Explanation of an Account for the Equitable Maxim Equity Will Not Assist a Volunteer - Term Paper Example

A, Critically explain an account for the equitable maxim "equity will not assist a volunteer" and B, Critically explain an account for the differences between equitable and common law remedies. Introduction Although it is the generally held maxim that ‘equity will not assist a volunteer’ there are occasions when the courts have ruled that exceptions to this rule will apply. The courts have frequently refused to allow equity to perfect an imperfect gift. This essay will consider those exceptions as well as those cases where they have refused such an application. The starting point is to examine the exceptions. In order to be able to make comment as to the evenness of the application comparison will be made with the occasions when the courts have refused to accept such applications The principle of donatio mortis causa A donatio mortis causa is where property is transferred to another in expectation that the maker will be dying soon after the item has been transferred. The transfer is conditional that the death is imminent. Such a gift is effective form the moment it has been made subject to the death of the testator soon after making the bequest. The gift is classed as an inter vivos gift such that if the testator does not die as expected the gift will be revoked. Blackstone talks of donatio mortis causa as occurring when a person ‘in his last sickness, apprehending his dissolution near, delivers or causes to be delivered to another the possession of any personal goods to keep in case of his decease’. Swinburne identifies 3 types of donatio mortis causa, these being a gift in anticipation of death, a gift moved by imminent danger which takes effect immediately and a gift where a person in peril of death gives something to the donee that only becomes the property of the donee if the donor dies. The Lord Chancellor disagreed with this stating that only the first of these was a donatio mortis causa. The Lord Chancellor made the comment that the second type would be an inter vivos gift whilst the third type would be a testamentary disposition. In Cain v Moon1 Lord Russell stated ‘for an effectual donatio mortis causa three things must combine: first, the gift or donation must have been made in contemplation, though not necessarily in expectation, of death; secondly, there must have been delivery to the donee of the subject-matter of the gift; and, thirdly, the gift must be made under such circumstances as shew that the thing is to revert to the donor in case he should recover’ As a result of cases such as Sen v. Headley2 the courts have adopted a different approach to the application of donatio mortis causa. The new conditions require that the gift was made in contemplation of death, rather than expectation; that the gift is made subject to the condition that it will only become indefeasible upon the death of the donor; and that the gift must be delivered to the donee or in the case of property access to the property must be transferred to the donee. It is the responsibility of the donee to prove the requirements of the donatio mortis causa on the balance of probabilities. The courts do not require corroboration, however the courts will scrutinise claims closely to avoid claims that the testator had been coerced into making the gift. The impact of a donatio mortis causa is that a volunteer or donee might be able to enforce the gift. In general the courts of equity will enforce such actions which essentially go against the maxim. Fully constituted trusts and resulting trusts. A fully constituted trust occurs when all three certainties are present. Fully constituted trusts can be enforced by a volunteer as was the case in Fletcher v Fletcher. In this case the court had to decide whether the trust had been fully constituted in order to be able to rule that the trust was valid. In this case the court found that the settlor’s covenant to create the trust was sufficient to hold that the trust had been fully constituted. Resulting trusts can be upheld by a volunteer. A resulting trust occurs where the person seeking the benefit of the trust has contributed financially towards the purchase of the property in question. Resulting trusts were raised in Tinsley v Milligan3 where the courts had to decide whether the plaintiff was entitled to claim an equitable interest despite the fact that she had acted illegally. The courts usually operate on the maxim of insisting that a person seeking equity must come with clean hands. In this case the court was able to assist the plaintiff despite her illegal action. This was achieved because the plaintiff did not need to rely on their illegal conduct to establish title. Constructive trusts A further area where the courts might assist is in the area of constructive trusts. A constructive or implied trust can be inferred where the plaintiff has paid money into the property for repairs or maintenance4. The essence of a constructive or implied trust is that the person not named on the register has been led to believe that when they set up home together the property will be jointly owned5. When deciding whether such a trust has been created the courts must find on the basis of express discussions, that the parties had come to an agreement or arrangement that they would acquire an equitable interest6. It is not always necessary for the party seeking the equitable interest to have put any monies into the property at all7. Case law has recognised that contributions to the running of the household, repairs in the property, and money expended on household bills are sufficient to establish an equitable interest. The principle of Strong v Bird In the case of Strong v Bird8 the court established that equitable discretion will be refused in certain circumstances. In this case the executor of the estate owed the testator money. Under common law the debt would be cancelled when the testator dies otherwise the executor would have to sue himself for the debt. In some later decisions the court made the executor responsible for the debt to the estate despite the executor having to sue himself. In the case of Strong the court held that it had always been the intention of the testator to cancel the debt upon his death and allowed the debt to be cancelled. Third parties rights to enforce the trust Under the Contract (rights of Third Parties) Act 1999 a third party who is a volunteer to a contract has the right to enforce the