WEEK 7 –
CONSOLIDATION
(W1-6)
STRUCTURE
English court structure – a recap.1.
UK Constitution.2.
Statutory interpretation.3.
Equity and trusts.4.
Is there any
topic you
would like to
understand
better?
WHAT ARE THE RULES OF
STATUTORY INTERPRETATION?
In groups, 10 minutes to think of as many as
you can with an example of each.
Don’t spend too long on one rule. Try to cover
them all.
TRADITIONAL RULES OF
STATUTORY INTERPRETATION
Literal rule – judge applies ordinary, plain meaning to the words, even if the
result was unjust or nonsensical. Following parliament closely, not straying into
law making. E.g. R v Harris (1836).
1.
Mischief rule – est. 1584 = oldest rule – what mischief was parliament trying to
prohibit? Purpose of the statute. E.g. Smith v Hughes (1960) charged under
Street Offences Act 1959.
2.
Purposive rule/approach – similar to mischief but more concerned with3.
parliament’s intentions when passing the Act than just the mischief caused.
+ Golden rule - modifies the literal rule in an attempt to avoid absurd results.
MODERN APPROACH TO
STATUTORY INTERPRETATION
The Human Rights Act 1998 also impacts statutory interpretation in
modern times.
Section 3 of the Human Rights Act is the interpretative provision, and
it applies to primary and secondary legislation whenever enacted,
whether before or after the Human Rights Act.
The duty of the court under this section is to interpret legislation ’so
as far as is possible’ consistently with the European Convention on
Human Rights
Monarchy
Executive Legislature Judiciary
Governments (UK,
Wales, Scotland, NI).
Local authorities and
other public bodies (e.g.
HMRC, Dept for
Education).
Parliaments (UK,
Wales, Scotland,
NI).
Courts (with the
Supreme Court at
the top and
responsible for
whole of the UK for
constitutional
matters.
PRIMARY AND SECONDARY
LEGISLATION
Primary = statutes.
Secondary = laws
passed under the
authority of
another statute.
Key constitutional
principles
3. Rule of law
2. Separation of powers
1. Sovereignty of parliament
2. THE MAXIMS OF
EQUITY.
12 maxims of equity
per Hudson (2022: pp.
20-28). These are
applied flexibly,
showing equity’s
preference for broad
ethical principles over
the strict rules of CL.
(Ibid.)
1. Equity will not
suffer a wrong to
be without a
remedy.
2. Equity follows the
law.
3. Where there is
equal equity, the law
shall prevail.
4. Where the
equities are equal,
the first in time
shall prevail.
5. Delay defeats
equities.
6. He who seeks
equity must do
equity.
7. He who comes to
equity must come
with clean hands.
8. Equality is
equity.
9. Equity looks to the
intent rather than to
the form.
10. Equity looks on as
done that which
ought to have been
done.
11. Equity imputes an
intention to fulfil
an obligation.
12. Equity acts in
personam.
1. Equity will not suffer a wrong to be
without a remedy.
Where the common law or statute
don’t have a remedy, equity will
intervene.
2. Equity follows the law.
But not slavishly or always.
Generally, equity will win over non-
statutory common law, but not over
statute.
3. Where there is equal equity, the law
shall prevail.
If there is no clear outcome, the most
suitable common law principle will
be applied.
4. Where the equities are equal, the
first in time shall prevail.
The first to create/acquire rights
will have the court’s priority.
5. Delay defeats equities.
6. He who seeks equity must do
equity.
If a claimant has acted unfairly, this
will defeat a claim in equity.
7. He who comes to equity must come
with clean hands.
If a claimant has acted
unconscionably themselves, this
defeats a claim in equity.
8. Equality is equity.
If parties have an equal claim in a
property, the title will generally be
divided equally amongst them.
9. Equity looks to the intent rather
than to the form.
10. Equity looks on as done that
which ought to have been done.
11. Equity imputes an intention to fulfil
an obligation.
12. Equity acts in personam.
13. Equity will not permit
statute or
common law to be used
as an engine of fraud.
14. Equity will not permit
a person who is trustee
of property to
take a benefit from
that property qua
trustee.
