Doctrine of Equity and its Role in Trust Law

Equity
1

Table of Contents
Introduction......................................................................................................................................3
Law of equity...................................................................................................................................3
Certainties in the trust..................................................................................................................4
Operation of the doctrine of equity and its role within the trust law...........................................6
Rights and obligation of trustees and beneficiaries.....................................................................7
Application of the principle of equity and trust law in a social and commercial context...........8
Conclusion.....................................................................................................................................10
Bibliography..................................................................................................................................12
2

INTRODUCTION
Doctrine of equity refers to the set of remedies granted by the court in case of unjust enrichment.
It is based on fairness and impartiality1. The present study is related with the operation of the
doctrine of equity and its role in the trust law by considering the statement that “There is a
paradox at the heart of equity; at times it is wilfully flexible, even chaotic; whereas at other times
it is rigid and dogmatic”. The statement is evaluated by considering aspects such as valid trust,
the rights and obligations of the trustees and the beneficiaries, principles of equity in the social
and commercial aspects.
LAW OF EQUITY
Law of equity plays a very significant role in the common law and legal law. It assists in offering
the relief to the person at the time where there is recognizable right but common law does not
provide any remedy. Court of the country particularly grants the equitable remedies to the person
when the legal relief is not adequate2.
1 Alastair Hudson. Understanding equity & trusts. (Routledge, 2016).
2 James Penner. The law of trusts. (Oxford University Press, 2016).
3

There is a paradox of the heart of equity, at times it is willfully flexible even messy, whereas at
other times it is rigid and inflexible3. The term equity is connected with the notion of
transparency, fairness, loyalty and morality.
Certainties in the trust
The legal case of Knight v Knight demonstrate that only by satisfying the conditions of three
uncertainties the valid trust can be created and then only it is regarded as the trust as binding in
equity and so implement its terms in respect to offer for a beneficiary.
According to the trust law for valid creation of trust, trust document must reflect the certainty of
the subject matter, certainty of the object and the certainty of the intention. This factor is rigid in
legal terms as certainty in the intention means that there is the intention of creating the trust.
Certainty of the subject matter means that the property which is the part of trust must be clear.
Certainty of the objective means, it must be reflective that what is main objective of creation of
the trust and who are beneficiary of the trust.
Certainty in intention and certainty in subject matters is connectively straight forward as
compare with the certainty in objective. It is very difficult for the court to identify the actual
people who are the beneficiary of the trust. There are the distinct test which are applied by the
court for establish the certainty of object in discretionary trust as well as in fixed trust, so that the
appropriate, fair and equitable results can be obtained.
The beneficiary principle is closely connected with the law on certainty of object; therefore it is
important to understand both the aspect in the context of operation of law. Certainty in object
3 Robert H Sitkoff. "Fiduciary Principles in Trust Law." (Routledge, 2018).
4