performance of the contract. Such enforcement can occur only when the contract was made expressly or impliedly for the benefit of the third party. Effectively the volunteer is treated as though he is a party to the agreement and entitled him to the dame remedy as the party to the agreement. In Cannon v Hartley9 the volunteer was able to successfully sue for damages for breach of contract. Where damages are inappropriate and specific performance is more appropriate the court will order specific performance10 Equitable remedies and common law remedies Equitable remedies are discretionary. Under common law the claimant will be entitled to the remedy as a right whereas with an equitable remedy the claimant is reliant on the court deciding in their favour. The courts will take into account any unreasonable delay in bringing the action as well as the conscience of the claimant. As mentioned above with resulting trusts the courts are free to hold that the plaintiff should not succeed if they have not acted equitably. There are settled principles under which equitable remedies are decided, however such remedies are generally only available where there is no adequate common law remedy. Such remedies will only be granted where the court is able to ensure that the remedies will be observed. In the case of Jones v Lipman [1962] the defendant had entered into a contract to sell land to the plaintiff. When the defendant changed his mind and sold the land to another company that he had control of and which he had acquired solely for that purpose the court still ordered specific performance. Their decision was based on the fact that the defendant still officially had the land under his control under a different company name and therefore was still able to perform on the contract. Failing to act swiftly could also prevent a plaintiff from asserting his equitable rights11. Where the division of property is not clear equity dictates that the property is divided in equal shares12. When making equitable decisions the court will look to the intent of the parties and will regard that as done that which ought to have been done13. There is an imputed intention in equity to fulfill obligations14. Decisions made on the basis of equity are in personam which enforces decisions by means of a personal order against the defendant15. The types of equitable remedies that can be awarded include injunctions, specific performance, rectification and rescission. With an injunction the courts can either stop the party from doing something or require them to do something16. An order of specific performance requires one of the parties to complete their part of the contract. Usually awards of this kind relate to specific articles such as land and will not be awarded where the court cannot supervise the operation of the order17. Rectification is concerned with the alteration of contractual documents18. An order for rescission is issued with the intent of returning the parties in a contractual agreement to the position they were in before having entered into the agreement. In an award for damages the intention of the court is to put the parties in the place they would have been in had the contract been completed. Although equitable remedies are awarded without reliance on legislation there are many ways in which equitable remedies mirror common law remedies. Under common law the aim is to compensate the plaintiff for any financial loss tat they have incurred. Under equity monetary compensation may not be appropriate. An injunction may prevent a future monetary loss. An example of this would be an injunction preventing someone from building a factory on land adjacent to the plaintiff. If the factory is allowed to be built the knock on effect could result in a depreciation of the value of the property of the plaintiff19. Similarly an injunction against a trustee preventing him from dealing with the assets of the trust in a certain way might prevent the beneficiaries from a financial loss20. Equitable remedies may prevent the need for a future claim under common law. This would be the case with an injunction. Similarly an order for specific performance could prevent a claim in the future21. Frequently the plaintiff would prefer that the contract was carried out rather than be awarded damages for non performance22. This could be the case where the order of specific performance centres on building work. Although damages would compensate the plaintiff he would still need to employ someone else to complete the contract. equitable remedies are not totally incompatible with common law remedies. One of the common aims is a restoration of natural justice either by monetary compensation, where no other method would suffice, or by equitable remedies or occasionally by both. Conclusion The conclusion can therefore be drawn that equity and common law remedies are working together to establish natural justice for the plaintiff and that although they have different remedies for achieving that aim the end result is that the plaintiff has a greater chance of getting the award best suited to their situation. On occasions it may seem that they are working against each other. This might be the case in trust law where the equitable interests supersede that of the trustees. This is more likely in constructive trusts created by mutual wills. In these cases the survivor might only have a life interest in the property as they have agreed in the mutual will to hold the property on trust for the beneficiaries23. However, if equity did not intervene then the surviving testator could alter their will upon the death of their partner and disinherit the beneficiaries that the testator specifically wanted to inherit24. With regard to the equity assisting volunteers, it is clear from the above that there are occasions where the courts will assist volunteers. This demonstrates the inconsistency with the application of equity in the courts. Bibliography Ashburner, W, Principles of Equity, 2nd Ed, 1933, Butterworths Cockburn, T, Harris, W, & Shirley, M, Equity & Trusts, 2005,Butterworths Hayton, D J , Commentary and Cases on The Law of Trusts and equitable Remedies, 11th Ed, 2001, Sweet & Maxwell Holdsworth, W, History of English Law, 7th Ed, 1956, Mathuen & Co Ltd Pearce, R & Stevens, J, The Law of Trusts and Equitable Obligations, 2nd Ed, 1998, Butterworths Slapper, G & Kelly, D, The English Legal System, 4th Ed, 1999, Cavendish Publishing Ltd Thomas, M, Statutes on Property Law, 8th Ed, 2001, Blackstone’s Read More