Equity and Trusts in Australia PDF
Preview Equity and Trusts in Australia
EQUITY AND TRUSTS IN AUSTRALIA EquityandTrustsinAustraliaisapracticalandengagingintroductiontoequitable and trust law in Australia. Drawing on the authors’ collective 45 years of teaching experience, this text is carefully designed to cater to the needs of undergraduate lawandJurisDoctorstudentsapproachingthelawofequityandtrustsforthefirst time.Thebookprovidesasuccinct,clearandaccessibleexplanationofkeytheories and terminology in equity and trusts, and demonstrates how these are applied in practicewithsimple,topicalexamples.Comprehensivelycross-referenced,itdraws linksbetweenequitableandtrustdoctrinesandtheirwiderrelationshipstothelaw. The companion website, at www.cambridge.edu.au/academic/equity, is an invaluable resource for students and lecturers, featuring further reading, discus- sion points, and practice exercises and solutions. M.W.Bryan is Professor Emeritus at the University of Melbourne. V.J.Vann is Lecturer at Monash University. Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:40, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:40, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 EQUITY AND TRUSTS IN AUSTRALIA M. W. Bryan V. J. Vann Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:40, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 CAMBRIDGEUNIVERSITYPRESS Cambridge,NewYork,Melbourne,Madrid,CapeTown, Singapore,Sa˜oPaulo,Delhi,MexicoCity CambridgeUniversityPress 477WilliamstownRoad,PortMelbourne,VIC3207,Australia PublishedintheUnitedStatesofAmericabyCambridgeUniversityPress,NewYork www.cambridge.org Informationonthistitle:www.cambridge.org/9780521676632 (cid:2)C M.W.Bryan,V.J.Vann2012 Thispublicationiscopyright.Subjecttostatutoryexception andtotheprovisionsofrelevantcollectivelicensingagreements, noreproductionofanypartmaytakeplacewithoutthewritten permissionofCambridgeUniversityPress. Firstpublished2012 CoverandtextdesignbySardineDesign TypesetbyAptaraCorp. PrintedinChinabyC&COffsetPrintingCo.Ltd. AcataloguerecordforthispublicationisavailablefromtheBritishLibrary NationalLibraryofAustraliaCataloguinginPublicationdata Bryan,Michael,1949– EquityandTrustsinAustralia/MichaelBryan,VickiVann. 9780521676632(pbk.) Includesindex. Equity–Australia. Trustsandtrustees–Australia. Vann,Vicki. 346.94004 ISBN978-0-521-67663-2Paperback Additionalresourcesforthispublicationatwww.cambridge.edu.au/academic/equity Reproductionandcommunicationforeducationalpurposes TheAustralianCopyrightAct1968(theAct)allowsamaximumof onechapteror10%ofthepagesofthiswork,whicheveristhegreater, tobereproducedand/orcommunicatedbyanyeducationalinstitution foritseducationalpurposesprovidedthattheeducationalinstitution (orthebodythatadministersit)hasgivenaremunerationnoticeto CopyrightAgencyLimited(CAL)undertheAct. 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University of Sydney Library, on 22 Jul 2018 at 01:24:40, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 CONTENTS Preface xi Tableofcases xii Tableofstatutes xxix Listofabbreviations xxxv Part A Introduction 1 Anoverviewofequity 2 Whatisequity? 3 Amapofequity 13 Themaximsofequity 20 What’sonline? 21 Part B Equitable Remedies 2 Anintroductiontoequitableremedies 24 Introduction 25 Personalandproprietaryremedies 26 Theobjectivesofequitableremedies 28 What’sonline? 31 3 Specificperformance,injunctionsandequitabledamages 32 Introduction 33 Specificperformance 33 Injunctions 40 Plaintiff’sremedyifspecificperformanceorinjunctionaredenied 51 Equitabledamages 51 Areequitabledamagesavailableforequitablewrongs? 52 Howareequitabledamagesassessed? 54 What’sonline? 55 4 Monetaryremediesinequity 56 Accountsofprofits 57 Howareaccountsofprofitscalculated? 58 Equitablecompensation 61 Howisequitablecompensationcalculated? 63 What’sonline? 70 v Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:42, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 vi Contents 5 Rescission,rectificationanddeclarations 71 Introduction 72 Whencanavoidabletransactionberescinded? 72 Theaimofrescission 73 Rescissionatcommonlawandinequity 73 Totalandpartialrescission 74 Theelectiontorescind 75 Restoringthepartiestotheirpre-contractualposition 76 Theproprietaryconsequencesofrescission 77 Barstorescissionandpecuniaryrestitution 78 Rectification 79 Declaration 81 What’sonline? 83 6 Barstorelief 84 Introduction 85 Laches 85 Acquiescence 87 Uncleanhands 88 Hardship 91 Effectoforderonthirdparties 92 What’sonline? 93 Part C Equity, Contract and Property 7 Equityincontractlaw 96 Introduction 97 Estoppelandpromiseenforcement 97 Equityandvoidabletransactions 103 Undueinfluence 105 Unconscientiousconduct 110 TheruleinYerkeyvJonesandtheGarciacase 113 Equityandsubstantivefairness:penaltiesandrelieffromforfeiture 116 What’sonline? 