UNIVERSITY OF EMBU

 

Course Outline: Law of Equity (CODE 303)

Course Summary:

This course offers an in-depth study of the principles of Equity and Trusts law, with a focus on the creation, administration, and enforcement of trusts. Students will explore key equitable doctrines, trustee duties, fiduciary responsibilities, and remedies available in cases of breach. The course also examines third-party liabilities, tracing procedures, and the balance between protecting trust property and facilitating commercial transactions.

Course Objectives:

By the end of this course, students should be able to:

1. Understand the historical development and fundamental principles of Equity and Trusts law.
2. Analyze the creation and constitution of various types of trusts, including the legal requirements and formalities.
3. Evaluate the duties and responsibilities of trustees and fiduciaries, and understand the consequences of breaches.
4. Apply the principles of equitable remedies, including tracing, in scenarios involving third-party liability.
5. Critically assess relevant case law and statutory provisions that shape the law of Equity and Trusts.
6. Understand the limitations and defenses available in equity, particularly in cases involving the disposal of trust property.

Expected Learning Outcomes:

Upon successful completion of this course, students will be able to:

1. Define and explain the core concepts and principles of Equity and Trust law.
2. Analyze the requirements for the creation, constitution, and formalities of trusts.
3. Identify the roles and duties of trustees and fiduciaries, and evaluate the implications of breach.
4. Apply equitable principles to resolve legal problems involving third parties and trust property.
5. Critically discuss key cases and their impact on the development of Equity and Trust law.
6. Understand and explain the limits of equitable remedies and the defense mechanisms available.

Course Content:

Topic 1: Introduction to Equity and Trusts

• Overview of Equity: Historical Development and Maxims
• Introduction to Trusts: Definition, Purposes, and Key Elements
• Types of Trusts: Express, Implied, Resulting, and Constructive Trusts
• Distinction Between Legal and Equitable Rights

Topic 2: Creating the Trust (The Three Certainties)

• Certainty of Intention:
• Analysis of the Language and Actions Indicating Trust Creation
• Relevant Case Law: Knight v Knight (1840) 3 Beav 148, Re Adams and Kensington Vestry (1884) 27 Ch D 394
• Certainty of Subject Matter:
• Identification and Specification of Trust Property
• Case Studies: Re London Wine Co (Shippers) Ltd [1986] PCC 121, Hunter v Moss [1994] 1 WLR 452
• Certainty of Objects/Beneficiaries:
• Determining the Beneficiaries: Fixed vs. Discretionary Trusts
• Key Case Law: Re Gulbenkian’s Settlements [1970] AC 508, McPhail v Doulton [1971] AC 424

Topic 3: Written Formalities and the Constitution of the Trust

• Formalities for Creation of Trusts:
• Statutory Requirements: Wills Act 1837, Law of Property Act 1925
• Impact of Failure to Meet Formalities
• Constitution of Trusts:
• Fully Constituted vs. Incompletely Constituted Trusts
• Milroy v Lord (1862) 4 De G.F. & J. 264
• Disposition of Equitable Interests:
• Case Law: Vandervell v Inland Revenue Commissioners [1967] 2 AC 291, Re Rose [1952] Ch 499

Topic 4: Trustee Duties and Fiduciary Responsibilities

• Trustee Duties and Responsibilities:
• Statutory Duties under Trustee Act, Cap 167 and Trusts of Land Act, Cap 290
• Case Law: Keech v Sandford (1726) Sel. Cas. Ch 61, Nestle v National Westminster Bank [1993] 1 WLR 1260
• Duty of Care: Common Law Standards and Statutory Requirements
• Fiduciary Duties:
• The 'No Profit' and 'No Conflict' Rules
• Case Studies: Boardman v Phipps [1966] 2 AC 46, FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45
• Breach of Trust and Remedies:
• Types of Breach: Misapplication, Negligence, and Fraud
• Remedies: Compensation, Restitution, Constructive Trusts

