Cambridge University Press 978-1-316-62194-3 — Equity and Trusts in Australia Michael Bryan , Vicki Vann , Susan Barkehall Thomas Index More Information INDEX

accounts of profits, 54–5, 169 limitation statutes, 84–5 remedies for. See remedies allowances, 57–8 unclean hands, 86–8, 168 for breach of trust breach of confidence, 197 beneficiaries, 206 ‘but for’ test, 65–6, 333 calculation of, 55–7 administration of trust and, acquiescence, 85–6 207 calculation of equitable as equitable defence to creditors’ rights and, 313–14 compensation, 60–1 breach of trust, 329–30 differences between fixed breach of fiduciary duty, overlap with laches, 85–6 and discretionary trusts 63–5 advancement for, 207 breach of trust, 61–3 presumption of, 357–9 ‘gift-over’ right, 208–9 calculation of equitable agency indemnification of trustees, damages trusts and, 210–11 311–13 causation standard, 65–6 aggravated damages, 68 interest, trustees’ right to common law adjustments to Anton Piller order, 39 impound, 314 quantum, 66–8 Aristotle, 4 investment of trust funds, categories of constructive trusts, assessment of equitable 297, 299 371 damages, 51 ‘list certainty’, 227 as remedy to proprietary in addition to injunction or sui juris, 278, 312 estoppel, 380–2 specific performance, 51 trust property and, 208 as restitutionary remedy in substitution for injunction trustees’ right to recover for unjust enrichment, or specific performance, overpayment from, 315 380–2 51–2 breach of confidence, 17–18, 47, Baumgartner constructive assignments 50, 68 trusts, 375–9 equitable property, 138–9 defences to. See defences to common intention, family future property, 137–8 breach of confidence property disputes and, gifts, 133–6 remedies for. See remedies 373–5 law of, 130 for breach of confidence imposed for breach of legal property, 131–2 breach of contract fiduciary obligation, legal property only in equity, injuctions to restrain, 382–5 141 correlation with specific imposed over property legally ineffective, 132 performance, 43–4 transferred under non-assignable rights, 136–7 breach of fiduciary duty, 100 specially enforceable property terminology, 130–1 assistance in, 180–1 contracts, 390–1 relevance of consideration, knowing receipt and, 175–8 imposed over stolen 132 knowledge of, 181 money and its proceeds, statutory, 139–41 breach of fiduciary obligation, 385–6 statutory formalities, 141–3 17 certainty of intention, 216–17 constructive trusts imposed certainty of objects, 216, 225–6 Baden scale of knowledge, for, 382–5 trustees’ duties and, 231 176–8, 181–2 informed consent as defence certainty of subject-matter, 216, bankruptcy to action for, 168–9 224–5 trusts and, 242–3 knowing receipt as, 174 charitable purposes bars to relief participants in. See definition for purposes of Cth acquiescence, 85–6 participants in breach of legislation, 250 delay, 83–4 fiduciary obligation four ‘heads’ of, 249 effect of order on third remedies for, 169–70 charitable trusts, 203, 207, 216, parties, 89–90 breach of trust, 322 336 hardship, 88–9, 168 defences for. See defences administrative schemes, laches, 83–5, 168 for breach of trust 259–60 limitation of action by dishonest and fraudulent, advancement of education, analogy, 85 179–80 251–2

393

© in this web service Cambridge University Press www.cambridge.org Cambridge University Press 978-1-316-62194-3 — Equity and Trusts in Australia Michael Bryan , Vicki Vann , Susan Barkehall Thomas Index More Information

