Complete Equity and Trust Readings: Distinction Notes Weeks 2-5

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Nature of Equitable Estates and Interests Chapter 4 If one person has equitable interest in property, implies some other person has legal interest. If one person has both legal and equitable interests in relevant property, she has not equitable interest as she is the absolute legal owner of property, not two seperate interest. Undue influence - Dickinson v Burrell If A as result of undue influence exerted by B, conveys property by gift to B, and then assigns right to rescind transaction to C, C can seek equity’s assistance to rescind transaction and have property reconveyed to C. Because A’s right can be enforced by C against B, it is more than merely personal right against B. It is an equitable proprietary right, when assigned to C, can be enforced by C against B. To give effect to doctrine of undue influence, necessary to hold that A has an equitable interest. Fraudulent Misrepresentation - Gross v Lewis Hillmand Ltd (Distinguished from Dickinson) If A is induced to purchase land from B as result of fraudulent misrepresentation, then transfer land to C, C cannot asset against B the right to rescind that A had against B. Because C is denied remedy of rescission, the right of A is purely personal and not proprietary. Distinguished from Dickinson v Burrell, the assignee here is not claiming to recover an equitable interest in property previously conveyed away by his assignor, but is claiming to throw back property assigned to him, not on his immediate assignor but on party who sold it to his assignor. The distinction is illogical and C’s position should be same, however the two cases illustrate variety of rights recognised by equity are impossible to rationalise and categorise Indicia of Equitable interest Proprietary interest must be definable, identifiable by third parties, capable in its nature of assumption by third parties, have some degree of permanence or stability — This is not a comprehensive list National Provincial Bank Ltd v Ainsworth (Lord Wilberforce). More significant indicia of property is assignability - capable in nature of assumption by third party, not a test of proprietary right, however not a test of proprietary right, Useful Four Criteria for measuring proprietary nature of equitable interest: 1. The power to recover the property the subject of the interest or the income thereof, as compared with the recovery of compensation from the defendant payable from no specific fund 2. The power to transfer the benefit of the interest to another 3. The persistence of remedies in respect of the interest against third parties assuming the burden thereof 4. The extent to which the interest may be displaced in favour of competing dealings by the grantor or others with interests in the subject matter

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