Express trusts are created to manage assets. Asset management means active asset management. Thus, the trustee is under a duty to invest trust funds rather than to simply hold them safe. Resulting or constructive trustees are usually not under a duty to invest funds as their responsibility is to transfer the property to the person entitled to it. However, they can come under a duty to invest if the period of time for which the asset is held allows investment. It has been held that a trust fund should be invested within six months, although there are occasions when funds should be invested more promptly. Failure to actively manage the trust is a breach of trust and can result in personal liability for the trustee. If a trustee under a resulting or constructive trust invests the funds, the trustee is under the same investment duties as a trustee of an express trust.

Equity recognises as property certain assets not recognised at common law, such as the beneficiary’s interest in a trust. It is also clear that property interests can be created more informally in equity than at law. One aspect of this is equity’s attitude to assignments of property. Assignments are transfers of property either for consideration or as gifts. The question whether property has been effectively assigned is of considerable commercial significance. It is not always an easy question to answer. The law of assignments stands at the intersection of common law, equity and statute. The common law developed basic rules for the transfer of property. Equity acts as a ‘gloss’ and recognises assignments in various cases where the common law would not. Many assignments are also effected by statute. So when we consider whether an assignment has been effective, we need to be able to apply law from all three sources.

The title of this chapter may look like a grab bag of remedies, but this is not the case. Specific performance and injunctions are equitable remedies. The remedy of equitable damages is a creature of statute available either in lieu of or in addition to the equitable remedies of specific performance and injunction. Thus, the three remedies are closely related. They will be discussed in turn.

Resulting trusts arise where property is disposed of in circumstances in which a provider of property does not intend to benefit the recipient. The recipient holds the property on trust for the provider. The property is said to ‘result back’ to the provider. This does not mean that the equitable interest in the property returns to the provider. What happens is that when the legal title to the property vests in the recipient, a new equitable interest is created in favour of the provider. Resulting trusts differ from express trusts in that an express trust gives effect to the settlor’s positive intention to benefit another by way of trust, whereas a resulting trust gives effect to the provider’s negative intention – an intention not to benefit the recipient. The resulting trust resembles a constructive trust in that it arises by operation of law but differs in that its imposition may be negatived by evidence of the provider’s actual intention. Resulting trusts are said to be either ‘presumed’ or ‘automatic’. Presumed resulting trusts can be rebutted by evidence that the provider of the property intended to benefit the recipient or to create an express trust in favour of a third party

Remedies evolve from the procedures that courts apply. Common law courts historically divided their decision-making functions between judge and jury; the judge defined the questions for the jury to answer, which the jury then decided. This system is still generally regarded as an acceptable method of determining criminal liability; however, randomly selected ad hoc bodies, such as juries, cannot supervise the performance of contracts, ensure compliance with injunctions, or take complex accounts. Judges, assisted by court officers, are better equipped to order these kinds of remedies, all of which require the cooperation, however reluctant, of the defendant. Equitable remedies grew out of the practice of chancellors, sitting without a jury but assisted by clerks and masters, exercising continuing supervision of matters that were sufficiently complex to require more than the parties having a ‘day in court’. One example is the very old case of Hewett v Hewett where the Court had to determine which timber on a property the plaintiff would be allowed to cut down. This matter had to be decided from time to time, for the rest of his life

Put simply, a breach of trust occurs whenever the trustee fails to perform one of the duties or obligations discussed in earlier chapters. This chapter is not, therefore, principally concerned with how a breach of trust occurs. Instead, the focus is on the consequences of a breach of trust. There are many different duties that can be breached by a trustee; the consequences that attend a breach will depend on the nature of the breach. A breach of trust does not automatically mean that the trustee must compensate the trust, in the sense that breach of a common law obligation exposes the defendant to liability for damages. First, the breach may be of a minor or merely technical nature, or may not call for relief in monetary terms. Secondly, no matter how poorly the trustee has performed his obligations, if he has not been dishonest he may be protected by a valid exculpation given by the trust instrument. Finally, it must always be borne in mind that equity’s remedies are discretionary. Courts try to give effect to the terms of the trust and will utilise the appropriate remedy to achieve that aim.

