Statutory Trusts and Trusty Statutes

1. INTRODUCTION

Our argument here is that there are lessons for general trusts law reform from recent jurisprudence on ‘statutory trusts’.¹ By ‘statutory trusts’, we mean trusts that are provided for by statutes in specific contexts, where the idea, or ideal, of the institution of the private trust is adopted and adapted by the legislature for certain purposes. But exactly which incidents of the traditional private trust at common law (the ‘common law trust’)² are recognised may still need to be determined. We also consider authorities where it has been argued unsuccessfully that a legislative framework, while not expressly invoking a ‘trust’, nonetheless gives rise to a statutory trust.³ Lord Diplock once observed in this context:

It is no misuse of language to describe the property as being held by the trustee on a statutory trust if the qualifying adjective ‘statutory’ is understood as indicating that the trust does not bear all the indicia which characterise a trust as it was recognised by the Court of Chancery apart from statute.⁴

Here, we take in such trusts, or argued-for trusts, as have been considered in recent case law at the appellate level, across a variety of areas. The main contribution of this article is to demonstrate that statutory trusts are worthy of study in thinking about the limits and contours of trusts, and to set an agenda for further research. Our aim is thus not to offer a comprehensive list of all the different instances of such trusts, although in the next section we make some points about the kinds of statutory invocation of trusts which may be found. Rather it is to engage with the reasoning in cases analysing statutory trusts to map the terrain – a topography, rather than a typology.

We also acknowledge that these trusts do not form a monolithic legal category. Rather, through an in-depth analysis of the different kinds, we extract common themes that emerge from the cases dealing with context-specific statutorily created ‘trusts’ and the approaches to legislative trust reforms in various common law jurisdictions. In both contexts, we encounter an uneasy and uncertain relationship between the statutory form of the ‘trust’ and the common law trust;⁵ the prioritisation of pragmatism above conceptual and theoretical clarity; and a danger of losing sight of the question as to what a trust is.

2. STATUTES AND TRUSTS: INTERACTION AND AMALGAM

Former Chief Justice of Australia Robert French has argued that statutes ‘are part of the history of the law of trusts, part of its present and its future’.⁶ But setting the limits between the specifics of a statute and the general law can involve difficult line drawing – ‘at what point does the creation of a so-called statutory trust give rise to a legal and equitable chimera – a beast born of an unholy fusion?’⁷ Maitland famously remarked that he knew ‘not where to find an authoritative definition of the trust’,⁸ and we shall argue that trusts lawyers ought not to neglect the line of authorities on statutory trusts when seeking a deeper understanding of the modern common law trust and modern trust law reform.

‘Statutory’ trusts appear along a spectrum in terms of the nature and extent of legislative intervention. There may be the statutory adoption of the existing trust institution with minor amendment (such as the statutory trust for sale, although we do not consider them here);⁹ those deployed in specific contexts, as in the example of client money trusts or tax revenue protection; ‘public’ ‘trusts’ where there may be little substantive content provided beyond the fact of the asset being held on a species of trust; to targeted changes to the law of trusts (as has been the approach to reform in England and Singapore); to a legislative recasting of the trust; to comprehensive codification. It may be helpful to label the latter two forms as ‘legislated trusts’.¹⁰

We shall identify important common themes that run through the cases on statutory trusts and the trust law reform experience in various jurisdictions that have reformed their trust law recently.¹¹ Our analysis thus facilitates an understanding of the intuitions and motivations of the Legislature, trust reformers, and courts in approaching any statutory creation of trust-like institution or adaption of the private trust, as well as how they may unwittingly give rise to greater uncertainty as to both the statutory form of ‘trust’ and the common law trust. Our study is very timely in view of the prospect of reform proposals in England and Wales, as the Law Commission is committed to a project to modernise trust law.¹² Our study raises the broader question as to the expectations we should have of trust law reformers and legislators in their consideration of the direction and details of trust law reform.