15. Equity will not
assist a volunteer.
16. Equity abhors a
vacuum.
17. A trust operates on
the conscience of a legal
owner of the
property.
Hudson also adds these maxims that “cut to
the heart of equity”:
3. EQUITABLE
REMEDIES.
1. Specific
performance
2.
Injunctions 3. Recission
4.
Rectification 5. Account
Where financial damages wouldn’t be
sufficient, the courts can order for specific
performance. This involves a party being
compelled to complete their obligation.
Specific performance can only be granted at
trial, because it’d be inappropriate for a judge
to do so without knowing the full
picture/examining all the arguments and
evidence at a trial, etc.
Must usually be a unique obligation required.
Courts won’t enforce obligations that would
require constant supervision and are reluctant
to enforce SP for specific services.
Examples: Sky Petroleum v VIP Petroleum
[1974] and Behnke v Bede Shipping Co Ltd
[1927].
1. Specific
performance
More commonly awarded at the end of a trial, but an interim
injunction can be awarded before a trial.
Can be prohibitive, mandatory or quia timet.
2. Injunctions
PROHIBITIVE MANDATORY QUIA TIMET
MANDATORY
Prevent a breach of some obligation.
E.g. Venables v News Group
Newspapers [2001].
At full trial, require
performance of
obligation like SP.
----
INTERIM
Lord Diplock in American Cyanamid
Co v Ethicon Ltd [1975] set out the
guidelines: serious question to be
tried, damages inadequate, balance
of convenience requires injunction –
risk of doing injustice to a party.
American Cyanamid
tests apply, but a high
degree of assurance
that the grant will be
the right decision
after the trial is
needed.
Do not require proof of
actual harm as they
prevent harm from
occurring – e.g.
Venables case.
Freezing orders (previously: Mareva injunctions)
Orders to freeze a defendant’s assets. If there is a danger that
someone will try to destroy or hide assets to avoid paying
damages, a freezing order can be issued to freeze assets up
to the value of the claim being pursued.
The claimant gains no property rights over the frozen assets –
an example of equity acting personally. However, it is possible
that this is somewhat not the case – Z Ltd v A-Z and AA-LL
[1982].
Test is American Cyanamid + Derby & Co Ltd v Weldon
[1990].
Aims to restore both parties to their original positions before
any wrong happened. Can be used for misrepresentation,
undue influence, duress or mistake per Bainbridge v
Bainbridge [2016].
Can be barred if:
3. Rescission
Circumstance Case
Innocent 3ʳᵈ party negatively affected Phillips v Brooks [1919]
Delay in making the claim Leaf v International Galleries [1950]
Claimant affirms the contract Long v Lloyd [1958]
Impossibility of restoring the parties Erlanger v New Sombrero Phosphate Co (1873)
Allows the amendment of a document that doesn’t reflect the
parties’ actual agreement.
Courts hesitate to do this unless there is good reason – per City of
Westminster Properties Ltd v Mudd [1959].
Principles to test laid down in Racal Group Services Ltd v Ashmore
[1995] and Giles v RNIB [2014]:
Clear evidence that document doesn’t reflect true intentions of the
parties.
a.
The flaw is not just about the consequences of what they wanted
but the real intentions.
b.
All parties agreeing to the rectification is not enough by itself.c.
4. Rectification
Per Attorney-General v Blake [2000], this is used to make a
fiduciary repay any bribes, unauthorised profit or profit
obtained from a breach of confidence.
5. Account
4. WHAT IS A
TRUST?
Watt (2021: 27) says it is difficult to define a “trust”.
Thomas and Hudson (2010) define a trust as:
“the imposition of an equitable obligation on a person who is the legal owner
of a property (a trustee) which requires that person to act in good conscience
when dealing with that property in favour of any person (the beneficiary) who
has a beneficial interest recognised by equity in the property.”
It is almost always true that the trustee holds the legal title and the trustee
must discharge the purposes for which the property is vested in them. (Watt
2021: 26)
Parties involved.
