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Advanced Equity and Trusts ADVANCED EQUITY AND TRUSTS University of London LLM The course is led by: Professor Alastair Hudson Professor of Equity & Law Department of Law, Queen Mary, University of London 2006/2007 1 www.alastairhudson.com | © professor alastair hudson Advanced Equity and Trusts Law Introduction This course intends to focus on aspects of equity and trusts in two specific contexts: commerce and the home. It will advance novel conceptual approaches to two significant arenas in which equitable doctrines like the trust are deployed. In the context of commercial activity the course will consider the manner in which discretionary equitable doctrines are avoided but also the significant role which the law of trusts plays nevertheless in commercial and financial activity. In the context of the home to consider the various legal norms which coalesce in the treatment of the home: whether in equitable estoppel, trusts implied by law, family law, human rights law and housing law. Teaching Organised over three terms, 2 hours per week, comprising a lecture in the first week followed, generally, by a seminar in the following week as a cycle. See, however, the three introductory topics which are dealt with differently. Examination / assessment Examination will be by one open-book examination which will ask students to attempt three questions in three hours. Textbooks It is suggested that you acquire a textbook and you may find it useful to acquire a cases and materials book, particularly if you have not studied English law before. Recommended general text:- *Alastair Hudson: Equity and Trusts (4th ed.: Cavendish Publishing 2005). Other textbooks:- Hanbury and Martin: Modern Equity (17th ed., by Dr J. Martin: Sweet & Maxwell 2005). Parker and Mellows: The Modern Law of Trusts (8th ed., by A.J. Oakley: Sweet & Maxwell 2003). Pettit: Equity and the Law of Trusts (10th ed.: OUP 2005). Introductory reading *Hudson, Understanding Equity and Trusts ((2nd ed, Cavendish, 2004) this book will be particularly useful for students who have not studied trusts law before. Cases and materials books which may be of use or save time in the library:- Maudsley and Burn: Trusts and Trustees: Cases and Materials (6th ed.: Butterworths 2002). Hayton and Marshall: Cases and Commentary on the Law of Trusts (12th ed., by D. Hayton and C. Mitchell: Sweet & Maxwell 2005). Moffat: Trusts Law: Text and Materials (4th ed.: reprinted CUP 2005). Practitioners' texts *Thomas and Hudson, The Law of Trusts (1st ed., Oxford University Press, 2004, 1,907pp): the newest practitioner text in England which not only considers the basic principles of trusts law but also puts them in the context of particular uses of trusts in practice. Underhill and Hayton, Law Relating to Trusts and Trustees (16th ed., by D. Hayton: Butterworths 2002). Lewin on Trusts (17th ed., by Mowbray, et al: Sweet & Maxwell, 2000). 2 www.alastairhudson.com | © professor alastair hudson Syllabus Aims and objectives This course considers the topic of Equity & Trusts in two ways: first, it considers the practical application of trusts law principles to commercial and non-commercial contexts; second, it considers the intellectual issues which are bound up with equity and with trusts law. This course considers issues such as the place of equity within legal theory, the nature of property in law, the inter-action of commercial law and trusts law, the stuttering development of unjust enrichment, and the particular context of the home as considered by equity, trusts law, family law and legal theory. Course outline Topic 1*. Core principles of equity and the law of trusts Topic 2*. Foundational techniques of express trusts (1 & 2) Topic 3*. Themes in equity & trusts Topic 4. Obligations of trustees (i): control of trustees & breach of trust Topic 5. Obligations of trustees (ii): investment of trusts Topic 6. Equity and commerce (1): suspicion of equity, taking security & contract Topic 7. Equity and commerce (2): finance, trusts and the local authority swaps cases Topic 8. Constructive trusts (i): secret profits and bribes Topic 9. Constructive trusts (ii): fraud, contract and confidentiality Topic 10. Breach of trust (i): dishonest assistance and knowing receipt Topic 11. Breach of trust (ii): tracing Topic 12. Trusts of homes (i): English trusts law approaches Topic 13. Trusts of homes (ii): Commonwealth and remedial approaches Topic 14. Trusts of homes (iii): Other perspectives on rights in the home {Topic 15. Equitable remedies and the nature for equity} *Due to the nature of the LLM – and the movement of people through various courses until the group eventually settles down – these initial topics will be covered for one week only principally in the form of lectures. These topics are intended (a) to