Equity and trusts- lecture 1 notes introduction

Content

Has a long background and it is still developing today

Equity underpins many laws e.g. promissory estoppel
Moral and ethical- put thing in that are right
Equity is slippery, got rules but hard to prove- what they said, acted, did
they rely
Civil- identifying the truth
Minimum equity to do justice, satisfying the equity- how much claim?
Land- proprietary estoppel- stack v dowden. Pattern of contributions
Remedies- what CL is doing s not enough so equity jumps in

Dictionary meaning of equity

NOUN
1. the quality of being fair and impartial:
"equity of treatment"synonyms: fairness fair-mindedness justness justice
equitableness [more]
fair play impartiality even-handedness lack of
discrimination/bias/prejudice/bigotry egalitarianism honesty integrity
rightness rightfulness rectitude uprightness righteousness properness
decency goodness honourableness scrupulousness conscientiousness
reasonableness sensibleness disinterest disinterestedness neutrality
objectivity balance open-mindedness
antonyms: inequity imbalance
2. the value of the shares issued by a company:
"he owns 62% of the group's equity"synonyms: value worth valuation
ownership rights proprietorship [more]

right of possession

(equities)

stocks and shares that carry no fixed interest.

"trading in equities is governed by market rules
3. the value of a mortgaged property after deduction of charges against
it.
"people who have built up a significant amount of equity in their homes
4. law
a branch of law that developed alongside common law and is concerned with
fairness and justice, formerly administered in special courts.
"if there is any conflict between the principles of common law and equity, equity
prevails"

What is equity?

No neat Categorisation

No Statutory Base

Equity supplements the common law

Wide-ranging Case Law

Hybrid principles

Matter of conscience

Gillet v holt [2000]

The facts:

In 1952, when Mr Gillett first met the first defendant Mr Kenneth Holt, the
former was a schoolboy aged 12 and the latter was a gentleman farmer
(and a bachelor) aged 38.

When Mr Gillett junior was 15 Mr Holt proposed that he should leave

school and work full-time for Mr Holt.

Then occurred the first of seven incidents which the judge recorded
([1998] 3 AER at pp.930-2) as assurances given by Mr Holt and relied on
by Mr Gillett. The judge accepted the Gilletts' account as factually
accurate. The first incident (and some supporting material from the same
period) were described as follows by the judge,

Evidence

"1964 Harvest

Mr Gillett says that he and Sally (then his fiance) were taken to dinner by Mr
Holt at the Golf Hotel Woodhall Spa. The discussion was in line with earlier
indications but was "more specific". Mr Holt explained that "as time progressed I
would be involved more and more with the farming business and in due course I
would take over the complete running of the farm and when he died the farming
business would be left to me in its entirety." Mrs Gillett remembers Mr Holt
saying that Mr Gillett was going to be in full charge of the farm in due course and
"that he also wanted to leave the farm to Geoff".

Mr Gillett's father speaks of a dinner at Mr Holt's house at about this time,

at which Mr Holt said he wanted Geoffrey to run the farm which he saw as
being "a permanent arrangement" and that "he would see to it that, when
anything happened to himself, Geoffrey and Sally would be secure". Sally's
brother, Mr Wingate, remembers a conversation at his parents' house, at
which Mr Holt said "something to the effect that he was going to look after
Geoffrey and Sally and that they would have an assured future".

Evidence was universally accepted; intention was clearly found. But in other
cases hard to prove, question of certainty?

Proprietary estoppel
Both sides are agreed on that, and in the course of the oral argument in this
court it repeatedly became apparent that the quality of the relevant assurances
may influence the issue of reliance, that reliance and detriment are often
intertwined, and that whether there is a distinct need for a 'mutual
understanding' may depend on how the other elements are formulated and
understood. Moreover the fundamental principle that equity is concerned
to prevent unconscionable conduct permeates all the elements of the
doctrine. In the end the court must look at the matter in the round.
The decision
It is entirely a matter of conjecture what the future might have held for the
Gilletts if in 1975 Mr Holt had (instead of what he actually said) told the Gilletts
frankly that his present intention was to make a will in their favour, but that he
was not bound by that and that they should not count their chickens before they
were hatched. Had they decided to move on, they might have done no better.
They might, as Mr Martin urged on us, have found themselves working for a less
generous employer. The fact is that they relied on Mr Holt's assurance, because
they thought he was a man of his word, and so they deprived themselves of the
opportunity of trying to better themselves in other ways. Although the judge's
view, after seeing and hearing Mr and Mrs Gillett, was that detriment was not
established, I find myself driven to the conclusion that it was amply established.
Mr Gillett and his wife devoted the best years of their lives to working for Mr Holt
and his company, showing loyalty and devotion to his business interests, his
social life and his personal wishes, on the strength of clear and repeated
assurances of testamentary benefits.
They received (in 1983) 20 per cent of the shares in KAHL, which must be
regarded as received in anticipation of, and on account of, such benefits. Then in
1995 they had the bitter humiliation of summary dismissal and a police
investigation of alleged dishonesty which the defendants called no evidence to
justify at trial. I do not find Mr Gillett's claim startling. Like Hoffmann LJ in Walton
v Walton (14 April 1994, CA) I would find it startling if the law did not give a
remedy in such circumstances.

Satisfying the equity

Since Mr Gillett has established his claim to equitable relief, this

court must decide what is the most appropriate form for the relief to
take

The aim is to "look at the circumstances in each case to decide in

what way the equity can be satisfied". The court approaches this
task in a cautious way, called "the minimum equity to do justice to
the plaintiff"

The result

Mr and Mrs Gillett are to be entitled to the freehold of the whole of

The Beeches (that is the farmhouse, the land occupied by
Countryside Companions and the land farmed under contract by
Aubourn) together with the sum of 100,000 to compensate for the
exclusion of Mr Gillett from all the rest of the farming business.

Issues

The requirements (in proprietary estoppel: assurance, reassurance

and detriment)

The proof

The remedy

Underlying principle: equity is concerned to prevent unconscionable

conduct permeates all the elements of the doctrine

Reading on this case: Malcolm, R. A rural family at war

Estates Gazette, Number 0108, 24 February 2001, pp. 162 163.