Equity and Trusts is widely regarded as one of the most challenging modules on a law degree. The subject combines technical rules (certainties, formalities, tracing) with broad equitable principles (unconscionability, fiduciary duties).
1. Key Topics to Master
| Topic | Key Cases | Common Exam Issues |
|---|---|---|
| Three certainties | Knight v Knight, Re Gulbenkian, Re Golay | Is the language precatory or imperative? Is the subject matter certain? |
| Constitution of trusts | Milroy v Lord, Re Rose, Pennington v Waine | Has the trust been properly constituted? Equity will not assist a volunteer |
| Secret trusts | Ottaway v Norman, Re Snowden | Fully secret vs half-secret trusts; communication and acceptance |
| Resulting trusts | Vandervell v IRC, Re Vandervell (No 2) | Automatic vs presumed resulting trusts |
| Constructive trusts | Lloyds Bank v Rosset, Stack v Dowden, Jones v Kernott | Common intention constructive trusts in family home disputes |
| Breach of trust | Speight v Gaunt, Nestle v National Westminster Bank | Standard of care; investment duties |
| Tracing | Re Hallett, Re Oatway, Foskett v McKeown | Common law vs equitable tracing; mixed funds |
2. Problem Question Approach
For equity problem questions, follow this structure:
- Identify the type of trust: Express, resulting, or constructive?
- Check validity: Are the three certainties satisfied? Are formalities complied with?
- Identify breaches: Has the trustee breached any duties?
- Consider remedies: Personal claims vs proprietary claims; tracing
- Apply defences: Section 61 Trustee Act 1925; limitation; laches
3. Essay Question Tips
Common essay topics include:
- The future of the common intention constructive trust after Jones v Kernott
- Whether the "unconscionability" basis for secret trusts is convincing
- The coherence of the rules on certainty of objects
- Whether equity's approach to tracing is principled or pragmatic
4. Tracing — The Most Technical Topic
Tracing questions are common and require precise application of rules:
- Unmixed funds: Follow the money directly
- Mixed funds (trustee + beneficiary): Re Hallett — trustee presumed to spend own money first
- Mixed funds (two innocent parties): Clayton's Case (first in, first out) or pari passu
- Profitable investments: Re Oatway — beneficiary can claim the profitable asset