LAW 1506 Lecture Notes - Lecture 5: Equitable Interest, Equitable Remedy, Supreme Court Act
23 May 2018
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GAINING AN EQUITABLE INTEREST
Equitable rights
1. Equity and common law are fused s 28 Supreme Court Act 1935 (SA) (no longer administered
through court of chancery)
2. an equitable right is a relationship between persons in regard to the land in question, and is a
right in personam. The property right exists wherever, and because, equity will protect the
conscience inherent in the relationship by giving a specific remedy to be carried out on or in
relation to the land in issue.
A. looks to circumstances/ (un)conscionability to determine what ought to have been done.
CREATION OF EQUITABLE RIGHTS
1. The creation of trusts in land
A. Being a beneficiary; or
B. having the beneficiary mortgage their share-creating an equitable mortgage
2. Equitable interests and estates: The formation of contracts where those contracts concern one
of the already existing rights in land (mortgage/lease/ fee simple)
A. Part-performance
3. The occurrence of equitable fraud
Trusts
START: note any legal interests and split them from the equitable
1. Creation/ transfer of estate/ interest must be in a DEED or in a WILL (witnessed properly) unless
a short term or periodic lease (statute of frauds 1677; s 29 LPA)
A. If in a deed/ will- may be an express trust
B. If not in a deed or will- cannot rely on statue to commit fraud/ behave unconscionably- hence
may impose a resulting and constructive trust
2. Express trusts - Private or public purposes
A. Three certainties must be clearly present for a trust to exist (if one fails- may found an
automatic trust)
i. Objects: persons (who is the trust for?); or purposes (what is the trust for? Must be
charitable)
ii. Subject matter (what is the property? land/ money)
iii. Intention (unequivocal declaration by settlor that they intend legal title to be held on trust
for someone else- or is it a gift)
B. Creation: comply with special statutory formalities to
i. Declaration: declare yourself trustee recognise that you have bare legal title and someone
else is beneficiary; or
ii. Assignment: Transfer property to a third party to hold on trust for beneficiary
C. Rights conferred
i. beneficiary has proprietary (equitable) interest, and rights against the trustee;
ii. Trustee Act 1936(SA) gives trustees powers, duties, rules re replacement/ investment of
capital to ensure property is kept for the benefit of the other party
3. Resulting trusts
A. Automatic or presumed
i. Automatic- arise when express trust fails (ie because purpose cannot be carried out; or
because does not comply with s s 29 LPA (in a valid deed or will)
ii. Presumed- most common - from intentions, where no other legal explanation for the
transfer (eg: not a gift)
B. Nature: 'results' means 'returns' to provider/ transferor. A trust results to provider of purchase
of money Dyer v Dyer
i. imposed by courts based on the presumption that the parties intended to create a trust.
Arises where there are unequal contributions to the purchase price
C. where two or more persons contribute to the purchase of property which is conveyed to them
in their joint names, the equitable presumption is that they hold the legal estate in trust for
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Subject matter (what is the property? land/ money) Presumed- most common - from intentions, where no other legal explanation for the transfer (eg: not a gift: nature: "results" means "returns" to provider/ transferor. A trust results to provider of purchase of money dyer v dyer imposed by courts based on the presumption that the parties intended to create a trust. Rebut by express intention not to be a gift. Extended from transfers from mother to child in nelson: presumption rebutted if transfer was to avoid tax (practical consequence = need to pay tax: constructive trusts, institutional or remedial - see remedies below. Institutional where court declares trust arises by law as natural consequence of a relationship, eg breach of trust, contract for sale of land, taking bribes. Baumgartner constructive trust may be imposed irrespective of the parties" intentions to create a trust.
