REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
OBJECTIVES NOTES: UNIT 2- MANUAL ONE
OWNERSHIP CONCEPTS
1
Important ownership aspects

Title = ascertaining that, where property purchased, seller, A, is owner & entitled to
sell to B &, where A original owner no problem but, in other cases, B needs to trace
back to original owner, C, & see that A’s title lawfully derived from C;, position
eased if universal registration existed but such systems relate only to land & shares,
so possession important, albeit not conclusive, based on “possession vaut titre” (=
possession is 9/10ths of the law) but note difference between actual possession &
right to possession – e.g. where A has lawful possession, has both actual possession
& right to same but if B unlawfully deposed A, A, has lost actual possession but
retains such right which, if proved, enables A to recover property from B.
Beneficial ownership empowers owner to ‘deal’ with property (e.g. derive income,
manage it & dispose of it) & may exist separately from title such as where (i) trustee
has title but beneficiary has absolute beneficial interest in property; or (ii)
landowner grants long lease to tenant for peppercorn rent (= no real rent at all).

Whether person ‘owns’ land
2


3
When A buys house, at law, neither house nor land owned but in fact = estate in
the land, so, whilst property is 3-D, estate concept = 4th dimension - time, since
land was held OF the Crown & what was owned = slice of time or estate in land
(Walsingham’s Case (1573)) so between owner & land, legal ownership concept =
estate & from this several can ‘own’ land concurrently where owner may create
other estates in it, provided for shorter period where Owner 1 has largest estate
possible, creates for Owner 2 new but shorter estate (e.g. lease) giving O2 right of
occupation for specific period in return for rent so O1 = landlord & O2 = tenant both Os have estates in land with concurrent interests.
Estates notion provides flexibility since, owner could also fragment estate by
cutting it into smaller slices in favour as others – e.g. A gives his estate to B for
B’s lifetime, then C for his &, finally, what is left post-B & C’s death goes to D settlement where one estate divided into 3.
Ownership of personalty

4
Estates don’t apply to personalty (i.e. all non-land assets) where what is owned is
thing itself (e.g. with bank a/c, a/c itself owned, not estate in a/c).
Trusts in outline

5
Trust = Useful legal property ownership mechanisms - E.g. A wishes land on death
to pass to child B but B very young & not apt that should have responsibility so
young for property management so A can leave land to C (& others) as trustees to
hold on trust for B where C is responsible for such management for B’s benefit.
Meaning of tenure