Topic 5: Third-Party Liability and Tracing

• Third-Party Involvement in Breach of Trust:
• Liability for Knowing Receipt and Dishonest Assistance
• Case Studies: Royal Brunei Airlines v Tan [1995] 2 AC 378, BCCI (Overseas) Ltd v Akindele [2000] 4 All ER 221
• Tracing and Following Trust Property:
• Common Law vs. Equitable Tracing Principles
• Remedies and Limitations: Foskett v McKeown [2001] 1 AC 102, Re Diplock [1948] Ch 465
• Defenses Against Tracing Claims:
• Bona Fide Purchaser, Change of Position, and Inequitable Conduct

Teaching and Learning Strategies:

• Lectures: Provide a comprehensive understanding of core concepts and legal principles.
• Seminars and Tutorials: Encourage discussion, debate, and deeper analysis of complex legal issues and case law.
• Case Studies: Analyze real-world scenarios and judicial decisions to illustrate key legal principles.
• Group Exercises and Debates: Facilitate collaborative learning and application of equitable doctrines to practical problems.

Assessment Methods:

• Continuous Assessment Tests (CATs): 30%
• Includes written assignments, case study analysis, and class participation.
• Final Examination: 70%

Core reading Materials

98 items

 

Reading List Guidance for Students: Ebooks (1 items)

Some Ebooks have limited-user licences, as determined by the publisher. If other students are using the item, it will show as unavailable until they finish, and you may have to wait and try again.To ensure access, please plan ahead and once you access the eBook, download the required chapters and save as PDF. Downloaded chapters can be saved for later study and do not expire.Please avoid downloading the full eBook unless absolutely necessary as it will lock it for 24 hours for everyone else.

 

Recommended for Student Purchase (4 items)

The principles of equity & trusts - Graham Virgo, 2020

| Suggested for student purchase | Unlimited Access user licences. Students may download and save as PDF. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire. Print version details below

The principles of equity & trusts - Graham Virgo, 2020

| Suggested for student purchase

Equity & trusts: text, cases, and materials - Paul S. Davies, Graham Virgo, 2019

| Suggested for student purchase | Unlimited Access user licences. Students may download and save as PDF. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire. Print version details below

Equity & trusts: text, cases, and materials - Paul S. Davies, Graham Virgo, 2019

| Suggested for student purchase

 

 

Core Reading (8 items)

Trusts & equity - Gary Watt, 2020

| Recommended | Unlimited Access user licences. Students may download and save as PDF. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire

Equity & trusts law - Gary Watt, 2021

| Recommended | Unlimited Access user licences. Students may download and save as PDF. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire. Print version details below

Equity and trusts law - Gary Watt, 2021

 

 

| Recommended | Other editions available

Moffat's trusts law: text and materials - Jonathan Garton, Rebecca Probert, Gerry M. D. Bean, 2020

| Recommended | Multiple user licences. Students may download and save as PDF up to 435 pages from this edition. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire. Other online editions available

Equity & trusts - Katharine Davies, Susan Farran, 2019

| Recommended | 2 x Single user licences. Students may download and save as PDF up to 83 pages from this edition. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire. Print version details below

Equity and Trusts - Susan Farran, Katharine Davies, 2019

| Recommended

The law of trusts - J. E. Penner, 2019

| Recommended | Unlimited Access user licences. Students may download and save as PDF. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire. Print version details below

The Law of Trusts - J. E. Penner, Jeremiah Lau, 2019

| Recommended

 

 

Casebooks (1 items)

Complete equity and trusts: text, cases, and materials - Richard Clements, Ademola Abass, 2018

| Recommended | Unlimited Access user licences. Students may download and save as PDF. Any PDF software can be used to read. Downloaded chapters can be saved for later study, as they do not expire.

