Equity and Transfer of Property - Term Paper Example

1 A typical legal case to demonstrate the similarities and differences between the outright transfers of property and the creation of trust is Glencore International A.G. v Metro Trading International Inc & Ors [2001] EWHC 490 (Comm) (01 August 2001). This case is an authority in the area of property transfers because it is concerned about the expected transfers of title to oil held by Metro Trading International Inc, but which MTII held in its storage at an offshore facility in Fujairah till MTII collapse in 1988. The case is drawn on the premise that Glencore International A.G. and its associates sued MTII to claim their title to oil, which had remained in MTII’s storage facility long after its collapse. This legal case is important for this task because it reveals the applications of the Common Law and other interrelated laws that are necessary in the maintenance of equality in the transfers of the oil title which Glencore International A.G. and its associates lay claim to based on the previous transactions between MTII and the companies involved in this litigation. Although, MTII does not reveal any intricate procedure for maintaining equitable interests in the title to oil it holds on behalf of other companies, there could be a case here for the creation of “trust” from which all other companies can financially gain from. Based on this important observation, the differences and similarities in the transfers of property and the creation of trust can be highlighted bearing in mind that the, (i) the laws applied in the case attempts to establish the doctrine of equities and equitable interests of all the parties involved in the deal; (ii) it is not “sufficiently certain” that MTII has any 2 directives to turn the title to oil it holds into any form of “trust property” that could be accessed by all parties. These issues make this case one of strategic interest. 2. These are three other key cases that could be used to establish “authority” in the areas of outright property transfers and the creation of trust. In Jackson & Ors v Thakrar & Ors [2007] EWHC 2173 (TCC) (10 October 2007), the Thakrar & Ors were suing for their shares in the property managed by Jackson & Ors, who had helped to undertake the accounting procedures of the trust company but failed to supervise the outright transfers of the shares to Thakrar & Ors. In JD Wetherspoon Plc v Van De Berg & Co Ltd & Ors [2009] EWHC 639 (Ch) (31 March 2009), JD Wetherspoon was suing for the property (stock) held by the defendants and were not equitably transferred before one of the defendants collapsed in May, 2008. In Agip (Africa) Ltd. v Kingsley & Ors [1990] EWCA Civ 2 (21 December 1990), Agip sued for the return or transfer of its financial property that was fraudulently acquired by a former employee, forcing the companies that participated in the process to be held responsible for this act, which legally contravenes the laws of equity. These three cases are able to show how important the doctrine or principle of equities is, and how they could be applied in court cases to assure that none of the parties is disadvantaged during the transactions or thereafter. 3. Using secondary sources like a journal and a textbook, I noticed that it is important to understand that when one or more members of a group or party have been exposed to some disadvantages in the process of property transfers, such an action 3 has undermined the principle of equity, which requires that every member or part of a group should be accorded similar considerations without breaking any law or order (Raff, 2006; Nygaard et al., 2007). Every property is recognized as having an owner at a particular period of time, and this legal title of this property belongs to the owner who may want to sell or transfer the title to another person (Raff, 2006; Nygaard et al., 2007). For this to occur, there must be transactional agreements among the parties. Hence, these agreements are guided by laws and statutes of the jurisdictions where the agreements took place to forestall any possibility of unequal interpretation of the laws (Raff, 2006). Therefore, equity guarantees that every member of a group will:- (i) be treated equally and with the due respect; (ii) be weighed based on their actions with accordance to the Common Law and any other law that guides his or her action in any transactional agreement; (iii) be protected from any cheating and be equally considered within the group irrespective of the statuses of the other members of the group; (iv) be attended to speedily so that unnecessary delay in the legal proceedings would not hamper the delivery of the appropriate judgment (Raff, 2006). Looking at the cases cited above, some of the parties involved in legal agreements were left out or their equitable interests in the property were defeated or undermined. Equity stands to challenge this kind of discrepancies that may occur as a result of the perversion of judgment owing to the unequal interpretation of the legal structures that bind the legal agreements. The principle of equity has received the most consideration in the 4 twenty-first century because of the complex nature of transactions or business interactions among people of different origins. In order to perpetuate a culture of legal responsibility in a particular jurisdiction, it is mandatory that efforts must be made to highlight the importance of equity, inculcate its principles in the minds of the people and encouraging its development in their lives (Raff, 2006). And there is no better way to achieve this unique purpose except by emphasizing the importance of the doctrines of equity, which include but are not restricted to the doctrine of proprietary estoppels, the doctrine of promissory estoppels, the doctrine of undue influence etc. All these doctrines could be regarded as the foundations on which the true nature of equity is built on (Raff, 2006; Nygaard et al., 2007). The interesting aspect of this issue is that “trust” can also be created from property that has been equitably divided among the parties laying claims to it. This circumstance occurs if there is a definite description of how the property would be divided (Raff, 2006). In some cases, there is no definite arrangement of how the equitable interests of all the parties involved in the deal could be satisfied; in this case, the law and statutes must be employed to offer equitable judgment that would be fair and acceptable to all parties that are involved in the processes, as stated above (Raff, 2006; Nygaard et al., 2007). Hence, for a trust to be created from any property under disputes, some conditions are required, which include: (i) there must be a settler who has the capacity to handle all the differences of the parties involved and settle the property 5 on trust—and doing this in a way that it would be acceptable to all parties in the deal; (ii) the certainty requirements must be met—this means that it must be certain that all the parties in the process are certainly supporting the idea and doing everything within their power to actualize the goal; (iii) all the formality requirements must be met so that all parties that support the process could be convinced that equality is an important part of the procedure; (iv) the trust must be finally constituted in a way that it would become legal and every member would have their equitable interests represented on an equal basis (Raff, 2006: Nygaard et al., 2007). It must be stated here that uncertain trust property may be in existence if all the parties involved in the legal agreements are not aware of its establishment. Likewise, not all outright property transfers would end up in a trust establishment; it all depends on the desire of the constituting members who are bind together by a legal agreement. 4. These are my reflections during the process of obtaining information for this assignment. Looking at the facts presented in the foregoing, I believe I carried out an in-depth research before I could locate the appropriate legal cases that reveal the complications of the legal systems that may occur when legal property are not transferred to those who have equitable interests in them. I also noticed that poor documentations may be one of the major problems people face when they are suing for a claim to a property, and for which they had got no adequate documents 6 to back it up. Another area of interest is how some property, through the process of equity has ended up be turned into a trust company. This trust company oversees the property co-owned by all the parties involved with the hope of making sure that everyone is judiciously attended to without any act of injustice. Some of the cases cited above reveal that property that were not transferred before the holding company collapses often constitute an endless legal tussle that may not necessarily end in the interest of all the members. But people sometimes agree to iron out a property dispute through general transformation of such property into a trust property. Whatever procedures people used to solve the problems arising from property, the application of thee principles is non-negotiable. References Nygaard, C., Gibb, K., and Berry, M. (2007). Ownership transfer of Social Housing in the UK: A property rights approach. Housing, Theory and Society, 24 (2), 89-110. Raff, M.J., 2006. Private property and environmental responsibility: a comparative study of German real property law. London: Kluwer Law International. Read More