Post-11th century Norman conquest, land considered as King’s who, in return for
loyalty/ service, allocated land (i.e. tenures) to main supporters & remained
paramount lord with those holding land directly of him through such tenures being
known as tenants in chief who would, in turn, and for similar consideration, allocate
Page 1
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
some of their land to those who supported them so tenants in chief were lords as
well as tenants & further tiers created below by giving lands to others
(subinfuedation) proceeding downwards to actual occupiers so each man’s
immediate superior was his mesne (= intermediate) lord;
Lord/ tenant relationships initially/ essentially personal where, in return for lord’s
protection & land grant, tenant had service provision duty which, if breached,
enabled lord to retake possession &, whilst if no breaches, relationship limited to
tenant’s lifetime, possibility tenancy might pass to tenant’s heirs but wasn’t
guaranteed & depended entirely on acceptance by lord;
Services various - knight service, agricultural services (socage) or personal services
to King (sergeanty) - & where duties not fixed, tenure unfree whilst those with
fixed duties were free tenants from which freehold derived – land held in return for
services of free nature & personal relationship nature made it questionable whether
tenants could dispose of or will rights but became accepted could so do, especially
since eventually services became replaced by financial payments (quit rents) which
in inflationary times lost value to extent ceased to be worth collecting & over time
entitlement to possession developed into freedom of land control approaching
current ownership concepts but in early days not seen that either lords or tenants
were owners – it was only King who was not tenant;
Early land law feudal/ pyramid-like, base being land occupiers (tenants in demesne)
above which were overlords (mesne lords) who received & rendered services & all
‘topped’ at apex by King who received services from immediate tenants (tenants in
chief) so, defacto land owner, he who had property rights of use/ abuse, cultivation/
non-cultivation & exclude others, held land of the King either (i) immediately of
King where only he & King had rights; or (ii) mediately with others between him &
King & he at lower end of scale most likely to be owner with general right of
dealing with it as saw fit & held land in demesne (= possession as one’s own);
Following service replacement by payment & value erosion of same, lords’ tenure
advantage became solely right to attached incidents (e.g. of wardship – right to
manage for profit land of deceased tenant with under age heir) & such incidents
valuable rights lords wished to protect but, by 13th century, accepted tenants could
alienate (= transfer from one to another) holdings (e.g. by subinfuedation) which
threatened incidents & pre-1290, A, holding land of B, could transfer land either (i)
by making C substitute so C becomes B’s tenant which not change B’s position
since wardship right remained undisturbed; or (ii) if A made C tenant in return for
money & limited value service, A remained B’s tenant &, on A’s death, B right was
to service more than likely worthless, so Statute of Quia Emptores (= whereas
purchasers) 1290 prescribed that, whilst freemen can lawfully sell lands, was
prohibited to do so by subinfuedation - post-1290 tenants wishing to sell could only
do so by providing substitute tenants &, in consequence, pyramid ceased to grow &
now nearly all land held by tenants in chief technically holding it of Crown,
becoming principal incidents of tenure beneficiary until Tenures Abolition Act 1660
(i) disposed of most of incidents; & (ii) converted knights service & grand sergeanty
tenures into common socage, leaving this & copyhold as sole tenures available &
by Law of Property Act 1925, copyhold converted into common socage as from
01/01/1926 leaving today one tenure only – free tenure of common socage, but land
ownership not now described as holding by such free tenure but freehold tenure so
although ‘tenure’ still used & remains that freehold land held directly or indirectly
of Crown, doctrine of tenure as such no longer of current importance.




Meaning/ examples of ‘estate’
6

Estate as concept relates to time – period during which A holds land - & possible
estates are (i) Life: where A holds estate for lifetime, may dispose of it but only
Page 2
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES

for such period so if he transfers to B, B only acquires estate lasting until A’s
death since A can’t transfer interests > he holds due to nemo dat quod non habet
(= you can’t give what you don’t have) so B’s interest = an estate pur autre vie (=
estate that lasts for that other’s lifetime; (ii) Fee simple: largest estate possible –
capable of indefinite duration where A grants estate to B and B’s heirs &, whilst
appears to mean on B’s death, property passes to B’s heir & then so on
successively, not been so interp but has been treated to refer to length of B’s estate
– will endure for so long as there existed person who could claim to be heir as
opposed to giving property rights to such heirs &, whilst might seem that, should
B then transfer estate to C, would only last whilst B’s heirs remained alive, but,
again, not been so treated but time span now with reference to C’s heirs & C’s
estate lasts as long as there is someone alive claiming to be his heir so fee simple
can last indefinitely – ‘for ever’ estate; & (iii) Fee tail: in fee simple no restriction
on heir classes, so searches for heirs not restricted to children, grandchildren etc
but encompasses descendants, ascendants & collaterals, so heirs may be found
also in parents, siblings etc; but fee tail (from Latin talliatum & French taille = cut
down) restricts classes to, say, B and heirs of his body, cutting down time span
passing on transfer - estate endures only whilst lineal descendant of B can be
found so B receives less than fee simple & estate endures only to extent that B’s
descendants survive so A, original grantor, retained part of fee simple;
Where B wishes to sell estates in fee tail, buyer, C, would not know how long the
estate would last so law recognises that fee tails MAY be converted to fees
simple, process = barring entail & where this is unsuccessful result = base fee so
proprietary land rights are on plane of time & are subject to restrictions re quantity
& duration where life tenancy rights are finite, but fee-tenant’s rights are infinite/
potentially infinite.
Meaning of ‘in possession’, ‘in remainder’ & ‘in reversion’
7



