Equity and Trusts 23-24 – Tutorial 1 Reflections

Cardiff University, Law Building, Museum Avenue

School of Law Cardiff, CF10 3AX, Wales UK
and Politics
Tel: +44(0)29 2087 6705
Ysgol y Gyfraith a
www.law.cardiff.ac.uk/law-politics
Gwleidyddiaeth
Prifysgol Caerdydd, Adeilad y Gyfraith, Rhodfa’r
Amgueddfa, Caerdydd, CF10 3AX, Cymru DU

Ffôn: +44(0)29 2087 6705

www.law.cardiff.ac.uk/law-politics

Equity and Trusts 2023-24

END OF CYCLE REFLECTIONS

TUTORIAL ONE: Introduction to Equity and Trusts

Tutorial reflections is not intended to provide you with ‘model’ answers, but instead to provide
feedback about what students did well, and where things needed further attention. It identifies the
scope of what we are looking at in the module. The reflections may also include suggestions for
further sources of information where there have been topical developments, if relevant.

Aims of the session

This introductory session provided an overview of some foundational concepts in Equity and Trusts
that was designed to build on the interactive Xerte resource. The introduction lays the foundations
for the rest of the year, so the issues discussed here were quite broad to ensure that you have an
opportunity to get familiar with what are likely to be unfamiliar concepts. We will be revisiting many
of the issues discussed at various points throughout the module so if you feel that something
doesn’t quite make sense yet, bear with us and we’re sure it soon will.

General comments
As a teaching team, we were very happy with your performance and willingness to participate in this
first tutorial cycle, and we hope this continues all year!
Attendance at most groups was excellent, and it was clear that most of you had prepared well for
the tutorial and many great contributions were made to class discussions. It was clear that some of
you were not feeling confident with the material yet, particularly with the new terminology. Our
main tip here is to keep going – it will all fall into place; you just need to keep working at it.
A few students asked us about the use of Latin terms on this module. We regularly make use of
some Latin terms, such as inter vivos and bona fide, and if you are in any doubt about whether to
use any specific terms, please check with your tutor or post a question to the discussion board.

Feedback on tutorial questions

All groups began the session by discussing some ground rules for talk. The ground rules agreed upon
for each group are slightly different, though a common issue discussed across groups was of the
importance of participation. We do not expect perfection in tutorials, but you do need to talk to us.
Tutorials are an opportunity to discuss the work in depth, and for us to help you understand issues
that you may be finding difficult. It is ok to tell us that you do not understand something, but sitting
in the room in silence does not help us to help you.

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Equity and Trusts 23-24 – Tutorial 1 Reflections

In the session, we had a quiz/discussion on the introductory material. The questions discussed are
below, with a brief comment on the answer.
1) What is Equity? How did Equity develop?
This is where we discussed the development of Equity, and how Equity is still a distinct body of law
from the Common Law.
2) What are the equitable maxims?
A. A set of statements that can provide guidance about the operation of Equity, but sometimes
can be misleading or irrelevant.
B. A set of statements that provide definitive guidelines about how Equity works.
C. A set of statements that provide guidance about the operation of Equity, that are always
misleading and/or irrelevant.

The key point about the maxims is that some of them are useful, but by today many are misleading
or obsolete. You do not need to memorise the maxims, just be familiar with them because they will
occasionally crop up in your reading. You can find out more in any Equity and Trusts textbook.
3) Which one of these is a real equitable maxim?
A. Equity favours the losers in law.
B. Equity is enterprising.
C. He who comes to Equity must come with clean hands.

Remember to look in the textbook if you are unsure about the meaning of this maxim.
4) What are the three key characteristics common to most trusts?
This was an important question to get you thinking about how you would describe the concept of
the trust. Most of the discussion focused on the three key characteristics of trusts: 1) a trust must
involve property; 2) a trust involves fragmentation or division of ownership; and 3) trusts are
obligations.
5) What do settlors do?
A settlor is the person who creates an express trust.
6) What is the difference between a settlor and a testator/testatrix?
Settlors create inter vivos trusts that come into effect while they are still alive, and a
testator/testatrix create wills, which may contain trusts, which come into effect on their death. A
trust found in a will is called a testamentary trust.
7) What is the role of a trustee under a trust?
A. The trustee is the absolute owner of the trust property
B. The trustee has legal title to the trust property
C. The trustee has equitable title to the trust property

The trustee has legal title to the property, which is recognised by the Common Law.

8) What are the responsibilities of the trustee?

A. To perform the trust in whatever way they like
B. To comply with various powers and duties as set out by the trust instrument and/or Equity
C. To comply with various powers and duties as set out by the trust instrument and/or Equity,
and to comply with fiduciary duties

The main point to grasp is that while trustees have legal title to the property, they are not able to do
as they please with the property. We’ll be learning more about trustees’ powers and duties later.

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Equity and Trusts 23-24 – Tutorial 1 Reflections

9) What is the meaning of the term ‘fiduciary’?

Students did well to explain the characteristics of a fiduciary relationship and explained that this is all
about loyalty. We will be revisiting this concept at several points over the year so it’s good to be
familiar with the meaning of this term.
10) What is the role of the beneficiary under a trust?
A. The beneficiary is the absolute owner of the trust property
B. The beneficiary has legal title to the trust property
C. The beneficiary has equitable title to the trust property

The beneficiary has equitable title to the trust property, recognised and enforced by Equity.
11) What kind of rights do beneficiaries enjoy?
The main point here is that beneficiaries have two types of right under the trust: 1) equitable
proprietary rights in the trust property itself and 2) personal rights against the trustee.
12) Why are equitable proprietary rights so important?
Equitable proprietary interests are important because of their advantages, which were noted in the
introductory resource and the textbook reading. Don’t worry if you found this bit challenging – we’ll
be revisiting this at several points this year.
Other points:
Some groups discussed the meaning of vested and contingent interests. Vested and contingent
interests are essentially the opposite of each other. A vested interest is one that belongs to a person
and is not dependent on any uncertain event before it takes effect. A contingent interest will only
vest, i.e., take effect (and become vested), when a condition has been satisfied, and that condition is
not certain to occur. The easiest way to understand this is to think of an example:
o If property is left ‘to Phoebe for life, then to Chandler’ – while it’s true that Chandler will not
enjoy the property until Phoebe has died, Chandler’s interest is vested because Phoebe will
die at some point, so Chandler will enjoy the property eventually.
o But if property is left ‘to Chandler when he reaches 50’, or ‘to Chandler when he gets
married’, Chandler’s interest is contingent because he may never reach 50 or get married,
and so he may never get to enjoy the property.

Some groups discussed the details of insolvency and bankruptcy. For the purposes of this module,
we do not need to worry about this, but for those that asked, the terms have distinct meanings.
Insolvency is being in a state of financial difficulty where you owe more money than you can pay
which can apply to an individual or a company. Bankruptcy is a legal process which is a type of
personal insolvency. There are also other types of insolvency e.g., a company may enter liquidation
or administration.

Further comments
If you would like to read further on the issues discussed in the introduction to clarify or consolidate
your learning, it may be helpful to read the introductory chapters of a different textbook. Remember
you have access to several different Equity and Trusts textbooks through Law Trove.

Looking to the next cycle:

Next time we’ll be looking at our first assessable topic, express private trusts, which all students
study.
If you have questions, you can post them to the discussion board, or ask them in lectures/tutorials. If
you need to speak with us about anything more sensitive or personal, you can make an appointment
for our student support hours (details under ‘Your teaching team’ on Learning Central).