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1.5 Rights in Equity 21 This analysis indicates that whether the claimant pursues a proprietary or personal claim will often depend on the particular facts of the case, but a proprietary claim is gen erally more advantageous than a personal claim. It is then necessary to determine when the claimant will have a proprietary claim.

1.5.1 Proprietary rights

(i) Different rights in property Different people may have different rights in a particular piece of property. This is true re gardless of whether the rights are recognized at Common Law or in Equity. For example, Habib owns a house with a garden. He is the registered owner of the land and so has legal title to it. But other people may have rights in the land as well. For example, his wife Ida occupies the house too. The purchase money from the house was borrowed from a bank, which will have a security interest over the house to the extent of the amount borrowed; this is a mortgage. Habib rented part of the house to a friend, Jade, who has a leasehold interest. Another friend, Kamal, is allowed to live in the house and he would be licensed to live there. Lara, Habib’s next-door neighbour, is allowed to park her car on Habib’s drive and Maari has been given the right to cross Habib’s land to get to another property. So it can be seen from this example that rights in property are not confined to ownership; they also encompass possession and rights of varying kinds to use the property. The same is true of proprietary rights in Equity, but Equity is even more imaginative in its recognition of property rights. 116 Equity is able to recognize rights to assets and the use of property, but also to the value of property and rights which may arise in the future. The significance of equitable property rights is illustrated by the different rights that may arise on the creation of a trust. Imagine a situation in which Olivia wishes to create a trust for the benefit of her three children. She transfers £100,000 to Peter to hold on trust for the children. Once the money has been transferred to Peter, he will have legal title to it. It follows that, as far as the Common Law is concerned, the money belongs to Peter and nobody else will have any interest in it. But if Peter has accepted the money as being held on trust for Olivia’s children, Equity will not allow him to keep that money for him self absolutely so that he can benefit from it; it would be unconscionable if he were to do that. Consequently, Equity will recognize that the children have a proprietary right in the money. But that right will vary depending on the nature of the trust that has been created. Three different scenarios illustrate the point: (1) Peter is to hold the money on trust for the three children equally. If the children are over the age of 18 and they all agree, they can claim the money whenever they want it. 117 This is a very strong equitable property right. Peter’s function as a trustee in this case will be simply to administer the fund on behalf of the three children as they wish. This is called a bare trust. (2) Peter is to hold the money on trust for the three children equally, but this time the children are under the age of 18. Consequently, Peter will be required to administer the prop erty in the best interests of the children, but they will have no say in the administration of the property. Here, the property rights of the children are not as strong, in that they cannot call for the transfer of legal title whenever they like, although it is clear that they each have a one third interest in the property. This is a fixed express trust. © Oxford University Press

116 See further Section 2.9, p. 40.

117 See Section 11.4.1, p. 377.

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