Fee simple = greatest land right possible, so A can grant B &/ or others life or fee
tail estates where A not divested entire interest but carved from estate lesser
estates, giving B, say, life interest in possession & A fee simple absolute in
reversion, in that, when determined (i.e. terminate) in future, A or successors will
then get back a fee simple so A loses current enjoyment but retains future interest
of such enjoyment, albeit date of which uncertain;
Holding present enjoyment right = estate in possession but not restricted to physical
possession (e.g. A may have granted lease to B who has estate in possession) but A
remains entitled to present enjoyment (e.g. receiving rent from B since
s.205(1)(xix) Law of Property Act 1925 prescribes possession includes receipt of/
right to receive rent/ profits) so still retains fee absolute in possession & by carving
out lesser estates from fee simple = A also retains reversion of such fee - may have
parted with present enjoyment rights but not entire bundle of rights because interest
granted is lesser one which will become determined at some future & possibly
indeterminate time when reversion will come into possession but where lease
grants involved, reversion to be distinguished from where life grant given since that
involves A giving B slice of A’s estate, whereas B’s lease excludes A from
physical possession but A retains entire estate & has, at law, created another but
leasehold estate running parallel to it for fixed period;
So where life estate granted, A’s enjoyment of fee simple postponed until B’s death
so A’s interest in reversion & B has enjoyment right during lifetime & current
interest in possession; but, where leasehold estate granted, during lease period A
retains fee simple in possession but has ‘swapped’ physical possession for right to
receive rent so may also be described as having freehold reversion since on lease
Page 3
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES

8
expiry physical reversion reverts to him & B, during lease period, has leasehold
estate giving physical possession right coupled with rent paying obligation.
Where A transfers fee simple to B for life & on B’s death then to C in fee simple, A
no longer has any estate, B has present enjoyment right (i.e. in possession) & C has
interest in remainder – will enjoy fee simple at some future date on B’s death.
Vested & Contingent

Interest vested where grantee ascertainable & entitlement subject to no condition
precedent other than normal termination of existing prior interests & such interest
not subject to any contingencies/ conditions relating to grantee’s entitlement
starting & interests can be vested in possession, in interest or contingent such as
where A grants estate for B for life, for remainder to C for life & further remainder
to D in fee simple on D achieving a certain age or other event so, at date of grant:
(i) B has equitable life interest vested in possession – right to immediate possession
not excluded by any other’s prior entitlement; (ii) C has life interest vested in
interest –excluded from immediate possession solely by B’s life interest & his
interest not contingent since inception not dependent on any qualification set by A
but delay in starting matter of time (i.e. B’s life) rather than contingency; (iii) but
D’s fee remainder delayed not only by time but by qualification A set &, even on B
& C’s death, entitlement can only start if & when prescribed event occurs so
interest is contingent -has no estate at grant date but merely hope of acquiring one
but if & when contingency achieved, then has vested interest – if B & C still alive
vested in interest but if have died in possession.
Equity’s contribution to property law
9


10
Common law over-rigidity/ unnecessarily intricate procedures with remedies limited
to damages didn’t assist claimants who wished to prevent others infringing rights
but such claimants could petition King/ LC so, from this, alternative law source,
equity, developed - more flexible than common law – being based on doing justice
between parties – offering wider remedies (e.g. injunctions);
Middle-Ages example = nobleman, A, embarking on crusades & anxious that
young child, B, should be looked after & estates managed whilst A, was away &,
through equity A could employ a ‘use’ (from which trusts have developed) whereby
lands were conveyed to C, feofee or trustee, to hold for use of B, cestui que use or
beneficiary where, at law, C was legal owner with full such rights so if he acted for
himself to B’s detriment, B had no redress at common law which recognised only
C’s rights but became possible, through equity, to enforce trust against C & to
compel him to hold land for B’s benefit.
Trust development