charitable trusts (cont.) consideration damages advancement of religion, relevance in assignment, 132 aggravated, 68 252–3 constructive trustees, 172–4, equitable. See equitable differences to express trusts, 369 damages 248 constructive trusts, 27, 30, 169, exemplary, 67–8 for a valid charitable 216, 340, 369 debt purpose, 248 categories of. See categories trusts and, 213–14 historical development of, of constructive trusts declaration, 78–9 249–50 compared to express trusts, criteria for award of, 79–80 political purposes, 253–5 370 equitable bars to relief and, public benefit, 256–7 criteria for imposition of, 373, 80–1 public or section of the 376 defences for breach of public, 257–8 impact of family law confidence purposes beneficial to the legislation on, 379–80 change of position, 193 community, 253 institutional and remedial, iniquity, 192 relief of poverty, 250–1 369–70 defences for breach of trust support for the aged and unconscionability and, 372 equitable defences. See impotent, 251 unjust enrichment and, equitable defences for taxation legislation and, 248 371–2 breach of trust chattels, 131 wrongdoing and, 372–3 exculpation in the trust contracts for sale of, 37 contract law instrument, 322–5 injunctions to restrain loss or equity in, 94 statutory exculpation. See damage to, 45 contracts statutory exculpation chose in action, 131 construction, 34–5 defences to breach of civil procedure equitable remedies and, confidence equitable remedies and, 14–15 public interest, 192–3 18–19 performance of personal delay, 83–4 civil wrongs services, 35–6 discretion equitable remedies and, prerequisites to award of award of a declaration and, 17–18 specific performance, 80 claiming, 339 36–8 discrimination ‘cloak for fraud’ doctrine, 236–7 sale of chattels, 37 trusts and, 243–4 coercion, 29 sale of land, 37 disgorgement, 29, 169 common law to pay or lend money, 38 doctrine of constructive notice, competition with equity, 7–8 trusts and, 212–13, 220–1 176 differences to equity, 6 contribution, 18 doctrine of cy-près, 259 remedies, 26 contributory negligence, 67 doctrine of incorporation by tracing and claiming at, 340 contructive trusts reference, 238 ‘common sense’ test, 65–6 compared to resulting trusts, doctrine of mutual wills, 388–90 compensation, 29, 169 370–1 doctrine of notice, 176 condition Court of Chancery, 5, 203 duress, 100 trusts and, 211–12 appointment of confidence chancellors, 6 efficient market hypothesis, breach of. See breach of discretion of chancellors, 7 291 confidence Earl of Oxford’s Case,7,9 equitable charge, 211 equitable obligation of. See issue of writs by, 5–6 equitable compensation, 58, 182 equitable obligation of petitions to, 6 calculation of. See calculation confidence reform and judicature of equitable confidential information legislation, 8–10 compensation misuse of, 190–1 summons to appear before emergence of jurisdiction to confidentiality Chancellor, 6 award, 58–60 quality of, 187–8 uses of land disputes, 6–7 equitable damages, 49–50 consent criminal liability, 26 assessment of. See as equitable defence for criterion certainty test, 226–9 assessment of equitable breach of trust, 329 cy-près schemes, 259–60 damages

394 Index

availablility for equitable objectives of. See objectives essential characteristics, wrongs, 50 of equitable remedies 204–5 jurisdiction to award Lord personal, 27 methods of creating. See Cairns’ Act damages, property, 15–17 methods of creating a 50–1 proprietary remedies. See trust equitable defences for breach of proprietary remedies parties to, 205–6 trust, 328–9 specific performance. See private, 336 acquiescence and release, specific performance purposes of, 202 329–30 equitable wrongs resulting trust arising from consent, 329 breach of confidence, 17–18 failure of, 364–5 equitable intervention breach of fiduciary ‘three certainties’ contribution, 18 obligation, 17 requirements, 216 general principles of, 99–100 equities and equitable interests, types of, 206–8 marshalling, 18 127–8 subrogation, 18 equity family property equitable obligation of Aristotelian, 4 constructive trusts and, confidence, 186–7 in contract law, 94 360–3, 373–5 Australian developments, differences to common law, fiduciary obligations, 150, 195–6 6 159–63 circumstances importing, exclusive and auxilliary authorisation and ratification, 189–90 jurisdictions of, 13–14 163 elements of, 186 institutional. See institutional Boardman v Phipps, 165–7 English developments, 194–5 equity breach of. See breach of misuse of confidential map of, 13–19 fiduciary obligation information, 190–1 maxims of, 19–21 Chan v Zacharia, 167–8 protection of private meaning of, 4 core, 159–60 information, 193–4 monetary remedies in. See deterrence and, 163–4 quality of confidentiality, monetary remedies duty of loyalty, 164 187–8 place in modern law, 12–13 Keech v Sandford, 164–5 showing of detriment reception of in Australia, stringency of, 163–8 suffered, 191–2 10–11 trustees. See trustees’ specificity, 187 substantive fairness and, fiduciary obligations equitable ownership, 125–6 112–18 fiduciary relationships equitable property tracing and claiming at, concurrent contractual, 155–7 assignment, 138–9 340–1 distortion of fiduciary distinction between legal voidable transactions and, concept, 157–8 property, 131 99–100 ‘horizontal’ relationships, gift of, 139 estoppel, 83, 94 154–5 equitable proprietary interests, common law, 94–5 recognised, 150–1 120–2 criteria, 96 scope of, 158–9 equitable relief equitable, 95–9 ‘vertical’, 152–4 against forfeiture, 115–18 promise enforcement and, 94 following, 339 bars to. See bars to relief proprietary. See proprietary forfeiture equitable remedies, 13–14, 26 estoppel equitable relief against, bars to. See bars to relief exceptions to indefeasibility, 115–18 civil procedure, 18–19 179 fraud civil wrongs, 17–18 exemplary damages, 67–8 actual, 323 contract, 14–15 express trusts equitable, 323 discretionary nature of, 26, compared to constructive fraudulent misrepresentation, 83 trusts, 370 100 equitable damages. See see definition, 202–3 fusion fallacy, 10 equitable damages difference to resulting trusts, future property ‘equitable defences’,83 354 assignments, 137–8 evolution of, 26 differences to charitable Holyroyd v Marshall injuctions. See injunctions trusts, 248 principles, 391–2