 

Seminar 1 - Introduction to Equity and the Trust (5 items)

Please read the introduction to Equity chapter(s) in your chosen textbook. In addition, we suggest that you read at least one journal article from the following selection.

We Do This At Common Law But That In Equity - A. Burrows, 2002-03-01

| Optional

Two Maxims of Equity - Simon Gardner, 1995-03

| Optional

; The development of equity and the "good person" philosophy in common law systemsWestlaw UK Journals and Law Reviews

| Optional

; Fusion, Fallacy and Confusion; A Comparative StudyWestlaw UK Journals and Law Reviews

| Optional

The place of the trust in English law and in English life - Paul Matthews, 2013-04-01

| Optional

 

 

Seminar 2 - Creating the Trust - the Three Certainties (8 items)

Please see the relevant chapters in your chosen textbook on creating an express trust/the three certainties.

In addition, we suggest that you read at least one journal article from the following selection.

;  Flexible willsWestlaw UK Journals and Law Reviews

| Optional

Right? Wrong? Outdated?: An evaluation of the controversial Hunter v Moss - Benny Chung, Jason Chun Wing Chiu, 2020-03-01

| Optional

McPhail v. Doulton and the Fundamental Distinctions between Trusts and Powers - Donnell,

B. .

| Optional | To access through Hein please enter "University of Sussex" in the right hand box titled "Off-Campus/Remote Access"

Opinion: From China to Peru - J. Goldsworth, 1998-10-01

| Optional

; Administrative unworkability - a reassessment of an abiding problem Westlaw UK Journals and Law Reviews

| Optional

;  Uncertainty of subject-matter of trustsWestlaw UK Journals and Law Reviews - 2011

| Optional

Can arbiters resolve conceptual uncertainty regarding trust beneficiaries? - David Wilde, 2020

| Optional

'I have bought it all for you'

| Optional

 

 

Seminar 3 - Written Formalities and the Constitution of the Trust (16 items)

Please read the relevant chapters in your textbook on (a) Written formalities necessary to create valid trust (b) Constitution of trusts and (c) Disposition of equitable Interests.

 

In addition, we suggest that you read at least one journal article from the following selection.

Self-declarations of trust - Sinéad Agnew*, 2019

| Optional

Curtis and others v Pulbrook and others - T. Angus, 2012-10-01

| Optional

;  King v. Dubrey - a donatio mortis causa too far?Westlaw UK Journals and Law Reviews

| Optional

; Donationes mortis causa: a doctrine on its deathbed?Westlaw UK Journals and Law Reviews

| Optional

RE ROSE : ? - Abigail Doggett, 2003-07-01

| Optional

; The role of the trust mechanism in the rule in re RoseWestlaw UK Journals and Law Reviews

| Optional

Zeital v Kaye: doing everything necessary - a recent manifestation of an ongoing issue - GLLHG, 2010

| Optional

; Perfecting imperfect gifts and trusts: have we reached the end of the Chancellor's foot?Westlaw UK Journals and Law Reviews

| Optional

;  Problems in the rule in Strong v. BirdWestlaw UK Journals and Law Reviews

| Optional

;  In search of perfection: the re Rose rule rationaleWestlaw UK Journals and Law Reviews

| Optional

How difficult is it to gift a share? Shah v Shah [2010] EWCA Civ 1408 - W. McCormick, 2011-06-01

| Optional

; Assignments of Equitable Interests and the Origins of Re RoseWestlaw UK Journals and Law Reviews

| Optional

; Careless share givingWestlaw UK Journals and Law Reviews

| Optional

Grey, Oughtred and Vandervell - A Contextual Reappraisal - Green, B. ., Grey

| Optional

;  Oughtred revisitedWestlaw UK Journals and Law Reviews

| Optional

Mere formalities - M. P. Thompson, 1996

| Optional

 

 

Seminar 4 - Trustee Duties/Fiduciary Duties and Breach (26 items)

The reading for this seminar has been split into two reading lists. The top half of the reading list relates to Trustee Duties and the bottom half to Fiduciary Duties.

