LLB220 Lecture Notes - Lecture 8: Consideration, Estoppel, Australia And New Zealand Banking Group
Week 8 – Introduction to Equity and Trusts
• Strict requirements provide certainty in commercial dealings BUT can create in-
justices e.g. intra-family transactions
Legal and Equitable Ownership
Historical Introduction
• Equity originally a separate system of jurisdiction – the courts of chancery
• Courts of common law would sometimes produce results seen as unjust
• Petitions made to the king for relief of the rules of common law – usually dealt with
by the chancellor (official of the court)
• By 15th century, chancellor was applying consistent rules re deciding on petitions
• Evolved into the courts of chancery → operated parallel to common law
• Courts of common law and courts of chancery co-existed for centuries
• Common law recognised overlapping interests in land – tenures and estates
• Common law protected rights over land but the person for whose benefit the
aageet as ade doest hae a iteest
• To iteests i lad eeges: the tustees o legal iteest ad the eefiias
euitale iteest
• The Statute of Uses 1535 deemed the beneficiary to be the legal owner. This was
then circumvented and the modern trust established
• Two distinct jurisdictional origins of property rights: common law and equity
Creation and Transfer of Interests in Land at Law
Deeds
• Inter vivos – Old system
• General rule → interests in land must be created and transferred by deed to be
effective at law (s 23B(1) Conveyancing Act)
- o assuae of lad shall e alid to pass a iteest at la uless ade a
deed
• Assuae iludes a oeae ad a dispositio ade otheise tha ill
• Deed of conveyance → formal document signed, sealed and delivered, intended to
be binding, transfer interests in land, the act of preparing and delivering conveys the
land (requirements in s 38(1))
- A document is sealed if there is a mark on it intended to be a seal
- In order for delivery to take place, the maker must show they intend the deed to
be immediately binding
- Doest hae to e haded oe
- Witness must not be a party to the deed
• Wills
- In writing, signed and two witnesses
- Succession Act 2006 (NSW)
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Torrens Land: Registration
• The heart of the Torrens system is registration
• ‘euieet fo deed doest appl to lad ude Torrens title → uses a
memorandum of transfer which must be registered
• Iteest doest pass util the siged, sealed ad delieed douets ae egisteed
• Uegisteed dealigs ude Toes sste aet effetie s Coeaig At
definition)
• Land and Titles Office
• Real Property Act 1900 s 41(1) – no dealing is effective unless registered
• BUT – deeds and registration are the means of passing legal interests. Still must
consider equitable interests
Legal Interests Created by Parol or by Conduct
• Leases that aet euied to e i itig ae eept fo the euieet the
must be a deed to be effective (s 23B(2)(d) CA)
• Leases for a period not exceeding 3 years, at a market rent, taking effect
immediately in possession, and without taking a fine, can be created orally (s 23D(2)
CA)
• Fine → lump-sum payment or premium
• Also not required to be in writing:
- Implied yearly tenancies at common law (s 127 CA)
- General periodic tenancies implied from the manner of payment of rent
• Interests acquired by taking possession are valid without documentation (s 23E(c))
• If they are conveyed at law, a deed must be used
Interests in Personalty
• Can be created without documentation
• Some choses in action e.g. shares, can only be transferred at law by registration
(1) No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or
interest in any land under the provisions of this Act, or to render such land liable as security for the payment
of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest
specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner
and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this
Act declared to be implied in instruments of a like nature.
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find more resources at oneclass.com
What is Equity?
• Overlay on the common law
• When the common law reached unjust results the courts of equity could step in and
intervene to offer own relief
• More flexible area of law that could encourage a more just result
• Rules not as rigid as common law
• Blackstone (1765):
- Fo sie i las all ases aot e foesee o epessed, it is eessa, that
when the general decrees of the law come to be applied to particular cases,
there should be somewhere a power vested of excepting those circumstances,
hih had the ee foesee the legislato hiself ould hae eepted
- Euit, i its tue ad geuie eaig, is the soul ad spiit of all la; positive
law is construed and rational law is made by it. In this, equity is synonymous with
justie i that, to the tue ad soud itepetatio of the ule
Criticisms of Equity
• Inconvenience and uncertainty od having to deal with two separate court systems
• Unpredictability of how the rules of equity were to be applied
- Peter John Selden (1689):
Equity is a roguish thing. For Law we have a measure, know what to trust to;
Equity is according to the conscience of him that is Chancellor, and as that is
larger or narrower, so is Equity. 'T is all one as if they should make the standard
for the measure we call a "foot" a Chancellor's foot; what an uncertain measure
would this be! One Chancellor has a long foot, another a short foot, a third an
indifferent foot. 'T is the same thing in the Chancellor's conscience
• Inconsistent results if you give a power to decide things based on a concept of justice
→ different people have different opinions on justice
• Tension between predictability and justice
Judicature Acts and Fusion
• In England, Judicature Acts (1873 & 1875) combined the courts
• NSW → courts combined in the Supreme Court Act 1970 – came into effect in 1972
→ single court but 2 procedures
• The Act did NOT fuse the law
• The fluial etapho
- Juisditio of oo la ad euit though the u i the sae hael,
u side side ad do ot igle thei ates Ashues Piiples of Euit
- Not maintained in all countries – Per Diplock in 1978 – if metaphor is retrained
the ates of the ofluet steas of la ad euit hae suel igled o
- NSW maintains distinction between law and equity re property
• Implications for property:
- Legal and equitable interests in property remain two distinct things in NSW
- One person can hold a legal interest in land in law and another person can hold it
in equity
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Week 8 introduction to equity and trusts: strict requirements provide certainty in commercial dealings but can create in- justices e. g. intra-family transactions. This was then circumvented and the modern trust established: two distinct jurisdictional origins of property rights: common law and equity. Creation and transfer of interests in land at law. Deeds: general rule interests in land must be created and transferred by deed to be. A document is sealed if there is a mark on it intended to be a seal. In order for delivery to take place, the maker must show they intend the deed to be immediately binding. Witness must not be a party to the deed: wills. Torrens land: registration: the heart of the torrens system is registration, e(cid:395)ui(cid:396)e(cid:373)e(cid:374)t fo(cid:396) deed does(cid:374)(cid:859)t appl(cid:455) to la(cid:374)d u(cid:374)de(cid:396) torrens title uses a memorandum of transfer which must be registered.
