Law of Trust and the Property Law - Essay Example

 “He is the beneficiary of a generous trust set up by his father” his condition or obligation of one to whom anything is confided; responsible charge or office.” We can summarize the term trust in this manner and also we can say that this is the general rule on which the law of trust proceeds on. But the law modifies this rule according to the circumstances.For e.g.; Doctrine of estoppel, constructive trust etc. This is not firm rule that the claims under these waiving principles always succeed. If trust is the transference of the right over the property to the person, equity is creating proprietary interest in that property .Law of Trust and equity embedded with some rights and obligations regarding trust and equity. Now we shall analyze the scope of doctrine of estoppel on which Mr. Dinnock relies for his claim and constructive trust by which he can have benefit by law. For this, firstly we shall explore the meaning of these terms. Constructive trust, The sec. 14 of the Trusts of Land and Appointment of Trustees Act 1996 lays down that the court has power, not only to make an order as to the trustees functions but also to make an order declaring ‘the nature or extent of a person’s interest in property subject to the trust’. This is emphasized in the case Crossley v. Crossley (1) later. Here the scope and applicability of constructive trust arises. A constructive trust arises when a person has title to property and or takes possession of it under circumstances in which he/she is holding it for another, even though there is no formal trust document or agreement. The court may determine that the holder of the title holds it as constructive trustee for the benefit of the intended owner. It is to be remembered that this may occur through fraud, breach of faith, ignorance or ------------------------------------------------------------------------------------------------------------ 1. Crossley v. Crossley [2005] EWCA Civ 1581 2 inadvertence. (2)A constructive trust comes into existence, regardless of any party’s intent, when the law imposes upon a party an obligation to holds specific property for another. The person obligated becomes by force of law a constructive trustee towards the person to whom he owes performance of the obligation. We can termed it as Fiduciary Duties. (3) Fiduciary Duties where a person who has undertaken to act for or on behalf of another in particular manner in circumstances which give rise to a relationship of trust and confidence. In this regard, in Bristol and West Building Society V Mathew (4) it was described that a servant who loyally does his incompetent best for his master is not unfaithful and not guilty of a breach of fiduciary duty, but may be guilty of a breach of a duty of care. A constructive trust is always imposed by law. When the court makes a declaration of a constructive trust, it creates an enforceable interest in real or personal property.(5) In Hussey v Palmer (6) Lord Dennings described a constructive trust as “by whatever name it is described, it is a trust imposed by law whenever justice and good conscience require it. It is a liberal process, founded upon large principles of equity, to be applied in cases where the defendant cannot conscientiously keep the property for himself alone, but ought to allow another to have the property or a share in it. It is an equitable remedy where the court can enable an aggrieved party to obtain restitution”. From above definitions it can be seen that the principle of “unjust enrichment” and “fiduciary duties” can not be disregarded whenever the scope of constructive trust speaks. ------------------------------------------------------------------------------------------------------------ 2. Lionel Smith, Constructive Trusts and Constructive Trustees (1999), Cambridge Law Journal, 58: 294-302 Cambridge University Press 3. Rafael Chodos, the Law of Fiduciary Duties, Publisher: Blackthorne Legal Press , April 1, 2001, ISBN-10: 0970404204 4. Bristol and West Building Society V Mathew [1996] 4 All ER 698, 711 5. ibid 2 6. Hussey v Palmer (1972) 3 All E.R. 70 (CA)( 3 “Common intention” is another element of constructive trust. The scope of this element is related to the sec. 4 of Trusts of Land and Appointment of Trustees Act 1996 which is given above. The decision in Crossley v. Crossley (6) illustrates that common intention in constructive trust as where the parties have reached a consensus on the beneficial interests in the property, the court will give effect to it, unless there is very good reason for not doing so, such as subsequent renegotiation. Further in Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd (7) the judge had opined that if there is no such common intention, then detrimental reliance, did not have to be considered. In the light of the above discussions, we shall analyze the position of Mr. Dinnock in the given case. Mr. Dinnock not only looked after the property of Mr. Tidymarsh but also he was all in all in taking care of him till his death. This fact renders him to put forward a strong claim for the proprietary interests in the said property. Moreover the law always given due consideration for those who act on justice and good conscience acting without fraud and there is no formal trust document or agreement. In other way we can say that Mr. Dinnock is engaged in some kind of duty which is in fiduciary nature, through which he gain a relationship which end in trust and confidence. Apart from this, Mr. Tidy marsh intimated Mr. Dinnock that the house and other properties will be left on him. It shows that there is a common intention involved between the parties here. Under such circumstance Mr. Dinnock has almost every opportunity to claim the title of the property. But here Mr. Dinnock should aware some other points which may have taken by the court on the allegation of real inherit ants. 1. Unjust enrichment (8) which is a legal procedure whereby the court can seek ------------------------------------------------------------------------------------------------------------ 6. Crossley v. Crossley [2005] EWCA Civ 1581 7. Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd. [2005] EWCA Civ 1355 8. Anguilla, D, John (2007) Trusts & Trustee Volume 13, Number 8 Published by Oxford University Press 4 reimbursement from whom benefited from actual owner’s action or property without legal justification. i.e where a constructive trust may raise for the benefit of a person who paid an undue amount of money to another; that person who received the money will be regarded as a trustee detaining that money for the benefit of the one who paid it. This is explained in the case Chase Manhattan Bank v Israel British Bank.