See: (Hudson 2022: 42)
TRUSTEE
BENEFICIARY
SETTLOR
Legal title
and equitable
interest
Personal
obligations
under the
trust
Settlor must own whole property – legal and equitable interests to
be able to transfer it. Once trust is validly declared (e.g. property
transferred), settlor has no further active role.
Trustee has property vested in them. BUT the trustee cannot use the
asset for their own purposes. The wording of the terms of the trust
are important for establishing what the trustee can and cannot do.
Exact obligations found in the trust document.
However, law does impose some obligations – e.g. amount of info
trustee must give the beneficiaries, appointment/retirement of
trustees, termination of the trust, etc.
The trustee’s powers are FIDUCIARY in nature. This means a person
has entered into a relationship of trust and confidence from another
and the trusted person must fulfil their obligations to the other.
Per Millett LJ in Bristol & West Building Society v Mothew [1998],
some key duties of a fiduciary – and thus a trustee – are that:
A fiduciary can be made to make up for any losses suffered.
To act in good
faith
Not to make a
profit from the
trust
Must avoid
conflicts of
interest
Cannot act for
interest of others
or self without
principal’s
informed consent
Beneficiaries has a range of remedies in the event of a breach of trust,
including:
Protection from insolvency of the trustee, as the property rights are
part of the beneficiary’s estate, not the trustee’s.
Right of compensation if a breach of trust results in the property
being lost, per Target Holdings v Redferns [1996].
Right to trace and assert rights over any substitute property, per
Pilcher v Rawlings (1872), including any one not a trustee but who
participated in the breach, per Royal Brunei Airlines v Tan [1995].
Beneficiaries’ position will vary somewhat depending on the terms
of
the trust.
5. THE TYPES OF TRUSTS.
Three different types of trusts.
EXPRESS RESULTING CONSTRUCTIVE
Trusts created explicitly
by the settlor.
Implied by the court, so not
created by settlor but
settlor may’ve intended to
create it.
Arises by operation of law
– by court when
circumstances are
appropriate. No settlor.
Can be created by
writing or orally.
Per Westdeutsche
Landesbank Girozentrale v
Islington LBC [1996],
created in 2 situations:
– beneficiaries unclear;1.
or,
– contributor to price of2.
land.
When defendant has
unconscionably taken
property into their
possession, they’ll be
treated as holding it on
trust for rightful owner.
Trust property must be
sufficiently identifiable.
Beneficiaries must be
clear.
Also used by courts to
effect common intentions
of families.
DAMAGES
Aims to compensate a party for loss suffered – aka “expectation loss”
or “expectation interest”.
Robinson v Harman (1848) – Baron Parke:
“… where a party sustains a loss by reason of a breach of contract, he
is, so far as money can do it, to be placed in the same position, with
respect to damages, as if the contract had been performed”.
The court will only compensate for the loss actually suffered by the
victim. Generally, no loss = no damages (perhaps nominal damages).
In Planation Holdings (FZ) LLC v Dubai Islamic Bank PJSC [2017], UKSC
said:
“… it is necessary to consider what level of damages would fairly
compensate the claimant. The claimant should not be shortchanged.
Equally, however, the claimant ought not to be allowed to recover a
windfall.”
To determine how much loss has taken place, courts divide losses into 2
categories: pecuniary and non-percuniary.
PERCUNIARY LOSS NON-PERCUNIARY LOSS
Financial loss. Damages will be calculated
to compensate the innocent party for any
financial losses that may have happened
due to the breach.
Non-financial harm suffered. Generally
cannot sue for N-P losses in contract cases,
unless a major object of the contract is
pleasure, relaxation or peace of mind.
Limit Overview Example case
Causation
Party only liable for losses caused
by their breach. Must be the
“dominant” or “effective” cause if
not the only.
Galoo Ltd v Bright
Grahame Murray
[1994] in EWCA.
Remoteness
Some losses which clearly result
from the def’s breach of contract
BUT are considered to far
removed from the breach for
breaching party to fairly be
expected to pay.
Hadley v
Baxendale (1854)
Is calculating non-percuniary losses difficult to do? How do you quantity
a loss of relaxation, peace of mind or pleasure?
There are also limits on damages that can be awarded.
+ Contributory
negligence and
mitigation, which
we will look at in