Index 395

gifts, 100, 102, 106, 112, 130, competition between laches, 83–5, 168 132–6, 356 common law and overlap with acquiescence, distinguishable from trusts, equity, 7–8 85–6 204 medieval origins, 5–7 legal property equitable property, 139 inter vivos trusts assignments, 131–2 to unincorporated by declaration, formalities distinction between associations, 262 for, 235 equitable property, 131 by transfer, formalities for, only assigned in equity, 141 hardship, 88–9, 168 236–7 liens investment of trust funds equitable, 13–14 in personam principle, 179 applying other duties of law trustee’s liens, 27 informed consent to, 296 limitation of action by analogy, breach of fiduciary duty to act impartially 85 obligation and, 168–9 between investors, 299 limitation statutes, 84–5 iniquity, 192 duty to act in best interests of Lord Cairns’ Act,49–50, 196–7 disclosure of, 192 beneficiaries, 297 damages, jurisdiction to injunctions, 38–9, 94 duty to invest in non- award, 50–1 ‘anti-suit’,39 speculative investments, assessment of equitable 297–8 Mareva order, 39 damages in addition to, duty to take advice, 299–300 marshalling, 18 51 exculpatory provisions, methods of creating a trust assessment of equitable 302–3 by transfer, 235–6 damages in substitution matters to be considered by self-declaration of trust, 234 for, 51–2 trustees, 300–1 misrepresentation, 94 breach of confidence, 197 power to invest, 293 mistake, 94 criteria for award of, 40–1 prudent investment, 293–5 common, 76–7 ex parte, 39 review of, 295–6 unilateral, 77 exercise of discretion, sources of trustees’ mitigation of loss, 67 47–8 investment powers, modern portfolio theory, 291 fairness and, 47–8 290–2 monetary remedies futility and, 48 statutory model, 292 accounts of profits. See interim, 39 trustees’ duties and, 268, 290 accounts of profits interlocutory, 39, 41–2 equitable compensation. See jurisdiction to award, 40 judicature legislation, 9–10 equitable compensation mandatory, 39, 42–3 Australia, 11–12 monetary remedies for breach perpetual, 39 limits of, 9 of trust plaintiff’s remedy if denied, jurisdiction compensation for breach of 48–9 award of a declaration and, conflicts rule, 334 quia timet,39 79 negligence in performance, third party interests and 333 role of public interest, knowing assistance, 174 prohibited breaches, 331–3 46–7 liability for, 179–81 statutory provisions, 334–5 to restrain breach of contract, remedies for, 182–3 unauthorised profits, 331 43–4 type of knowledge, 181–2 More, Sir Thomas, 6 to restrain commission of a knowing inducement, 183 mutuality, 33 tort. See injunctions to knowing receipt, 174 restrain commission of a as breach of fiduciary negligent misstatement, 100 tort obligation, 174 non-assignable rights, 136–7 injunctions to restrain knowledge of breach of non-charitable trusts, 260 commission of a tort fiduciary duty, 175 problems with, 260–1 injunctions to restrain loss or receipt of property by nullification, 30 damage to chattels, 45 defendant, 174–5 injunctions to restrain remedies for, 178–9 objectives of equitable remedies trespass to land, 44 type of knowledge of breach coercion, 29 institutional equity, 5 of fiduciary duty, 176–8 compensation, 29