Lord Briggs, the most senior of the UK Supreme Court Justices with a Chancery background, has written on the idea of such systematic trusts legislative reform as contemplated by the Law Commission and expressed some scepticism.¹³ His Lordship sought to ‘stimulate thought and debate about whether such a modernisation should travel down a route towards any kind of codification’,¹⁴ in particular, arguing that such changes as may be needed could be made by targeted legislation ‘which comes nowhere near to codification’.¹⁵ The common law of trusts, said Lord Briggs,

is a delicate and complicated balance of swings and roundabouts, snakes and ladders, worked out over centuries, within which the alteration of just one element by legislation can cause unexpected dislocation in other areas, for which the legislation makes no provision, unless (and this is a very tall order indeed) all possible consequences are thoroughly thought through and war-gamed in advance.¹⁶

As we shall show, when statutes meet the trust, the approach taken by Parliament and the courts looks less like the ‘bundle of rights’¹⁷ and more like the branded toy Mr Potato Head. It can be assembled in any which way the player prefers, adding or removing the hat, glasses, moustache and so on, with while still retaining the overall impression that it is a not just a potato but recognisably a Mr Potato Head. Similarly, the incidents and complications of a trust may be added or taken away in the statutory model. The delicacy and fine balances in the common law trust are lost in broad strokes of the draftsman whose goal is to keep legislated trust law and statutory trusts pragmatic and simple. As we see in the examples below, the invocation of a ‘trust’ in such circumstances should be regarded with caution: often it is deployed in order to confer a particular consequence of there being a trust, which amounts to the instrumental use of a trust as a device rather than meaningfully deploying the institution of the trust.

3. STATUTORY TRUSTS

3.1. Segregated Funds and Client Money

Statutory trusts have been used as ‘an important mechanism for investor protection’,¹⁸ because of the rights which follow for beneficiaries from property being held in trust. The drive behind the modern English position has been European legislation, in the form of the Markets in Financial Instruments Directives.¹⁹ The leading case has been the UK Supreme Court decision in the Lehman Brothers litigation.²⁰ As may be recalled by some readers, before entering into administration, Lehman Brothers had catastrophically failed to comply with regulatory requirements to keep client funds separate. The Supreme Court had to consider the implications of those failures with respect to remaining funds. It was necessary, said Lord Clarke, to interpret the legislation,²¹ rather than to rely ‘upon the ordinary law of trusts’.²²

The relevant legislation need not expressly use the language of a ‘statutory trust’ for a statutory trust to arise. In Vintage Bullion DMCC v MF Global Singapore Pte Ltd,²³ the Singapore Court of Appeal determined that certain amounts that had been segregated in respect of certain trading transactions were held pursuant to a statutory trust,²⁴ because that was the effect of the relevant regulations.²⁵ The legislative intent, derived from a purposive construction of the detailed provisions of the legislation and relevant speeches made at the time of the enactment of these provisions, was for the brokers and license holders to be required to use the relevant assets for the sole purpose of benefitting their client(s).²⁶ Specifically, the language of depositing monies received into a ‘trust account’, that monies received are to be treated ‘as belonging to the customer’ and the prohibition against commingling in various regulatory provisions²⁷ were said to support the apex court’s conclusion that the customers should have ‘proprietary rights’.²⁸ Even so, with respect, that does not mean that a statutory trust should arise, as these statutory obligations could point to the creation of a common law trust. If the concern was protecting the customers’ money in the event of liquidation (which was what occurred in the case), this could be achieved by giving customers priority in liquidation.²⁹ The Court went on to record that ‘a statutory trust does not necessarily bear all the indicia which characterises a common law trust’:³⁰ for instance, a statutory trust may not confer any form of beneficial ownership on the creditors.³¹ Based on the court’s preferred interpretation here, however the statutory trust found to arise under the Regulations did confer proprietary interests on the customers.³² Whilst we recognise the practical consequence of conferring proprietary interests via a statutory trust, we are less sure as to when courts may find that a statute ‘intends’ that outcome in the absence of explicit reference to a trust. In other words, what criteria are used to identify a ‘gap’ and what principles should guide the court in filling the gap?