introduce people who have not studied trusts before to the core principles, as well as refreshing the memories of those who have studied trusts before, and (b) to introduce students to some of the key intellectual debates which will form the subject matter of the course. Each of these sessions will have space for discussion. Thereafter, each topic will be covered by a lecture in the first week followed by a seminar on the same topic in the second week. 3 www.alastairhudson.com | © professor alastair hudson Timetable for the course This course outline sets out the sequence of lectures in this topic. Students should be warned, however, that it is susceptible to minor change as the year progresses. It also contains lecture notes and the outline questions for seminars. Week: w/c Topic: lecture / seminar 2 / 10 Core principles of equity and the law of trusts 9 / 10 Foundational techniques of express trusts (1) 16 / 10 Foundational techniques of express trusts (2) 23 / 10 Themes in equity and trusts 30 / 10 Obligations of trustees (i): control of trustees & breach of trust 6 / 11 No class this week 13 / 11 Obligations of trustees (i): control of trustees & breach of trust 20 / 11 Obligations of trustees (ii): investment of trusts 27 / 11 Obligations of trustees (ii): investment of trusts 4 / 12 Equity and commerce (1): suspicion of equity, taking security & contract 11 / 12 Term End Equity and commerce (1): suspicion of equity, taking security & contract 8 / 1 Equity and commerce (2): finance, trusts and the local authority swaps cases 15 / 1 Equity and commerce (2): finance, trusts and the local authority swaps cases 22 / 1 Constructive trusts (i): secret profits and bribes 29 / 1 No class this week 5 / 2 Constructive trusts (i): secret profits and bribes 12 / 2 Constructive trusts (ii): fraud, contract and confidentiality 19 / 2 Constructive trusts (ii): fraud, contract and confidentiality 26 / 2 Breach of trust (i): dishonest assistance and knowing receipt 5 / 3 Breach of trust (i): dishonest assistance and knowing receipt 12 / 3 Breach of trust (ii): tracing 19 / 3 Breach of trust (ii): tracing 26 / 3 Term End Trusts of homes (i): English trusts law approaches 30 / 4 Trusts of homes (i): English trusts law approaches 7 / 5 Trusts of homes (ii): Other perspectives on rights in the home 14 / 5 Trusts of homes (ii): Other perspectives on rights in the home 21 / 5 4 www.alastairhudson.com | © professor alastair hudson TOPIC 1. THE FOUNDATIONS OF EQUITY AND THE LAW OF TRUSTS Aim: This topic is concerned to introduce students to the core principles which underpin equity in general terms and the law of trusts in particular. The difficulty with beginning this LLM course is that there are usually two types of student: those who studied trusts law at undergraduate level and those who never studied trusts law at all before. Therefore, the first three topics of this course aim to teach the basics to novices and to serve as a refresher course for the initiated. LECTURE MATERIALS (A) The nature of equity Reading: Hudson, section 1.1 1) Philosophical ideas of equity The following ideas come from Aristotle’s Ethics, and should be understood as considering the difference between common law and equity: “For equity, though superior to justice, is still just … justice and equity coincide, and although both are good, equity is superior. What causes the difficulty is the fact that equity is just, but not what is legally just: it is a rectification of legal justice.” So it is that equity provides for a better form of justice than the common law because it provides for a more specific judgment as to right and wrong in individual cases which rectifies any errors of fairness which the common law would otherwise have made: “The explanation of this is that all law is universal, and there are some things about which it is not possible to pronounce rightly in general terms; therefore in cases where it is necessary to make a general pronouncement, but impossible to do so rightly, the law takes account of the majority of cases, though not unaware that in this way errors are made. … So when the law states a general rule, and a case arises under this that is exceptional, then it is right, where the legislator owing to the generality of his language has erred in not covering that case, to correct the omission by a ruling such as the legislator himself would have given if he had been present there, and as he would have enacted if he had been aware of the circumstances.” Thus, equity exists to rectify what would otherwise be errors in the application of the common law to factual situations in which the judges who developed common law principles or the legislators who passed statutes could not have intended. 2) Early case law on the role of equity Earl of Oxford’s
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