The common law of trustsOwnership and obligation

Lionel Smith22 March 2011

A bill of 1457

•To the reuerent fadir in God and right gracious lorde Erchesbissop of Caunterbury, Chaunceler of Engeland, Mekely besechen your pover and contynuelle Oratours, Robert Bale and Agneys his wyf, doughter and heire to John Haunsard … grevously compleynyng ageynst oon Nicholas Marchal … [the facts supporting the grievance are recited].

A bill of 1457• And be this mean the [defendant] came to the

possession of thoo goodys [of the petitioners], ageynst all right feithe & good consciens, & to right hevy ensample & grete perill to the soule of the seide Thomas, wtout your gracious remedy:

• Wherfor please hit your gracious lordeship the premysses tenderly to considre, and for as moche as your seide Besechers by cours of the comen lawe may haue noon recover ageynst the seide Nicholas … to graunte a writte subpena to be directed to the same Nicholas Marchall, comaundyng hym to appere afore the kyng our Soverayne lorde in his Chauncery at a certeyne day & upon a certeyne peyne be your lordeship to be limet, there to answer to the premysses …

• Atte reuerence of god & in dede of charitee.

Indian Trusts Act, 1882

•A “trust” is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another …

Modern common law trusts

•Express (or intentionally created) trusts▫Wealth transmission within the family▫Charities ▫Commercial applications: trusts for bond

holders, pensions and other collective investments, securitization

▫Informal arrangements involving property

Modern common law trusts

•“resulting” trusts or “jumping back” trusts▫A gift may not be what it seems … if it is

presumed to create a trust▫Pecore v. Pecore, 2007 SCC 17, [2007] 1

S.C.R. 795

Modern common law trusts

•Constructive trusts▫Constructive trusts arise by operation of

law when the law creates an obligation to hold particular property for the benefit of another

▫Pettkus v. Becker, [1980] 2 S.C.R. 834: where one party has been unjustly enriched at the expense of the other, he may hold property on constructive trust

▫Foskett v. McKeown, [2001] 1 A.C. 102 (H.L.): tracing of trust property into proceeds