In Lehman Bros, their Lordships similarly concurred on the importance of purposive statutory construction, but they differed as to the relevance of and deviation from the general law of trusts in carrying out the exercise of construction. Lord Walker, dissenting, accepted that the purpose of the Directives was to achieve ‘a high level of protection’ of clients’ money, but then argued that ‘[equally] it is clear that CASS 7 was intended to transpose the Directives into national law, and in doing so to make use of a basic concept of English law, the trust’.³³ The majority, on the other hand, emphasised a broader purposive approach to achieve the outcome more favourable to payors. Lord Collins commented that a trust imposed by statute ‘in the exercise of a public function’ does not necessarily ‘[bring] with it the full range of trust indicia associated with a traditional private law trust’.³⁴ The interpretation adopted by the majority in Lehman Bros is a striking example of purposive reasoning³⁵ that develops the statutory trust in a direction different from the ‘traditional private law trust’, reflecting the idea that the former is ‘capable of very great flexibility’.³⁶

More recently, the English Court of Appeal has considered the position with respect to e-money³⁷ institutions in the case of Re Ipagoo.³⁸ E-money and payment institutions have been subject to specific regulations at EU level,³⁹ and the regulatory scheme distinguishes such institutions from credit institutions such as banks. Electronic Money Institutions (‘EMIs’) cannot receive deposits or award interest. They are required to safeguard funds received in exchange for electronic money that they issue.⁴⁰ The Financial Conduct Authority argued that it was necessary to recognise a statutory trust arising out of the regulations in order to provide the requisite level of protection. Asplin LJ, for the Court of Appeal, rejected that argument, holding that the case of EMIs was ‘substantially different’.⁴¹ The MIFID regulations in Lehman Bros had expressly imposed a trust. No such wording was used in the EMRs.⁴² Rather, the framework of the regulations afforded a more targeted protection, which was only superior rights against creditors of the EMI,⁴³ not ‘insulation … in respect of everyone, including third parties [or] against the world in all circumstances’.⁴⁴

On the reading of the regulations, especially when compared to provisions concerning credit institutions, we agree that this is the right outcome and a sensible decision, especially in the light of uncertainty as to what assets any trust would attach.⁴⁵ As Jacques has put it, the legislator showed a ‘clear intention to subject EMIs to a safeguarding regime that functions as an alternative to a statutory trust’.⁴⁶ However, it is worth noting that Asplin LJ observed:

A trust would apply in circumstances other than insolvency and would have wider ramifications. Furthermore, it would create rights and remedies against third parties other than the creditors of the EMI.⁴⁷

While we support this analysis, other cases on statutory trusts show a willingness to be flexible in endeavouring to construe the ‘ramifications’ of a statutory trust. Following Ipagoo’s rejection of the regulators’ prior position, the Prudential Regulation Authority has since issued further guidance in respect of deposit protection.⁴⁸

3.2. Sui Generis, Deemed Trusts? Canada North

Canada v Canada North Group Inc⁴⁹ concerned the intersection of two statutory regimes and the creation of a deemed trust. It is relevant here because the Supreme Court of Canada was split over the relevance of the characterisation of a trust when it is the creation of a statute in a specific context. Under the Companies’ Creditors Arrangement Act RSC 1985, C C-36 (‘CCAA’), insolvent companies are able to apply to court for a restructuring through a plan of arrangement. The CCAA permits the court supervising a restructuring to authorise the incurring of particular associated costs, which may be secured by a super-priority charge (‘priming charges’) against assets of the company. In Canada North, the related companies went through a restructuring and was granted by the first instance judge several such priming charges. The company also admitted that there was a debt owed to the Crown for certain deductions and Goods and Services Tax. The Crown later sought an order that the priming charges could not take priority over the tax debt, because of a ‘deemed trust’ created in favour of the Crown by a relevant income tax legislation. The SCC had to determine whether such a priming charge could be ordered over assets that were subject to a tax claim protected by a ‘deemed trust’, which is created by s. 227(4) and (4.1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (‘ITA’). The statutory provision is somewhat labyrinthine, and so bears setting out in full, as the issue was whether, notwithstanding the statutory use of the word ‘trust’, the characteristics of the mechanism shared those of the common law trust:

(4)	Every person who deducts or withholds an amount under this Act is deemed, notwithstanding any security interest (as defined in subsection 224(1.3)) in the amount so deducted or withheld, to hold the amount separate and apart from the property of the person and from property held by any secured creditor (as defined in subsection 224(1.3)) of that person that but for the security interest would be property of the person, in trust for Her Majesty and for payment to Her Majesty in the manner and at the time provided under this Act.
(4.1)	Notwithstanding any [other provisions], where at any time an amount deemed by subsection 227(4) to be held by a person in trust for Her Majesty is not paid to Her Majesty in the manner and at the time provided under this Act, property of the person and property held by any secured creditor … of that person that but for a security interest … would be property of the person, equal in value to the amount so deemed to be held in trust is deemed
(a)	to be held, from the time the amount was deducted or withheld by the person, separate and apart from the property of the person, in trust for Her Majesty whether or not the property is subject to such a security interest, and
(b)	to form no part of the estate or property of the person from the time the amount was so deducted or withheld, whether or not the property has in fact been kept separate and apart from the estate or property of the person and whether or not the property is subject to such a security interest
	and is property beneficially owned by Her Majesty notwithstanding any security interest in such property and in the proceeds thereof, and the proceeds of such property shall be paid to the Receiver General in priority to all such security interests.

The Crown had argued that these provisions either afforded Her Majesty a proprietary interest in the relevant assets, or alternatively, created a security interest with priority over all other security interests.

The Supreme Court of Canada held that the Crown’ claim failed, although it divided 5:4 on the outcome. For the majority Côté J (joined by Wagner C.J. and Kasirer J) and Karakatsanis J (joined by Martin J) gave reasons. Côté J stated that the Court was not required ‘to exhaustively define the nature and content of the interest created’⁵⁰ by the ITA. However, the majority were satisfied that the Crown’s interest was not proprietary, despite the use of the word ‘trust’, because the ‘key attributes that allow the common law to refer to beneficial ownership as being a proprietary interest are missing’.⁵¹ The statute did not impose fiduciary obligations on the employer and the trust did not attach to a particular asset.⁵² Karakatsanis J’s concurring judgment made express reference to the ‘heated debate about whether a trust beneficiary should be thought of as an owner at all’,⁵³ and citing various leading articles on the topic.⁵⁴

However, the Court did not ‘need [to] resolve the ongoing debate’, but rather the works cited were taken to ‘belie the notion that s. 227(4.1) of the ITA, and its use of the concept of beneficial ownership, is unequivocal in meaning.’⁵⁵ There was no settled meaning of beneficial ownership at common law, and the concept was alien to Quebec civil law – federal tax statutes must operate in a way that is consistent across all Canadian provinces.⁵⁶ Instead, concluded Karakatsanis J, the ITA.

is a deemed trust interest, but beneficial ownership of deemed trust property is a manipulation of private law concepts, without settled meaning. Accordingly, the specific nature of beneficial ownership of deemed trust property must be determined in the relevant context in which it is asserted.⁵⁷

The contextual analysis of the Crown’s interest, and the extensive modifications to the features of the ‘trust’ led to the conclusion that it could not behave like a conventional interest under an express trust.⁵⁸ For the majority therefore, consideration of the nature of the private trust, and the academic debate around it, was not essential to resolving the appeal, but it still informed their analysis, because it involved identifying which incidents of a private trust the deemed trust lacked.

In a forthright dissent, Brown and Rowe JJ (with whom Abella J agreed), joined in the view that the statutory trust was not a true trust conferring rights on the beneficiary as they are to be understand at common or law or civil law.⁵⁹ But they disagreed with where that finding should lead. The dissentients argued that, since it was not a true trust, the incidents of a common law trust were ‘irrelevant’ in deciding the appeal, because the deemed trust ‘is a legal fiction, with sui generis characteristics that are described in’ the relevant sections.⁶⁰ The Justices therefore looked beyond the language of ‘trust’ at the institution specifically created by the section. So for the minority the ‘trust’ language was immaterial – instead, the focus ought to have been on the creation of a device which, properly analysed, led to ‘the inescapable conclusion that Parliament granted absolute priority to the deemed trusts’.⁶¹ As well as a dispute over the interest under the statutory trust, the dispute in Canada North also involved disagreement over the ways in which the idea of the trust could be relevant.