In time, acknowledged that beneficiaries, having been provided with beneficial
rights, were effectively true owners & were regarded (in equity alone) as equitable
(i.e. beneficial) owners holding equitable estate whilst at same time trustees
(normally 2 to keep checks on each other) were legal owners holding legal estate &
from such simple structure, equity also recognised that, as at common law, trusts
can create succession of interests such as A giving a legal fee simple to T1 & T2 to
hold for B for life & then to C in fee tail where T1 & T2 are owners at law on trust
for B & C & B & C have equitable interests only.
Trustees have legal ownership & rights but equity imposes on them duty to exercise
such rights in beneficiaries’ best interests & where duty breached, beneficiaries had
right of action in Court of Chancery.
Page 4
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
Whether equitable interests bind 3rd party trust property recipients
11







12
Where A transferred land to B on trust for C but, in breach of duty to act in C’s
best interests, B passed land to D, C could act against B but right of limited value
especially if (i) B had no money; &/ or (ii), C’s main aim was to recover land so,
initially ,beneficiaries had rights against trustees but not against 3rd parties but, in
time, equity permitted action against certain parties who wrongfully received
trust property – i.e. C could require D to transfer land to C & until such done D
held it on trust for C;
D received land subject to trust &, where such receipt was gift, D lost nothing
but, where D had paid for land & was unaware of C’s interest, meant innocent
purchasers of legal estates took subject to enforcement of equitable beneficiaries
interests & could not be sure ever safe to buy land or personalty – risk of a sale to
them in breach of trust meant would be bound by equitable interest of which had
no knowledge so, in time, equity established that bona fide purchaser for value of
legal interest unaware of equitable interest, would take land free of it – such
buyers = ‘equity’s darling.
For purchaser to take free of trust, must be purchaser within legal meaning which
includes everyday understanding of buyer, act in good faith, without fraud, have
given consideration (e.g. bought land – i.e. must be value), have bought legal
estate (e.g. legal fee simple), & have taken land without notice of beneficiary’s
interest - all conditions must be met & absence of any = taking land subject to
beneficiary’s interest;
Notice includes constructive notice: those things buyer would have discovered
had he made enquiries reasonable prudent person would have made &, if ‘closes
eyes’ & does not, say, enquire into seller’s title, has con notice of any
beneficiary’s interest & is bound by same & this extends to imputed notice –
matters which buyer’s agent (e.g. solicitor) would have discovered on proper
inquiry;
Purchasers must also inspect land to see who in occupation & where such
occupant not legal owner, purchaser should ascertain such person’s interests
therein, if any, failing which purchaser, has constructive notice of any such
interests & even where legal owner in occupation, purchaser must see whether
there are others in occupation subject to whose interests, purchaser takes land &
where A holds property on trust for himself & B, another occupier but does not
tell C, purchaser, of B’s interest, then C has constructive notice of & takes
property subject to such interest (Williams & Glyns Bank Ltd v Boland [1981]).
In summary, Rule provide (1) holders of equitable interests can enforce trust
against anyone acquiring the property other than bona fide purchaser for value of
legal estate without notice; & (ii) Such bona fide purchaser take property free of
such interest but rule refers only to equitable interests – purchasers purchasing
legal interests valid against world so holder of legal interest (e.g. a lease) more
secure than holder of equitable interest;
Onus of proving no notice falls on purchaser & if fails so to do, does not raise
issue or merely fails to attend court, then beneficiary’s claim of interest succeeds
without him having to show that purchaser took with interest, provided
beneficiary, can show that interest exists so purchaser’s burden heavy / difficult
to discharge.
Property problems pre-1925 legislation

Land ownership extensively fragmented: horizontally (trustee holding legal estate &
beneficiaries equitable), vertically where A held legal estate for life, then passed to
B in fee tail & finally to C in fee simple, or successively in equitable estate where
Page 5
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES

13
trustees hold legal estate on trust for A for life, then for B in fee tail & finally for C
in fee simple but fragmentation caused problems since land regarded as principal
wealth form to be kept in family so fragmenting settlements caused problems for
purchasers - someone wishing to buy fee simple had to acquire also each fragment
owner’s title &, where fee simple had been passed to trustees, fragmentation
affected equitable interests meaning that trustees could sell fee simple only if trust
so permitted;
Purchasers would know of trust existence from deeds & need to make inquiries to
ensure that property could be sold &, unless such carried out, buyer couldn’t claim
to be bona fide purchaser for value of legal estate & bore risk of taking subject to
beneficiary interest &, because ownership could be fragmented inquiries expensive/
time consuming, increasingly restricting 19th century industrial growth/ need for
rapid expansion of towns/ cities where complexities of many titles hindered
development but early solutions (e.g. giving powers in settlements to limited (i.e.
tenant for life) owners) not satisfactory since such powers themselves needed to be
checked but Settled Land Act 1882 conferred powers on life estate holders to deal as
absolute owners & this eventually lead to important 1925 legislation.
1925 Legislative Changes
Law of Property Act:

S.1 reduced number of estates capable of creation/ conveyance at law so now only 2
estates may be legal ones – estate in fee simple absolute in possession or terms of
years absolute (i.e. lease) - & only interests capable of existing at law = easement/
right/ privilege in/ over land for interest which = estate in fee simple absolute or
terms of years absolute; rentcharge (=annual/ other periodic sum issuing from land
other than tenancy/ lease rent or sums payable as interest) in possession issuing out
of/ charged on land either perpetual or term of years absolute; charge by legal
mortgage; any similar land charge not created by instrument; or entry rights over/ re
legal terms of years absolute/ annexed to a legal rentcharge;

All other estates/ interests = equitable ones.
Land Charges Act 1925:

Doctrine of notice impact lessened because those claiming certain proprietary
interests must protect rights through registration system & Act applies only to
‘unregistered’ titles (i.e.pre-1925 method of proving title) & radically altered way in
which ownership proved by establishing title register providing info re ownership &
proprietary interests affecting ownership - eventually registered titles will replace all
unreg ones – indeed, nowadays most titles are reg.
14
Trust concept

15
Trust comprises trustee(s), holding property (land, shares, money & life policies)
on behalf of beneficiary - so trusts can’t exist without property - where trustee has
duty to handle property in certain way (confirmed by Lords in Westdeutsche
Landesbank Girozentrale v Islington LBC [1996]);
Definitions



Settlor: creator of inter vivos (= in his lifetime) trust whereas testator = creator of
trust coming into effect on settlor’s death;
Beneficiary: those who benefit from trust;
Legal interest: he who holds legal title to trust property whilst equitable interest =
beneficiary’s interest in property;
Page 6
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES

Trust instrument: document setting down terms of express trusts & trust property =
subject of trust.
Trustee’s role/ legal ownership
16



17
Duties depend on how trust created where express trusts subject to duties laid down
by law which settlor can extend/ modify but, in general, trustees have fiduciary (=
acting loyally & in good faith) duty to act in beneficiaries’ best interests, although
where trusts resulting/ constructive, duties not so clear & may be less strict since
such persons may NOT realise are trustees;
Duties enforced by beneficiaries who can act through courts to so do but, whilst
settlor can specify duties in instrument or otherwise declare them, can’t enforce
them – such right only given to beneficiaries - although settlors can influence how
trust run provided so specify (i.e. by reserving to himself powers such as removal/
appointment of trustees) or by appointing themselves trustees;
Legal ownership devolves on trustee since holds legal title & appears to outsiders as
owner but beneficial ownership rests with beneficiary & extent of such ownership is
set out by settlor in creating trust.
Common uses of express trusts




18
Family Dispositions: whilst property owners may wish family members to receive
property/ gifts etc, outright such transfer may not always be appropriate & trusts can
be used to protect such property (e.g. successive interests passing to children on
death of final surviving spouse, discretionary trusts where no beneficiary entitled to
either specific share or to insist distribution made which enables trustees to decide,
within limits set out, entitlement as well as everyday investment/ management &
permit discretion to trustees in that current/ future beneficiary needs properly dealt
with without rigidity of pre-fixed divisions &, since beneficiaries have no
transferable ascertainable interests, protects them against bankruptcy or
improvidence – creditors can’t claim property.
Collective investments (where, through schemes, public pays money to trustees who
purchase/ manage investments & hold same on trust for subscribing individuals)
such as unit trusts, pension schemes & debentures;
Common cause trusts (e.g. disaster victims, hospital equipment) where trustees
collect public subscriptions & hold on trust to carry out stated purposes – no
ascertainable beneficiary since such persons can’t be named & where purpose
charitable, valid ( e.g. relieving poverty, sickness, educational advancement and
welfare) but where purpose not charitable, trust usually void ;
Clubs/ societies not = legal entity capable of property ownership & whilst
ownership can be vested in all members, unwieldy &, re land, not permitted since
max number of owners = four so designated members hold legal estate on trust for
all members.
Bare trust


