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24 1 An Introduction to Equity So, for example, Vernon may wish to determine what should happen to his property on his death and beyond. He may provide in his will that on his death his estate should be held on trust for the benefit of his wife, Wanda, for life, with remainder to Xerxes. This will mean that Wanda will get the benefit of the property whilst she is alive, but, on her death, the benefit will pass to Xerxes, even if Wanda would have preferred the benefit to pass to all of her three children equally. The ability to provide for consecutive interests in property is an important feature of Equity. It is possible to provide for such consecutive interests at Common Law too, but only as regards land; in Equity, this can occur as regards both land and personal property. 1.5.2 Personal rights in Equity Although the major contribution of Equity to English law has been the recognition of equitable proprietary rights, the recognition of equitable personal rights has also been of real significance to the development of the law. Probably the most significant rights are those that arise from a fiduciary relationship, which is a particular relationship be tween the principal and the fiduciary which can be characterized as one of trust and con fidence, such as the relationship of solicitor and client. 126 Fiduciaries owe their principals particular duties, which are distinct from, and additional to, the ordinary Common Law negligence standard of skill and care. In particular, fiduciaries owe their principals a duty of loyalty and self-denial. In addition to the proprietary connotations of the trust, where there is a division between legal and equitable proprietary rights, the fiduciary obliga tion is an essential characteristic of the express trust, for all express trustees owe fiduciary duties to their beneficiaries. So, for example, if a trustee misappropriates trust property for themself, the beneficiaries will be able to rely on their equitable proprietary rights and make a claim to recover the property. 127 But they will also have personal rights against the trustee for breach of fiduciary duty and the trustee may be liable either to compensate the beneficiaries for the loss that they have suffered or account for the profit that the trustee has made as a result of the breach. 128 The dividing line between proprietary and personal rights may sometimes be difficult to draw, and will depend on the particular circumstances of the case. This is particularly well illustrated by the law relating to rescission. 129 If a claimant has transferred property to the defendant pursuant to a contract that is voidable in Equity, perhaps because of non fraudulent misrepresentation or undue influence, the claimant will be able to rescind the contract in Equity and recover the property. The effect of rescission is that the defendant, who has legal title to the property, will hold that property for the claimant, who will have an equitable proprietary interest in it. In other words, the defendant will hold the property on trust for the claimant. Before the contract is rescinded, however, Equity recognizes that the claimant has a right to rescind the contract, and this right is called a ‘mere equity’. This can be defined as a right that, if exercised, will enable the claimant to recover any property that has been transferred under the contract, and so operates like a proprietary right. Consequently, the mere equity to rescind can be defeated if the property has been obtained by a third party who provided some value for it and was acting in good faith. However, this mere equity to rescind will not have any proprietary connotations where the voidable contract is executory, in the sense that the claimant has not yet transferred any property to the defendant. In such circumstances, the mere equity relates only to the personal right of the claimant to terminate their obligations under the contract. © Oxford University Press

126 See Section 15.2.1, p. 461. 128 See further Chapter 18.

127 See further Chapter 19.

129 See further Section 1.4.1(iv).2, p. 11.

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