 

Trustee Duties (10 items)

Please read the relevant chapter(s) in your textbook on Trustee Duties. In addition, please choose one article on Trustee Duties from the list below to read.

Sink or Swim? The future for the rule in re Hastings-Bass - J. Bray, 2012-02-01

| Optional

REVIEWING THE REVIEW OF FIDUCIARY DISCRETIONS - Matthew Conaglen, 2011-07

| Optional

; It's "clean hands" again: the dirtiness of not paying tax considered in the Supreme CourtWestlaw UK Journals and Law Reviews

| Optional

Trustee Act 2000 - Jonathan Garton, 2001

| Optional

;  Limiting re Hastings-Bass?Westlaw UK Journals and Law Reviews

| Optional

; Futter v. HMRC; Pitt v. HMRC: the rule on re Hastings-Bass and of mistake reviewedWestlaw UK Journals and Law Reviews

| Optional

CONTROLLING FIDUCIARY POWER - R.C. Nolan, 2009-07

| Optional

The law relating to trustee exoneration clauses - Shelly Saluja, 2014

| Optional

Modern trustee decision-making: unpacking the duty of proper consideration - Mark Studer

, 2016-11

| Optional

ETHICAL INVESTMENTS: A CASE OF DISJOINTED THINKING - Rosy Thornton, 2008-07

| Optional

 

 

Fiduciary Duties (16 items)

Please read the relevant chapter(s) in your textbook on Fiduciary Duties. In addition, please choose one article on Fiduciary Duties from the list below to read.

; The Content of Fiduciary ObligationHeinOnline Law Journal LibraryHeinOnline Law Journal Library - Birks, Peter, 2000

| Optional

Constructive trusts and breach of fiduciary duty FHR European Ventures LLP v Mankarious [2013] EWCA Civ 17; [2013] 1 P. & C.R. DG24 - Robert Chambers*, 2013

| Optional

Just abolish the no profit rule - Shue Sing Churk*, 2015

| Optional

Strict Fiduciary Loyalty and Accounts of Profits - Matthew Conaglen, 2006-07

| Optional

A RE-APPRAISAL OF THE FIDUCIARY SELF-DEALING AND FAIR-DEALING RULES - Matthew

Conaglen, 2006-07

| Optional

PROPRIETARY REMEDIES FOR BREACH OF FIDUCIARY DUTY - Matthew Conaglen, 2014-11

| Optional

;  When do fiduciary duties arise?Westlaw UK Journals and Law Reviews - 2006

| Optional

;  Bribes and constructive trustsWestlaw UK Journals and Law Reviews

| Optional

; Proprietary relief in Boardman v. PhippsHeinOnline Law Journal LibraryHeinOnline Law Journal LibraryMiscellaneous Ejournals

| Optional

THE REMEDIAL PRINCIPLE OF KEECH v. SANDFORD RECONSIDERED - Andrew D. Hicks, 2010-07

| Optional

;  Rethinking the content of the fiduciary obligationWestlaw UK Journals and Law Reviews

| Optional

; FHR European Ventures LLP: the demise of Sinclair v. Versailles and a welcome return to orthodoxyLexisLibrary - McGrath, Paul

| Optional | You will need to click through to the article

CONTROLLING FIDUCIARY POWER - R.C. Nolan, 2009-07

| Optional

; Fiduciary relationships: ensuring the loyal exercise of judgment on behalf of anotherWestlaw UK Journals and Law Reviews - 2015

| Optional

CONSTRUCTIVE TRUSTS AND THE NO-PROFIT RULE - Lionel Smith, 2013-07

| Optional

Four questions on fiduciaries - Sarah Worthington, 2018

| Optional

 

Seminar 5 - Third Party Liability and Tracing (29 items)

The reading for this seminar has been split into two reading lists. The top half of the reading list relates to Third Party Liability and the bottom half to Tracing.