396 Index

disgorgement, 29 contractual transfer of, 388 remedies nullification, 30 equitable. See equitable Baumgartner constructive reformation, 30 property trust as, 378–9 restitution, 29–30 equitable adjustments, 378 breach of fiduciary vindication, 30–1 equitable remedies and, obligations, 169–70 15–17 constructive trusts, unjust participants in breach of family. See family property enrichment and, 380–2 fiduciary obligation, future. See future property knowing assistance, 182–3 172–3 legal. See legal property knowing receipt, 178–9 Barnes v Addy, 173–4 non-contractual transfers of, promisory estoppel, third parties. See third party 386–8 constructive trust and, liability recovery through claiming, 380–2 participatory liability 339 remedies for breach of Baden scale of knowledge, specially enforceable confidence, 196 176–8, 181–2 contract transfers, 390–1 account of profits, 197 claims based on tracing, 183 transfer of. See assignments compensatory remedies, inducing a breach of trust, trust. See trust property 197–8 183 voluntary transfers of, injunctions, 197 trustee de son tort, 183–4 resulting trusts and, 363 miscellaneous orders, 198 penalties doctrine, 112–15 proportionate liability, 334 remedies for breach of trust, 330 perpetuity proportionate liability monetary. See monetary trusts and, 244–6 legislation, 334–5 remedies for breach of personal remedies, 27 proprietary estoppel, 122–5 trust compared to proprietary constructive trust as remedy non-monetary, 335–6 remedies, 28 for, 380–2 standing to sue, 336–7 power of appointment, 208 proprietary remedies, 10–11 rescission, 29, 94, 99–100 appointer, 209 compared to personal aim of, 70–1 bare, 208–9, 229–30 remedies, 28 at common law and equity, certainty and, 226 constructive trusts. See 71–2 donors, donees and objects, constructive trusts bars to, 75 209 equitable lien, 13–14 election to rescind, 72–3 general, 209–10, 225 public benefit meaning of, 70 hybrid, 210, 226 charitable trusts and, 256–7 partial, 72 non-fiduciaries, 209 public interest pecuniary, 75–6 special, 210, 225 defence to breach of proprietary consequences to, types of, 209–10 confidence, 192–3 74–5 prerequisites to award of public policy restoring parties to pre- specific performance trusts and, 241–2 contractual position, inadequacy of damages, 73–4 36–8 Quistclose trusts, 214, 221–3, total, 72 specifically enforceable 261, 365–7 voidable transactions, 70 contracts, 36 restitution, 29–30 valuable consideration, 36 rectification, 76, 94 restitution of property, 169 presumed resulting trusts common mistake, 76–7 resulting trusts, 216, 340, 354 purchase money resulting construction and, 78 application of presumptions trusts, 354 effect of, 78 to family property, 360–3 voluntary transfer resulting elements of, 76–8 arising on failure of express trusts, 354 unilateral mistake, 77 trust, 364–5 priority disputes and doctrine of reformation, 30 automatic, 354–5 notice, 126–7 relationships of influence compared to constructive private information, protection presumed, 102–3 trusts, 370–1 of, 193–4 proven, 103–4 difference to express trusts, property release 354 assessment of contribution, as equitable defence for history of development of, 377–8 breach of trust, 330 356–7