Where sole beneficiary is sui juris (= adult with full mental capacity) & is
absolutely entitled (= unconditional entitlement), = bare trust & beneficiary has full
control so trustee must deal in accordance with beneficiary’s instructions where
such beneficiaries can demand trustees end trust & convey legal title to beneficiary
or others on such terms as beneficiary required (Saunders v Vautier (1841);
Trustee has nominal title but beneficiaries have controls as well as benefit & trusts
convert to bare trusts when B becomes absolutely entitled or where settlor
deliberately creates bare trust from start as where: (i) A wishes B, stockbroker to
Page 7
REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
deal with A’s investments whilst A away so whilst B has legal title must carry out
A’s instructions including ending trust if so directed by A; (ii) A may wish to vest
legal title in B so that B appears to be true owner (e.g. to avoid publicity) but at all
times A retains full control; or (iii) where solicitors/ other professionals handle
client monies, often for property purchase & enables solicitor to complete
transaction for client so funds are held on bare trust for that client’s benefit &, being
separate from solicitor’s own monies, cannot be claimed by solicitor’s creditors or
heirs on bankruptcy/ death.
Nature of beneficiary’s interest
19


Arguable beneficiary equitable interest = right in personam (i.e. to sue for remedy)
or right in rem (i.e. in ownership) &, unarguably, rights in personam exist since
beneficiaries can compel trustees to carry out duties as laid down &, where trustees
fail so to do, can bring action against them for compensation;
But not so clear cut that there are proprietary interests or rights in rem but such
rights may arise: (i) Assignability: where beneficiaries have power to dispose of
some/ all of trust property (e.g. bare trust or with life interest), appear to have rights
in rem & can assign equitable interest to another substituted as beneficiary but such
arrangements clearly special & doesn’t mean automatic right in rem (e.g.
discretionary trusts where beneficiaries have no disposal powers.); (ii) Where trust
property can be demanded – trust terms allow beneficiaries to compel trustees to
transfer property to them (e.g. bare trust) - also indicates rights in rem & note that
where such rights not set out possible for all beneficiaries, if adults, to join together
& demand trustees transfer property to them ending trust; (iii) Beneficiaries’
interests are proprietary in that only exist where property exists & where this ceases
& trustee not at fault, beneficiary no right against trustee – cannot sue since no
breach of trustee duty, nor can claim equitable interest unless property to which
such interest can attach; (iv) Enforceability of equitable interests against 3rd parties
= principal argument for finding rights in rem in that, where trustee transfers
property in breach of duty, beneficiary can demand its return & hold that, in
meantime, party holds property on trust for him but (1) rights in rem are
enforceable against world whereas equitable rights are not enforceable against bona
fide purchaser of legal interest for value without notice, & (2) such claims viewable
not as asserting proprietary rights but, rather, enforcement of new personal
obligations taken on by subsequent trust property recipients (i.e. restitutionary
interests; (v) Tracing = identifying & claiming back trust property, albeit that it’s
changed in form & this ability indicates rights in rem strongly - whilst stolen trust
property cannot be reclaimed from qualifying bona fide purchaser, beneficiaries can
claim that trustee’s sales proceeds therefrom = trust property in which beneficiary
has equitable interest; (iv) Trustee’s bankruptcy/ death = strongest indication
beneficiaries have rights in rem since, although trustee has legal title to trust fund,
it’s regarded as beneficiaries’ property rather than his so beneficiaries have
proprietary claim to fund (rather than merely right in personam against trustee) –
fund is preserved intact for beneficiaries & can’t be used to meet trustee’s
obligations/ debts.
Page 8