Chapter 6 Self-test questions

. Imagine a case where A holds a legal estate in land on trust for B. According to the extract from Hackney in section 6.1.2, in what way can A, the trustee, be described as the 'owner' of the land?

The trustee has a legal title and access to common law courts and remedies, and is therefore 'owner' in that sense. However, in any sensible usage of the term, he is not an owner, as he must use his rights for the benefit of B.

The trustee is not the owner of the land in any sense of the term. The beneficiary of the trust holds all the ownership rights.

The trustee is the owner of the property in the traditional and sensible usage of the term, although the beneficiary has some rights which he or she can enforce against the trustee.

The trustee is not owner of the land in any sense, unless he or she is also a beneficiary of the trust.

. Is there such a thing as an equitable estate in land?

Yes. Whilst the wording of the Law of Property Act 1925 means that the term 'equitable estate' is not technically correct, it is possible for B to have an equitable right that is akin to a legal estate in land. In such a case, it would be better to call B's right an equitable estate in land.

No. Equitable estates in land do not exist, as it is impossible for B to have an equitable right in relation to an estate in land.

No. It is possible for B to have an equitable interest in land that is akin to a legal estate (as will occur, for example, where A holds a legal freehold or lease on trust for B). However, the wording of the Law of Property Act 1925 means that, in such a case, B's right is defined as an equitable interest, rather than an equitable estate.

Yes. If, for example, A holds a legal freehold or lease on trust for B, then B has an 'equitable estate'.

. In Rhone v Stephens, Mr and Mrs Rhone claimed that they held an equitable property right that placed Ms Stephens under a duty to repair the roof of Ms Stephens' house. Did the House of Lords find in favour of the Rhones? What was the chief reason the House of Lords gave for its decision?

Mr and Mrs Rhone were unsuccessful in their claim. Due to its content, the right that they were claiming was not recognized as a legal or equitable property right in land. It was held that, at common law, an agreement to perform a positive act (such as repairing a roof) could not impose a duty on a third party (such as Ms Stephens). Further, equity would not 'contradict the common law' by allowing such an agreement to give rise to an equitable property right.

Mr and Mrs Rhone were unsuccessful in their claim. Due to its content, the right that they were claiming was not recognized as a legal or equitable property right in land. It was held that, as the Law of Property Act 1925 section 4(1) limits the recognition of new types of equitable interests in land, their claim had to fail.

Mr and Mrs Rhone were successful in their claim. The House of Lords recognized that, although the right they were claiming was a positive covenant and therefore did not count as a legal interest in land, it could be an equitable interest and so bind third parties such as Ms Stephens.

Mr and Mrs Rhone were successful in their claim. The right that they were claiming was a restrictive covenant, which was recognized as an equitable interest in land and so can bind third parties such as Ms Stephens.

. According to Lord Wilberforce's speech in National Provincial Bank v Ainsworth, what qualities must a right have to be capable of being recognized as an equitable property right?

The right must be one which was recognized as an equitable property right before 1926. If it was not, then the Law of Property Act 1925 prevents the right from counting as an equitable property right in land.

The right must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and, to some degree, permanent, and stable.

The right must be one which is listed in the Law of Property Act 1925, section 1(2).

Permitting the right to count as an equitable property right in land must not contradict the common law.

. Which of the following statements best describes the importance of formalities in the acquisition of equitable property rights?

The same formality rules do not apply to the acquisition of equitable property rights as to that of legal property rights. However, the acquisition of an equitable property right always requires the existence of a written contract under which the party holding legal title to the land comes under a duty to use his right for the benefit of the party claiming an equitable interest in the land.

Formality rules are not relevant in equity; equity is about the enforcement of morality regardless of formality requirements.

Formality rules are just as important in equity as at common law, and the rules applying to the acquisition of equitable property rights are just as strict as those applying to the acquisition of legal property rights.

Formality rules apply to regulate the acquisition of both legal and equitable property rights in land. Nonetheless, the formality rules applying to equitable property rights are less demanding and, due to their nature, equitable property rights are more likely to arise informally.

. According to the extract in section 6.7, which of the following statements best describes Burrows' position on the relationship between common law and equity?

In the current law, common law and equity do not always sit comfortably with each other. However, the fusion of the two bodies of rules is desirable, and a realistic possibility. It will involve removing the inconsistencies between common law and equity and will thus produce a coherent and harmonized law.

In the current law, common law and equity sit comfortably with each other. To the extent that there are any inconsistencies between the two, the rule is simple; equity prevails. Therefore no change in the law is needed.

In the current law, there are some differences between common law and equity. However, these differences can be explained and justified by the historical split between common law and equity courts.

In the current law, there are very few inconsistencies between the common law and equity, and those inconsistencies will naturally be removed over the course of time.

. According to the extract from section 6.7, how do McFarlane and Stevens argue that the term 'equitable property right' is inappropriate?

In contrast to a legal property right, an 'equitable property right' is not proprietary in the fullest sense as it is easier for a third party to have a defence to a pre-existing equitable property right.

An 'equitable property right' is not truly proprietary as it is not a right that relates to a thing and imposes a prima facie duty on the rest of the world. So, if A holds a legal freehold on trust for B, then B does not have a right against A's land; instead, he has a right against A's freehold.

The term 'equitable property right' is the result of a confusing historical anomaly. Now that there is no separate system of courts of equity, there is no need to distinguish between legal and equitable property rights.

An 'equitable property right' is not truly proprietary, as it only allows the holder to have a personal action against the person who holds legal title to the property.

Quiz Content