(9) If the legal representatives of Mr. Tidy marsh proved that Mr. Dinnock has benefited from this particular property, then it can be said that he has enriched unjustly and same may constitutes valid allegation against Mr. Dinnock. 2. Quantum Meruit (10) which means the amount he deserves" or "what the job is worth". In nutshell, quantum merit claims are based on the law of restitution; specifically, quantum merit claims flow from the principle of unjust enrichment. It is an equitable doctrine, based on the concept that no one who benefits by the labor and materials of another should be unjustly enriched thereby. The law implies a promise to pay a reasonable amount for the labor and materials furnished, even absent a specific contract. So here, Mr. Dinnock can have a claim on the potency of constructive trust, at the same time the scope and applicability of unjust enrichment and quantum merit should be kept in mind. Now we shall discuss the major ground on which Mr. Dinnock move up his claim for the property of Mr. Tidy marsh. Doctrine of estoppel , Unconsciousability(11) The fundamental principles that equity is concerned to prevent unconscionable conduct pervade all the elements of the doctrine of estoppel. The principle lays down that ------------------------------------------------------------------------------------------------------------ 9. Chase Manhattan Bank v Israel British Bank.(9) 10. ibid 8 11. Mark Pawlowski, Estoppel, constructive trust and unconsciousability, Trust and trustees, 2006, Vol. 12, No 9 ,Published by Oxford University Press 5 it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment than to enquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick of unconscionable behavior. A party who seeks to set up an estoppel, whether a proprietary estoppel, estoppel by acquiescence or estoppel by encouragement, must establish that it would be unconscionable for the other party to be permitted to deny what he has allowed or encouraged the first party to assume to his detriment. (12) In the famous case Thorner v Curtis (13) the question regarding the unconscionability founded on an expectation, reliance and detriment raised. The question has arisen on the effect of a revocation of an expectation that property will be left in a will. In other words, what is the effect on estoppel where the person making an assurance says that he or she will leave the property in a will but then fails to do so. Here the challengeable ground was the negation of claim for estoppel in such a situation Previously in Taylor v Dickens (14) a promise was made by an elderly lady that she would leave her property to her gardener in her will. The gardener then offered to work for the lady without any remuneration. The lady duly made a will in which she left the property to the gardener and his wife, however, later on revoked that will without telling the couple. The elderly lady died having left her property to someone else. When the gardener bought an action for estoppel against the lady’s estate, the court rejected it on the grounds that what the lady had promised was that she would make a will and leave the property to him and not that she would not subsequently revoke it. The fact that she had made the will was sufficient to fulfill the expectation that she had created. ------------------------------------------------------------------------------------------------------------ 12. Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 13. Thorner v Curtis [2007] EWHC 2422 (Ch) 14. Taylor v Dickens [1998] 1 F.L.R. 806 6 But this view was rejected in the later case Gillett v Holt (15) in which it was held that there was no requirement that there must some binding agreement not to revoke the will. It was sufficient that there was some clear understanding that the property would be left the person claiming the estoppel. Relying on these decisions in to Thorner v Curtis it was held that when the expectation became clear to party, he began to put in a lot of hard unpaid work on the farm. This labor continued for a period of some 14 years. In the process, and as a result of the expectation, the party continued to live near died rather than pursue some of the opportunities that presented themselves to him. In light of these findings, here, and the necessary degree of unconscionably required for a finding of estoppel had been proved. It was further held that it would be grossly unconscionable to deny the party a right to the farm by allowing the intestacy rules to stand. If we apply this rules and decision s in the given case, it can be said that Mr. Dinnock had acted more reliable only after the intimation from Mr. Tidy marsh regarding leaving over the property on him. Here Mr. Dinnock can apply the aspect of unconscious ability for his defense. Moreover he had spent 27 years with Mr. Tidy marsh by looking after him. This fact can not be denied. Under such circumstance, the Mr. Dinnock has valid ground to put forward a claim on the prperties of Mr. Tidy marsh. Conclusion Law of trust and equity form an innovative mechanism enabling new solutions to be provided in respect of the problems set out elsewhere in this type of dispute, whether it is related to proprietary interests or general. Whatever it is the property law should ensure the certainty in property disputes, the informal entitlement to property through proprietary estoppel, to avoid unconscious ability that may arise in individual cases, thereby obtain a balance between certainties in property entitlement through compliance with form as well justice in individual cases. *************************** Bibliography Books and Authors 1. Anguilla, D, John (2007), Trusts & Trustee Volume 13, Number 8 Published by Oxford University Press 2. Rafael Chodos, the Law of Fiduciary Duties, Publisher: Blackthorne Legal Press , April 1, 2001, ISBN-10: 0970404204 3. Underhill & Hayton, Law Relating to Trusts and Trustees (14th ed., 1987), p. 586 Pettit, Equity and The Law of Trusts (5th ed., 1984), p. 331. Snell's Principles of Equity (28th ed., 1982), p. 234.) Journals and Publications 4. Lionel Smith, Constructive Trusts and Constructive Trustees (1999), Cambridge Law Journal, 58: 294-302 Cambridge University Press 5. Mark Pawlowski, Estoppel, constructive trust and unconsciousability, Trust and trustees, 2006, Vol. 12, No 9, Published by Oxford University Press Table of cases 1. Bristol and West Building Society V Mathew [1996] 4 All ER 698, 711 2. Chase Manhattan Bank v Israel British Bank [1981] Ch. 105 3. Crossley v. Crossley [2005] EWCA Civ 1581 4. Gillett v Holt (15) [2001] Ch. 210 5. Hussey v Palmer (1972) 3 All E.R. 70 (CA) 6. Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd. [2005] EWCA Civ 1355 7. Taylor v Dickens [1998] 1 F.L.R. 806 8. Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 9. Thorner v Curtis [2007] EWHC 2422 (Ch) Read More