Third Party Liability (29 items)

Please read the relevant chapter(s) in your textbook on Third Party Liability. It may also be called Accessory or Stranger Liability. In addition, please choose one article on Third Party Liability from the list below to read.

'Goodbye' Knowing Receipt. 'Hello' Unconscientious Receipt - S. B. Thomas, 2001-06-01

| Optional

; Gain-based remedies for dishonest assistanceWestlaw UK Journals and Law Reviews - 2011

| Optional

;  Unconscionability: a unifying theme in equity?Westlaw UK Journals and Law Reviews

| Optional

ACCOUNT OF PROFITS FOR DISHONEST ASSISTANCE - Peter Devonshire, 2015-07

| Optional

Recipient liability in the Privy Council: Arthur v Attorney General of the Turks & Caicos Islands Arthur v Attorney General of the Turks and Caicos Islands [2012] UKPC 30 - Nicholas Hopkins*, 2013

| Optional

DISHONEST ASSISTANCE AND ACCOUNT OF PROFITS - William Gummow, 2015-11

| Optional

; The underlying concept of accessory liability for breach of trustWestlaw UK Journals and Law Reviews

| Optional

Dishonestly assisting in a breach of trust: further confirmation that Barlow Clowes will be followed in the Court of Appeal, and a robust conclusion on the facts: Starglade Properties Ltd v Nash [2010] EWCA Civ 1314 - D. McCue, 2011-03-01

| Optional

How Knowing is Knowing Receipt? - Richard Nolan, 2000-11-16

| Optional

;  Civil recovery after fraudWestlaw UK Journals and Law Reviews - 2010

| Optional

Breach of fiduciary duty, equitable wrongs and proprietary remedies: implications for commercial agents - Sukhninder Panesar, 2016

| Optional

Constructive Trusts: Knowing Receipt and Unconscionability - M. Pawlowski, 2001-03-01

| Optional

; Royal Brunei dishonesty: a clear welcome to Barlow ClowesWestlaw UK Journals and Law Reviews

| Optional

Dishonest assistance involving solicitors: Clydesdale Bank Plc v Workman - David Salmons, 2016

| Optional

CHEATING AND DISHONESTY - Graham Virgo, 2018-03

| Optional

; Remodelling Knowing Receipt as a Gains-Based WrongWestlaw UK Journals and Law Reviews - Derek Whayman

| Optional

 

The Process of Tracing. (13 items)

Please see the relevant chapters in your chosen text/casebook on the process of tracing. In addition, please read at least one journal article from the following selection.

;  Difficulties with tracing backwardsWestlaw UK Journals and Law Reviews

| Optional

Dummy asset tracing - Tatiana Cutts*, 2019

| Optional

IDENTIFICATION OF MONEY AT COMMON LAW - D.M. Fox, 2010-03

| Optional

; Developing the law of trusts for the twenty-first centuryWestlaw UK Journals and Law Reviews

| Optional

The availability of proprietary remedies - A. J. Oakley, 1997

| Optional

;  Tracing the proceeds of fraudWestlaw UK Journals and Law Reviews

| Optional

;  The demise of the rule of Clayton's caseWestlaw UK Journals and Law Reviews

| Optional

Tracing into improvements, debts and, overdrawn accounts - M. Pawlowski, 2011-06-01

| Optional

CLAIMS AGAINST THIRD-PARTY RECIPIENTS OF TRUST PROPERTY - David Salmons, 2017-07

| Optional

Vindicating the proprietary nature of tracing Westlaw UK Journals and Law Reviews - 2012

| Optional

;  Estoppel and change of positionWestlaw UK Journals and Law Reviews

| Optional

RECOVERING MISAPPLIED CORPORATE ASSETS FROM REMOTER RECIPIENTS - Stephen

Watterson, 2014-11

| Optional