Concepts of Equity and Trust
Equity and trust are two concepts in common law that a continental law practitioner faces with hardship to visualize. Equity can be defined as "the body of principles constituting what is fair and right; natural law."1 Despite that "equity" means natural justice in ordinary language, "originally, this system was inspired by ideas of natural justice, and that is why it acquired its name (...) and it is in fact nothing else than a particular branch of the law of England."2
The right of trust is enforceable solely in equity "to the beneficial enjoyment of property to which another person holds the legal title; a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary)."3 A trust relationship can be identified when the legal title is owned by one person (the trustee) and the beneficial interest is held by another (the beneficiary). In order to understand trust law, one would have to visualize the ownership of all property as being potentially divided. The trust provides for a legal owner to be able to deal with property for the benefit of those who cannot, or do not want to deal with it themselves.
The Three Certainties
A trust relationship requires the presence of three certainties. Firstly, certainty of intention is based on the question as to whether a trust is intended or not. Secondly, certainty of subject matter requires a property to be subject to the trust, as well as the beneficial interest to be present. Thirdly, certainty of objects asks the question: "Who are the beneficiaries of the trust?"4.
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Footnotes
1 p.579 Equity definition – 2nd meaning, Black's Law Dictionary, 8th Edition, by Bryan A. Garner, Thomson West, 2004 ("Black's Law Dictionary").
2 Glanville Williams, Learning the Law 25-26 (11th ed. 1982).
3 p.1546 Trust definition – 1st meaning, Black's Law Dictionary.
4 p.25, Equity & Trusts, Iain McDonald & Anne Street, Third Edition, Oxford University Press, 2013.
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