3.3. ‘Public’ ‘Trusts’

In this section, we examine instances of so-called public trusts, which may arise in a legislative context.⁶² Examples include the holding of land by a local authority for recreational or certain educational purposes, and challenges may arise where such land is sold (or purported to be sold) for development, especially if the existence of the trust, or its implications, are not appreciated prior to the sale.

The leading recent English case is R (Day) v Shropshire Council.⁶³ In Day, the UK Supreme Court examined statutory trusts arising in respect of recreation grounds acquired using powers under the Public Health Act 1875 or the Open Spaces Act 1906. The question for the court was the impact of a failure to comply with requirements in local government legislation⁶⁴ for the advertisement and consideration of objections before land subject to such a statutory trust can be disposed of. In Day, the land concerned was in Shrewsbury – the local Town Council had sold the land to a developer but had not appreciated that the land was indeed subject to a statutory trust for the benefit of the public, for recreational purposes. The Council argued that that statutory trust could not survive the disposal of the property to a third party (who did not have notice of the trust), even without compliance with the procedures mentioned above – it relied on the provision in s 128(2)(a) of the Local Government Act 1972, which stated that a disposal of land ‘shall not be invalid by reason that’ the relevant advertising requirement had not been complied with.

Lady Rose gave the judgment for the Supreme Court, and allowed the appeal by the local residents. The Court held that the mere transfer of land subject to the statutory trust did not bring about the trust’s extinction;⁶⁵ in addition, her Ladyship held that the rights enjoyed by the public under the statutory trust could only be extinguished if the advertisement and objections procedures were followed and complied with.⁶⁶ Those procedures were carefully designed to provide the public with the opportunity to comment on and object to any such sale. It also meant that the trust was incapable of being overreached by sale to a good faith purchaser, which could have been possible if it were a common law trust.⁶⁷ The outcome left, Lady Rose conceded, ‘a rather messy situation’,⁶⁸ but it was a mess of the Council’s making in not appreciating the existence of the trust, and not complying with the prescribed procedures.⁶⁹ Her Ladyship expressed the hope that, to avoid future such messes, councils would ‘take stock of how they acquired and now hold the pleasure grounds, public walks and open spaces that they make available to the public to enjoy’.⁷⁰

Although the appeal against the Court of Appeal’s decision was successful, Lady Rose did agree with the Court of Appeal⁷¹ that the legislation created a statutory institution that is not a trust which has the incidents of a common law trust. One must be careful, therefore, not to import into the statute concepts that are familiar from common law trusts.’⁷² Her Ladyship went further, and queried a passage from the then-current edition of Lewin on Trusts,⁷³ which had opined that, where a trust is created by statute, the general law of trusts should be regarded as responding to fill any ‘gap[s] left by the terms of the statute’,⁷⁴ unless a contrary intention appeared on the face of the statute. Lady Rose doubted this approach, both on the specific legislation – noting, for example, that there would be complications arising if the proceeds of sales of such land were held on trust, given legislative provisions concerning the use of monies by local authorities – and potentially more widely: ‘Whether it is ever appropriate to fill a gap in these statutes by importing concepts from private trust law seems to me doubtful but does not arise for decision in this case.’⁷⁵ Lady Rose did not go on to analyse the differences between a private trust and a statutory public trust in depth, nor did she explicitly accept Day’s submission that the statutory trust was ‘sui generis’.⁷⁶ Resolution of any differences was left to future negotiation and litigation.⁷⁷ But the lack of further elaboration causes great uncertainty as to the scope and content of a public trust. With the rejection of the seemingly sensible Lewin approach, an à la carte menu approach, or what we have called the Mr Potato Head method, appears to be left.

