An account of school life, and a brief description of equity and trust

I have been sitting in for lectures at law school for this semester, even though I am officially on medical leave of absence still for the semester. The modules which I have been sitting in so far are the year 2 core modules like public law, and equity and trust; modules which I did not take the exam for as I exempted myself in the middle of the semester last year. I just sat in for a family law lecture today as well which is an elective as it was coincidentally after the public law lecture in the morning. It was the second lecture for the semester and the class was going through the topic of domicile and the conflict of law in governing marriage status and divorces. Truth be told, I do enjoy sitting in for lectures and simply listening to whatever is being taught without having the pressure on me to study the subject in a exam-competitive manner. The cohort people are those of the following year, few of whom I recognize from the varsity Christian fellowship. The majority are unfamiliar to me.

 

So we were just going through a lecture on equity and trust, over the really basic concepts on defining a trust. For the unacquainted, a trust is a legal concept in law whereby certain proprietary objects like money or houses are held by a group of people called trustees appointed by a class of people called the settlers for a class of people called the beneficiaries. A common example of a trust in action is the will that is drawn up by a person to pass his estate over to his descendents as inheritance.

 

I felt that the lecturer who was teaching the subject was much clearer than the lecturer I had when I sat in for the class last year. He explains the basic concept whereas I feel that the previous lecturer I had came into the class expecting that every student had already read the materials and understood it and thus spoke in terms that rides roughshod over the basic principles. But to each student his preference. I have heard of other students saying that they learn much more from the other lecturer.

If there was any module which appears most unfamiliar to me when I first encountered it, it is equity and trust. I wasn’t able to determine simply based on the name of the module itself what the purpose of that area of law was about. But I don’t think that I should think myself as an exception in my puzzlement. After all, the trust concept is one that is only prevalent amongst common law countries like the UK, whilst civil law countries like France have only recently begun to adopt trust concepts, albeit in a ameliorated form of the conventional contractual arrangement. Why are these civil law countries so suspicious of adopting the trust concept? As I hear from my lecturer today, it is because of the complexities that the trust concept engender for the tax system. I am not exactly too sure how this is done, but the trust system can be used to circumvent taxation and other proprietary acquisition mechanisms such as requisition by creditors for bankruptcy. The lecturer was telling an anecdote where at an international conference convened with the purpose of increasing recognition of the trust concept, the British representative was asking the French representative why France was so leery of the trust concept in its legal system. The French representative curtly replied, “How many books do you guys have on tax law?” Indeed, common law jurisdictions spot voluminous tomes on tax law that can take up multiple shelves on a law library. This is so because there needs to be many exceptions to the operation of the trust system so as to prevent people from avoiding taxes. The French seeks to avoid complicating their taxation law in such a manner.

 

There are many functions apart from intestacy and wills which the trust system helps to administrate. Others, like setting up of welfare funds for employees, or the setting up of charities, also relies on the concept of the trust system for resources pooled to be used in a manner directed towards the objectives of the trust and be capable of being supervised by the legal system. A question that I have on my mind that I haven’t yet explored is how a trust concept in the legal system is superior to the contract concept is administrating such transfer of property. Perhaps it isn’t, or at least some people don’t think it is, which is why the trust concept is not prevalent in all jurisdictions.

Dilemma in a trust situation – when is it criminal breach of trust

I have been reading up on the textbook for Equity and Trust by Pearce and Stevens at my own leisure during my period of leave of absence. I do get the concept of what a trust is about, and the various variables to which the trust can be formed. Basically, a trust is a legal instrument by which a person (settlor) bequeaths the goods to a trustor who administrates how the goods is to be dealt with for a beneficiary. One instance of a trust instrument at work is a will, which specifies how the inheritance is to be given out to the heirs after a person’s death. There are variables construing the nature of a trust, such as whether it allows the trustee to allocate the goods to the beneficiaries at his own discretion (discretionary trust), or is required to follow the fixed allocation stipulated in the trust instrument (fixed trust), or has complete discretion whether he wants to allocate the goods to the beneficiaries or not.

I was having some sort of mental burnout for law school for this semester as well as the previous semester such that I was unable to conceptualize and understand anything from my reading at all. And one thing that I find myself struggling in law school is to be able to read and understand the copious amount of readings fast, and to make my own notes for the examinations. But when I read it on my own leisure, I am able to understand things eventually.

I was thinking how the law of trust would work in a scenario which I had while I was in the army. As an administrator of a course, I had to order beverages for the members of the course using an electronic online system. When the beverages of water arrive, I would store them somewhere in the office or the storeroom. My dilemma was whether I was allowed to consume the beverages, or whether that would amount to a criminal breach of trust. It seemed intuitive to me that it would be an offence if a staff would take the entire supply of beverages home for his own consumption, but what about if he just takes one or two packets from the entire provision? Would the law distinct whether the taking from the trust by the trustee for his own benefit is trivial, or will it hold the trustee absolutely to his fiduciary duties to administrate the provisions for the beneficiaries?
My understanding of the situation is a little unclear. I am not sure whether I am even miscomprehending this as a trust situation. I have been rather bad when it comes to understanding law stuff.