121 8 Equitableproprietaryinterests 122 Introduction 123 Thenatureofequitableownership 125 Prioritydisputesandthedoctrineofnotice 126 Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:42, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 Contents vii Equitiesandequitableinterests 127 What’sonline? 129 9 Equitableassignments 130 Introduction 131 Assignmentoflegalproperty 132 Assignmentofequitableproperty 141 Statutoryassignment 143 What’sonline? 149 Part D Equitable Obligations 10 Fiduciaryobligations 152 Introduction 153 Fiduciaryrelationships 154 Fiduciaryobligations 162 What’sonline? 172 11 Participantsinabreachoffiduciaryobligation 173 Introduction 174 Thirdpartyliability:theruleinBarnesvAddy 176 Otherformsofparticipatoryliability 187 What’sonline? 188 12 Breachofconfidence 189 Introduction 190 Theequitableobligationofconfidence 190 Defencestobreachofconfidence 197 Protectionofprivateinformation 199 Remediesforbreachofconfidence 202 What’sonline? 205 Part E Express Trusts 13 Theconceptoftheexpresstrust 208 Introduction 209 Definition 209 Trustsandrelatedconcepts 218 What’sonline? 224 Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:42, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 viii Contents 14 Certaintyrequirementsinthelawoftrusts 225 Introduction 226 Certaintyofintention 227 Certaintyofsubject-matter 235 Certaintyofobjects 237 What’sonline? 245 15 Creatinganexpresstrust 246 Introduction 247 Methodsofcreatingatrust 247 Testamentarytrusts 251 Thedoctrineofincorporationbyreference 252 Incompletelyconstitutedtrusts 252 Trustsandpublicpolicy 253 What’sonline? 255 16 Trustsforcharitableandnon-charitablepurposes 256 Introduction 257 Avalidtrustforapurpose 257 Historicaldevelopmentofthecharitabletrust 258 Trustsfortheaged,impotentandpoor 259 Trustsfortheadvancementofeducation 261 Trustsfortheadvancementofreligion 262 Trustsforotherpurposesbeneficialtothecommunity 263 The‘publicbenefit’ 267 Trustsformultiplepurposes 269 Administrativeschemes 270 Trustsfornon-charitablepurposes 272 Problemswithpurposetrusts 272 What’sonline? 275 Part F Performing the Trust 17 Trustees’dutiesandpowers 278 Introduction 279 Sourcesofthetrustee’sdutiesandpowers 279 Dutiesonassumptionoftrusteeship 280 Ongoingmanagementduties 282 Dutiesofperformance 287 Trustees’powers 296 Exerciseofpowerandreview 296 Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:42, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 Contents ix Effectofimproperexerciseofdiscretion 302 What’sonline? 303 18 Investmentoftrustfunds 304 Introduction 305 Sourcesoftrustees’investmentpowers 305 Thestatutorymodel 307 Investingprudently 309 Reviewofinvestments 311 Applyingotherdutiesoflawandequitytoinvesting 312 Matterstobeconsideredbythetrusteewheninvesting 317 Exculpatoryprovisions 319 What’sonline? 321 19 Trustees’rightsandliabilities 322 Introduction 323 Trustees’liabilities 323 Trustee’srightofindemnity 323 Thestatusofthetrustee’srightofindemnity 324 Indemnificationbythebeneficiaries 331 Trustee’srighttoimpoundbeneficiary’sinterest 334 Trustee’srightofcontributionfromco-trustees 334 Trustee’srighttorecoveroverpaymentfromabeneficiary 335 What’sonline? 336 Part G Breach of Trust 20 Breachoftrust:Defencesandremedies 338 Introduction 339 Exculpationanddefences 339 Exculpationinthetrustinstrument 339 Statutoryexculpation 343 Equitabledefences 346 Remediesinthecontextofbreachoftrust 348 Monetaryremediesforbreachoftrust 349 Non-monetaryremediesforbreachoftrust 353 Standingtosue 355 What’sonline? 355 21 Tracing 356 Introduction 357 Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:42, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013 x Contents Tracingandclaimingatcommonlawandinequity 358 Afiduciaryrequirement? 359 Theequitabletracingrules 360 Defencestoequitabletracingclaims 368 What’sonline? 369 Part H Non-consensual Trusts 22 Resultingtrusts 372 Introduction 373 Whydoesequityrecogniseresultingtrusts? 374 Thepresumptionofadvancement 376 Applicationofthepresumptionstofamilyproperty 379 Voluntarytransfersofproperty 384 Resultingtrustsarisingonfailureofanexpresstrust 384 Resultingtrustsarisinginothercasesoffailureofbasis:theQuistclosetrust 386 What’sonline? 388 23 Constructivetrusts 389 Introduction 390 Theconstructivetrustcomparedwithothertrusts 390 Categoriesandprinciples 391 The‘commonintention’constructivetrustandfamilypropertydisputes 393 TheBaumgartnerconstructivetrust 395 Theconstructivetrustasaremedyforestoppel 402 Constructivetrustsimposedforbreachoffiduciaryobligation 403 Theconstructivetrustimposedoverstolenmoneyanditsproceeds 406 Theconstructivetrustasarestitutionaryremedyforunjustenrichment 407 Thedoctrineofmutualwills 409 Constructivetrustsimposedoverpropertytransferredunderspecifically enforceablecontracts 411 What’sonline? 413 Index 414 Downloaded from https://www.cambridge.org/core. University of Sydney Library, on 22 Jul 2018 at 01:24:42, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/CBO9781139194013
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