Related but distinct considerations were raised in the South Australian case of Duke Unley Pty Ltd v The Corporation of the City of Unley,⁷⁸ which also concerned local government legislation. The appellants argued that equity should be regarded as recognising a purpose trust within a statutory framework, in respect of relevant land to be used as a permanent car park. The South Australian Court of Appeal⁷⁹ observed:

In addition to equitable trusts, statutes can create statutory trusts. If a statute evinces the requisite intention, a statutory trust need not be subject to the same constraints as equitable trusts. For example, the legislature could create a trust for a purpose other than a charitable purpose or other eligible purpose recognised by equity.⁸⁰

There was no such trust expressly created by the legislation in Duke Unley, however. The appellants’ argument instead focused on the nature of the powers conferred by the relevant statute on the council, and the way in which it had exercised them in respect of the relevant property – it was such a ‘trust’ that the appellants characterised as a supposed ‘public trust’.⁸¹ The Court of Appeal held that this submission was without explicit recognition, or indeed implicit support, in the authorities:⁸² ‘equity does not recognize the existence of a public trust of the type contended by Duke’.⁸³ The only (relevant) options were an intentional trust, a constructive trust, or a statutory trust. The Court conceded that one could imagine facts where a trust could arise out of property dealings between a council and individuals in the position of the appellants, but it would have to be an intentional or constructive trust, and not a novel species.⁸⁴

Duke had sought to rely on the High Court of Australia decision (also concerning local government legislation and a car park, but with different facts) in Bathurst City Council v PWC Properties Pty Ltd.⁸⁵ In that case, the High Court acknowledged the ‘general rule’ that ‘a term such as “trust” is to be taken, unless a contrary intention appears, as having been used by the legislature in its legal and technical sense’.⁸⁶ The Court went on to hold that, in the legislation, the use of the term ‘trust’ was.

apt to include those governmental responsibilities which, whilst not imposing a trust obligation as understood in private law, may fairly be described as a “statutory trust” which bound the land and controlled what otherwise would have been the freedom of disposition enjoyed by the registered proprietor of an estate in fee simple.⁸⁷

3.4. Reflections

Taking stock of our analysis of the different types of ‘statutory trust’, the common theme is that they are not common law trusts and therefore do not bear all the incidents of one.⁸⁸ They usually arise to achieve a practical statutory objective. However, that it is not the same as a common law trust does not tell us what it is. The cases suggest that it can almost be anything. The label of ‘statutory trust’, however, dangerously misleads us into thinking that the different statutory creations form a monolithic legal concept, when in fact the variety that does not confer proprietary rights is perhaps best not to be labelled a ‘trust’ at all. Further, its conceptual distinction from a common law trust – although the precise points of distinction may vary according to the statutory context – gives rise to uncertainty as to whether the private trust paradigm should operate as a conceptual benchmark to guide the judicial interpretation of the ‘statutory trust’. Whilst we take the view that it should, the courts appear less sure. The statutory origins and practical function of the statutory trust are taken by judges as a free pass to sidestep direct engagement with theoretical underpinnings of the private trust. There is a sense that legislative creation need not be burdened by the theoretical baggage of the common law trust; and the practical utility of the statutory trust is prioritised above clarity in respect of its conceptual foundation.

The same attitude may also be observed when law reformers and legislatures engage in trust reform projects. It is to these reform efforts that we now turn.

5. LEGISLATED TRUSTS AND TRUST LAW REFORM

The Law Commission of England and Wales proposed a project entitled ‘Modernising Trust Law for a Global Britain’ as part of its Thirteenth Programme of Law Reform,⁸⁹ ‘to enhance the competitiveness of this jurisdiction’s trust services in a global market’,⁹⁰ given reforms in other jurisdictions. The Commission pointed in particular to ‘Scotland, Jersey, New Zealand and Singapore [as having] updated their trust law and been creative in maintaining a healthy trust market’.⁹¹ This project has not yet started, but the Commission remains committed to it.⁹² Exactly what ‘modernising trust law’ may involve, and what considerations would be engaged in determining a healthy trust market, are beyond the scope of our present paper, but it has been analysed elsewhere.⁹³ Of course, legislative reform may well take account of factors beyond internal private law principles, especially if the driving force behind reform is economic in nature.⁹⁴ But recent examples of similar projects from the very jurisdictions⁹⁵ mentioned by the Commission suggest that there are problems where such legislative interventions do not have sufficient regard to the internal principles from which it is intended to depart.

