Law of Real Property 1

2018-2019

Lecture 9

“The two streams of jurisdiction, though they run in the same channel, run side by side and do not mingle their waters” Ashburner’s Principles of Equity, 2nd Ed, p18.

Before 1871

• Two courts with different sets of Rules: Common law Court (High Court) and Chancery

• Parties could go from one to the other. Some things were exclusive to High Court and some were exclusive to Chancery, but there was some overlap. The same case might be treated differently by the two.

Executors place estate property in bank which

then crashes

Chancery High Court

• Only penalized if Strict Liability

negligent

Time not made of essence in contract

Chancery High Court • Time not of essence Time always of

essence

Unregistered written Agreement for long lease

(> 2 years)

(By law, these should be formally registered

as a deed in the land registry.)

Chancery Court • Given full effect Treated as

periodic tenancy

After 1871

• Supreme Court of Judicature Act gave the Court the power to adopt certain equitable rules, such as “time not being of essence in contracts” and “executors not being strictly liable”.

• Catchall phrase: Wherever there is conflict between the Rules of Law and the Rules of Equity, the Rules of Equity shall prevail

Walsh v Lonsdale

(1882) 21 Ch D 9

• Walsh v Lonsdale was the first major relevant case after fusion. It dealt with an unregistered 7 year written lease. The Court had to decide whether to follow the precedents from Law or from Equity.

• “There is only one court, and the equity rules prevail in it.” – Jessel MR

• The lease was given full effect as though it had been properly registered.

Trusts

Settlor

Trustee Beneficiary

Trust

Property

• A trust is constituted when trust property is conveyed to the trustees.

• In the olden days, the common law court treated the trustees as the absolute owners. Only the Chancery would recognize trusts and give a declaration of trust.

• Today, a settlor can prepare a Deed of Trust, or declare a trust by Will.

Title Deeds

Settlor

Trustee Beneficiary

Trust

Property

Legal Estate

Title Deeds

Beneficial Estate

Settlor’s Deed of Trust

Or Court Order

Declaration of Trust

Trustee 2 (unless Chancellor’s

Darling)

Beneficiary

Trust

Property

Legal Estate Beneficial Estate

Sell, Mortgage or Assign Good against world Right in Rem

Sell, Mortgage or Assign Good against trustee Right in Personam

Trustee

Beneficiary 2

• In Rem = against the thing.

• In Personam = against the person, no matter where they are in the world

• Action to recover land from trespasser must be filed in the same jurisdiction as the land.

• Action to enforce trust against trustee may be filed and enforced wherever the trustee is.

• Today, the trust document is legally recognized in relation to express trusts.

• The court must still declare all other trusts.

• Generally, where the court has declared a trust, it also compels transfer.

Title Deeds

Court Order

Declaration of Trust

Court Order

Conveyance

Title Deeds

Court Order

Sale

OR

•Specific Performance including Part Performance, •Constructive Trust, •Resulting Trust, •Proprietary Estoppel

Resulting and Constructive

Trusts

Resulting Trust

Constructive Trust (usually seen in Family Home) In many countries, husband and wife issues are now governed by Statute

Services

Specific Performance

Specific Performance

• “an order of the court directing a party to a contract to perform his obligations thereunder according to its terms.”

– Pettit in Equity and Law of Trust

Court Order

Specific

Performance

Contract for Sale

• Specific Performance is an equitable remedy.

• It is discretionary.

• The Court will consider the type of contract, the inadequacy of damages, and whether there are any defences.

• Defences include “clean hands” & “delay” (doctrine of laches)

Doctrine of Part Performance

• All agreements related to land must be in writing.

• Part performance is an equitable doctrine that allows a party to enforce an oral agreement.

• There is some overlap with proprietary estoppel which we consider later in the semester.

Court Order Specific

Performance via doctrine of

Part Performance

Oral Contract for

Sale

Actions

The first step is to convince the Court of the existence of the contract. The actions must be relatable only to the type of contract claimed.

• Landowner promised housekeeper he would leave her the house if she looked after him for free. Did not include it in his will and his heirs turned her out.

Blue looked after Red

In Maddison v Alderson (1883)

I will give you the

house if you look after

me

Looks after Red for the rest of his

life

Did not accept Blue’s actions as proof of contract.

No specific performance

granted.

Kingswood Estate v Anderson

I will give you a new property

on the same

terms if you move

Gives up rent-restricted apartment

Accepted Blue’s actions as proof of

contract. Specific

performance granted.

Elderly caregiver of son with disability