.3 Tracing through electronic bank accounts 432
17.3.4 Tracing payments made by mistake 434
17.4 EQUITABLE TRACING INTO MLXED FUNDS 435
17.4.1 Mixture of trust money with trustee's own money 435
17.4.2 Mixture of two trust funds or with innocentvolunteer's money 437
Principles of Equity and Trusts
17.5 CLALMING: TRUSTS AND REMEDIES
17.5.1 A charge or a proportionate share?17.5.2 What is the nature of the constructive trust in equitable
tracing claims?17.5.3 Theft17.5.4 Loss of right to trace17.5.5 Swollen assets theory17.5.6 Operation of a resulting trust
17.6 DEFENCES
17.6.1 Change of position17.6.2 Passing on17.6.3 Bonafide purchaser for value without notice
17.7 CONCLUSIONS
17.7.1 An argument for conflation17.7.2 The effect of Westdeutsche Landesbank on asserting
proprietary rights
SUMMARY OF CHAPTER 17
440
440
441442443444445
446
446
447447
448
448
449
453
18 DOCTRINE OF NOTICE ANDUNDUEINFLUENCE 455
18.1 THE DOCTRINE OF NOTICE 455
18.2 UNDUE INFLUENCE 457
18.2.1 A species of constructive fraud 45818.2.2 Two classes of undue influence 458
18.3 MISREPRESENTATION AND EQUITABLE WRONGS 461
18.3.1 Misrepresentation in equity 46118.3.2 Equitable wrongs 462
18.4 SETTING MORTGAGES ASIDE - O'BRJEN AND ALL THAT 462
18.4.1 Context 46318.4.2 Barclays Bank v O'Brien 46418.4.3 Comparison with CIBC v Pitt 46618.4.4 Manifest disadvantage 467
Contents
18.4.5 The bürden of proof 469
18.4.6 Mortgagee's means of discharging this duty 470
18.4.7 The liability of the solicitor 471
18.4.8 Setting aside in part or in whole 472
18.5 ASURVEYOF THE'NEW'UNDUE INFLUENCE 475
18.5.1 The awkward tie in between undue influence and thedoctrine of notice 475
18.5.2 Existing proprietary rights or preventingunconscionable behaviour? 476
18.5.3 Misrepresentation: a reason for equitable intervention? 477
18.5.4 The balance between mortgagor and mortgagee 478
18.5.5 Conclusion: part of the law restrictingunconscionable behaviour 479
SUMMARY OF CHAPTER 18 481
PART VII EQUITABLE REMEDIES
19 SPECIFIC PERFORMANCE 485
19.1 THE NATURE OF SPECIFIC PERFORMANCE 485
19.1.1 Introductory 485
19.1.2 Spedfic Performance acts in personam 486
19.1.3 No requirement of breach 486
19.2 CONTRACTS WHERE SPECIFIC PERFORMANCEISAVAILABLE 486
19.2.1 Specific Performance in relation to land 487
19.2.2 Spedfic Performance in relation to chatteis 487
19.3 CONTRACTS WHERE SPECIFIC PERFORMANCE ISUNAVAILABLE 488
19.3.1 Illegal and immoral contracts 489
19.3.2 No consideration 489
19.3.3 Contracts involving personal skill 489
19.3.4 Specific Performance in money transactions 490
Principles of Equity and Trusts
19.3.5 Contracts for insubstantial interests 49119.3.6 Contracts requiring supervision 49219.3.7 Contracts not mutually binding 493
19.4 DEFENCESTO AN ACTION FOR SPECMC PERFORMANCE 493
19.4.1 No enforceable contract 49319.4.2 Absence of writing 49319.4.3 Misrepresentation 49419.4.4 Undue influence and unconscionable bargains 49419.4.5 Mistake 49519.4.6 Lapse of time 49619.4.7 Damages in Heu of specific Performance 496
SUMMARY OF CHAPTER 19 497
20 INJUNCTIONS 499
20.1 NATURE OF INJUNCTIONS 500
20.1.1 Distinguishing injunctions from common law remedies 50020.1.2 General equitable principles governing injunctions 502
20.2 CLASSIFICAnON OF INJUNCTIONS 504
20.2.1 Mandatory injunctions 50420.2.2 Prohibitory injunctions 50420.2.3 Injunctions quia timet 504
20.3 INTERLOCUTORY INJUNCTIONS 505
20.3.1 Introduction 50520.3.2 The core test - 'balance of convenience' 50620.3.3 Relationship with common law remedies 508
20.4 MAREVA INJUNCTIONS 508
20.4.1 Introductory 50820.4.2 The nature of the Mareva injunction 50920.4.3 The core test 50920.4.4 The worldwide Mareva injunction 510
Contents
20.5 ANTON PILLER ORDERS 511
20.5.1 Introduction 511
20.5.2 The requirements for grant of an Anton Piller order 512
20.6 THE INTERACTION WITH THE COMMON LAW 512
20.6.1 Damages in lieu of injunction 513
20.6.2 The measure of damages 513
SUMMARY OF CHAFTER 20 515
21 RESCISSION AND RECTIFICATION 517
21.1 INTRODUCTORY 517
21.2 RESCISSION 518
21.2.1 The scope of equity 518
21.2.2 Misrepresentation 519
21.2.3 Undue influence and unconscionable bargains 520
21.2.4 Mistake 521
21.2.5 Loss of the right to rescind 524
21.3 RECTIFICATION 525
21.3.1 The nature of the remedy of rectification 526
21.3.2 Common mistake between parties 526
21.3.3 Unilateral mistake 526
21.3.4 Rectification of voluntary settlements 527
21.3.5 Delivery up and cancellation of documents 527
21.3.6 Neexeatregno 528
SUMMARY OF CHAPTER 21 529
22 SUBROGATION 531
22.1 INTRODUCTORY 531
22.2 SIMPLE SUBROGATION 532
22.3 REVTvTNG SUBROGATION 533
22.3.1 Introductory 533
22.3.2 Reviving extinguished rights 534
Principles of Equity and Trusts
22.3.3 Subrogation and tracing. 53522.3.4 Assumption of risk 53622.3.5 Partpayments 53822.3.6 Does discharge of another's debt extinguish that debt? 54122.3.7 The potential Operation of Subrogation in financial
markets transactions 54122.3.8 Conclusions on the nature of Subrogation -
the availability of secured rights through Subrogation 542
SUMMARY OF CHAPTER 22 545
PART VIII ENDNOTE -TRUSTS AND RESTITUTION
23 ENDNOTE - RETHINKING THE NATURE OFEQUITY AND THE TRUST 549
23.1 INTRODUCTORY
23.1.1 Equity's development23.1.2 Equity - in place of injusrice23.1.3 The role of the trust
23.2 SOMETHEMES
23.2.1 Proprietary rights cases23.2.2 In personam cases23.2.3 Restitution cases23.2.4 Bright line cases
23.3 EXPLORING THESE THEMES
23.3.1 The concretisation of equitable principles23.3.2 The crisis of equity in the 1990s23.3.3 Restitution of an unjust enrichment23.3.3 An example - resulting trusts and restitution23.3.4 Condusion
Further Reading
Index
549
549
551552
553
554
555556557
557
557
558559
561563
565573
XXXll