The word ‘rescission’ is ambiguous, and its various meanings must be carefully distinguished. Here, we will be discussing rescission in the sense of the process for setting aside a voidable contract and restoring the parties to their pre-contractual position. This is distinct from rescission (sometimes known as ‘repudiation’) for breach of contract, where the innocent party to a breach of contract exercises her right to terminate the contract and sue for damages or restitution of benefits conferred under the contract. The principal difference between rescission of a voidable contract and rescission for breach of a valid contract is that the former operates retrospectively, restoring both parties to their pre-contractual position, whereas rescission for breach operates prospectively, entitling both parties to enforce their accrued rights under the contract but removing any obligation to carry out the terms of the contract in the future.

Express trusts are a form of wealth management. Ownership and management of the property is split from the enjoyment of the property. In its simplest terms, the trustee manages the property but not for his own benefit. Express trusts emerged from medieval ‘uses’ of land and have been recognised and enforced in common law systems for over 700 years. They are no longer limited to land; any form of property can be held on trust. Today, the express trust is used for a wide variety of purposes, both private and commercial, where it is necessary or desirable to split management from benefit. These include: • Managing family wealth under a family trust; • Managing property for those unable to do so themselves, such as children or those under disabilities; • Group investment trusts, such as unit trusts; • Trading trusts; • Trusts set up under wills; • Superannuation trusts, which operate for the benefit of large numbers of members; and • Trusts used as security for borrowings. Many kinds of trusts are now largely regulated by statute but all are based on the equitable principles for supervising the administration of trusts.

In certain situations, equity orders the defendant to make payments to the plaintiff as a remedy for the wrong done. These are orders for the defendant to account for profits made, or pay equitable compensation to the plaintiff. These remedies impose a personal obligation on the wrongdoer to pay and do not per se attach to property. This is their disadvantage compared to proprietary remedies in the case of the defendant’s insolvency. The remedies perform substantially different tasks. We will now look at each remedy in turn.

One distinguishing feature of equitable remedies is their discretionary nature. Common law remedies accrue as of right once the plaintiff has made out her cause of action. However, equitable relief is not automatic. Equity acts to correct the defendant’s conscience and sometimes this may not lead to full recovery, or indeed any recovery, for the plaintiff. Because the court weighs factors from both the plaintiff’s and defendant’s perspectives ‘that tend towards the justice or injustice of granting the remedy that is sought’, there is some unpredictability involved in equitable remedies. There is a set of well-identified grounds that inform the court’s exercise of discretion. Because these grounds are used to reduce or deny the plaintiff’s remedy, they are often referred to as ‘equitable defences’. They are merely factors relevant to the exercise of remedial discretion. They include the doctrines of laches and acquiescence, unclean hands, and hardship to the defendant. These are by no means the only cases in which equity will deny a plaintiff a remedy. Another highly relevant matter, which is discussed in this chapter, is the effect of the order on third parties.

Much equitable doctrine concerning contract law is now covered in contract law or property law subjects. Our coverage will therefore be brief. Equitable intervention into contract law takes one of four forms: (a) Equity enforces some promises which are unenforceable at common law. It may also modify or even prevent the enforcement of promises which would otherwise be enforceable at common law. These results are principally achieved by estoppel doctrines. (b) Equity sets aside contracts where the consent of a party to the contract has been impaired or vitiated by factors such as mistake, misrepresentation, undue influence or unconscionability. (c) Equity intervenes in some cases where the contract is substantively unfair; for example, where it contains a penalty clause or a clause authorising forfeiture of property. (d) Equity provides remedies unavailable at common law (or, in the case of rescission, available on restrictive conditions) which: • enforce contracts (for example, specific performance or injunctions); • set aside contracts where consent has been vitiated (rescission); • correct contracts where they do not reflect the mutual intention of the parties (rectification).