Index 397

resulting trusts (cont.) trustees’ right of indemnity trustees’ duties, 266 presumed, 354 and, 310–11 certainty of objects and, 231 presumption of third party liability, 173–4 duty to adhere to terms of advancement, 357–9 knowing assistance. See trust, 267–8 Quistclose trusts and, 365–7 knowing assistance duty to get in the assets, 268 recognition of in equity, knowing receipt. See duty to keep assets separate, 355–7 knowing receipt 269 voluntary transfers of tracing, 183, 339 entitlement information to property and, 363 as equitable requirement, benefactors, 270 341 information concerning the settlor, 205, 234 at equity, 340–1 trust, 271–3 sham trusts, 218–19 claims, defences to, 349–50 investment of trust funds. special disability, 106–7 distinguishable from See investment of trust exploitation of, 108 following and claiming, funds specific performance, 33, 94 339 keeping and rendereing assessment of equitable mixing money in a bank accounts, 269–70 damages in addition to, account, 341–9 sources of, 266–7 51 rules, variables relevant to, trustees’ duties of performance assessment of equitable 342 duty of care, 273 damages in subsitution transfer of property. See duty to act impartially, 274 for, 51–2 assignments duty to act personally, 275–7 bars to, 38 trust funds, investment of. See duty to consider exercise of correlation with injunctions investment of trust power, 277 to restrain breach of funds standard of care, 273–4 contract, 43–4 trust power, 208–9, 226 trustees’ fiduciary obligations, fairness to both parties, 33–4 administrative, 208 204 mutuality, 33 administrative unworkability, duty to act gratuitously, plaintiff’s remedy if denied, 229–30 278–9 48–9 capricious, 230–1 fair dealing rule, 279–80 prerequisites to award of. See criterion certainty test, 226, self-dealing rule, 279 prerequisites to award 227–9 winding up of a trust, 280–1 of specific performance discretionary trust, 227–8 trustees’ liabilities, 305 ‘ready and willing’ to execution of, 231–2 directors of trustee perform, 33–4 powers of appointment. See companies, 310 supervision. See supervision power of appointment trustees’ powers, 266, 281 standing trust property administrative, 281 award of a declaration and, beneficiaries and, 208 effect of improper exercise of 80 definition of express trust discretion, 286–8 statutory exculpation, 325 and, 203 exercise of, 281–6 general statutory defence, fixed trusts and, 227 Karger v Paul test, 285–6 326–8 misapplications, 64 review of, 286 wilful default, 326 trustees and, 305–6 sources of, 266–7, 281 subrogation, 18 trustee de son tort, 183–4 trustees’ right of indemnity, substantive fainess, 112–18 trustees, 205–6 305–6 supervision, 34 breach of trust and. See calculation of value of, 307–9 construction contracts, 34–5 breach of trust creditors’ rights and, 313–14 contracts for performance of constructive, 172–4 indemnification by personal services, 35–6 non-performing, removal of, beneficiaries, 311–13 207–8 out of trust assets, exclusion third parties right of indemnity. See by trust instruments, 309 as constructive trustees, trustees’ right of status of, 306 172–3 indemnity third parties and, 310–11 bars to relief and, 89–90 rights. See trustees’ rights trustees’ rights interests, role of public trust property and, 203 of contribution from interest, 46–7 305–6 co-trustees, 314–15

398 Index

of indemnity. See trustees’ half-secret, 239 rule in Yerkey v Jones and rights of indemnity immediate, intention to Garcia, 110–12 to impound beneficiary’s create, 220 special disability, 106–7 interest, 314 incompletely constituted, statutory unconscionability, to recover overpayment from 240 108–9 beneficiary, 315 intention to be proven, 219 unconscionability, 94, 100 to seek directions from court, inter vivos. See inter vivos constructive trusts and, 372 316–17 trusts undue influence, 94, 100–1 trusts lack of legal personality, actual, 101 administration of, 204 presumed, 101 beneficiaries and, 207 multiple purposes, 258 rebutting presumption of, advancement of purposes, non-charitable. See 104 203 non-charitable trusts relationships of influence. agency and, 210–11 non-consensual. See See relationships of bankruptcy and, 242–3 constructive trusts; influence capricious, 230–1 resulting trusts third parties and, 105 certainty of intention, 216–17 ‘non-exhaustive’, 208 unjust enrichment certainty of objects, 225–6 non-simultaneous constructive trust as certainty of subject-matter, declaration and vesting, restitutional remedy for, 224–5 240 380–2 certainty requirements, 216 objective intention or constructive trusts and, charitable. See charitable subjective intention, 371–2 trusts 217–18 conceptual and evidential obligation and, 203 vindication, 30–1 uncertainty and, 226–7 perpetuity and, 244–6 voidable transactions condition and, 211–12 precatory, 219–20 equity and, 99–100 constructive. See constructive public policy and, 241–2 rescission and, 70 trusts Quistclose, 214, 221–3, 261, contracts and, 212–13, 220–1 365–7 wills debt and, 213–14 resulting. See resulting trusts doctrine of incorporation by discretionary, 206–7, 226 secret, 238–9 reference, 238 discrimination and, 243–4 sham, 218–19 half-secret trusts, 239 distinguishable from gifts, 204 testamentary, 237–8 mutual, doctrine of, 388–90 elements of, 203 secret trusts, 238–9 enforceability, 203 unauthorised profits, 331 testamentary trusts, 237–8 equitable charge and, 211 unclean hands, 86–8, 168 writs express. See express trusts unconscientious conduct, 105–6 Chancery, 5–6 fixed, 206, 226–7 exploitation of special common law, 6 for non-charitable purposes. disability, 108 wrongdoing See non-charitable trusts knowledge of disability, 107 constructive trusts and, 372–3

Index 399