5.1. New Zealand

New Zealand’s own trust law reform legislation, the Trusts Act 2019 (NZ), came into force on 31 January 2021,⁹⁶ following the work of its Law Commission over the previous decade. Palmer has analysed the reforms and described them as ‘a thought-provoking example of the extent or otherwise to which common law or judge-made rules of law in a common law system can be articulated in form’.⁹⁷ The legislation defines in s.13 ‘the characteristics of an express trust’:

1. it is a fiduciary relationship in which a trustee holds or deals with trust property for the benefit of the beneficiaries or for a permitted purpose; and

2. the trustee is accountable for the way the trustee carries out the duties imposed on the trustee by law.⁹⁸

Notably, the New Zealand Law Commission (‘NZLC’) considered the debate about the nature and implications of a beneficiary’s interest under the trust, but consciously decided not to legislate on the basis of a settled view:⁹⁹

We have not endorsed one particular theory of what a trust is, but we have tried to articulate what we believe is the fair consensus. In the rare circumstances where there are debates at the edges of that consensus, we have left the resolution of those debates to the courts. For example, our proposed statement of the characteristics of a trust does not commit New Zealand to a particular theory of whether the trust confers a property interest or an interest arising from obligations.¹⁰⁰

Instead, the Commission preferred for the tension to ‘continue to be worked through in particular circumstances where the difference may have real world consequences’.¹⁰¹ The significance of this example is that the NZLC found it possible to legislate without resolving these controversies. It also framed the debate as being a straight choice between the conferral of a ‘property interest’ or an ‘interest rising from obligations’; yet the debate is more nuanced than that.¹⁰² As the responsible Commissioner, Professor McLay, later explained, the Act ‘sidesteps some more of the long-running debates of trust law. The purpose of the reform was to give practical guidance rather than complete conceptual certainty.’¹⁰³ The Act ‘should not be read as a statutory overthrow of equity, but as making modifications necessitated by the modern policy’.¹⁰⁴ Professor McLay’s comments sets up a sharp contrast between practical and theoretical and seemingly suggest that ‘complete conceptual certainty’ is not essential for the real-world operation of the trust, and cases where it is directly engaged as an issue are rare.¹⁰⁵ This claim runs contrary to the work of those jurists who are argue that their theories have meaningful implications for the substantive law. Crucially, if the task is to be left to the courts, it is our observation that judges do not seem willing or enthusiastic about resolving the ‘debates at the edges of that consensus’ on the bench.¹⁰⁶

5.2. Scotland

The Scottish Law Commission conducted a long and wide-ranging review of trusts, exploring various possible reforms. The Commission considered a legislative restatement in respect of the essentials and nature of the trust.¹⁰⁷ It identified the tension between flexibility and certainty, but argued that they were not necessarily inconsistent: ‘comprehensive statutes may be drafted that permit the courts to develop the institutions that are created in a practical manner to meet changing economic and social conditions.’¹⁰⁸ The Commission had provisionally recommended¹⁰⁹ that there be legislative endorsement of the ‘dual patrimony’ theory advanced by Reid and Gretton:¹¹⁰

It would then be clear that the principle underpins the trust in Scots law. This would bring a greater degree of coherence to the existing rules of trust law. It should also ensure that any future judicial or legislative developments should, in the first place at least, be consistent with the dual patrimony theory with the result that the law would evolve in a more rational way than in the past.¹¹¹

In its final report, the Commission, following consultation, pulled back from this recommendation, on the basis that the theory was sufficiently established such that it was not necessary to state it in legislation.¹¹² Linked to this position was the Commission’s decision not to pursue a comprehensive statutory statement of trust law.¹¹³ Scots Law, of course, has a different conception of the trust and the beneficiary does not have a proprietary interest in the trust assets.¹¹⁴ But the Scottish example is relevant here not only because it is expressly referenced by the Law Commission as one with which to engage, but also as a recent instance of a trust law reform where the nature of the trust was contemplated at one stage but omitted from the final proposal.¹¹⁵

5.3. Singapore

The Singapore Academy of Law Reform Committee¹¹⁶ has in the past two decades examined various aspects of trusts law, making recommendation for law reform. In the areas of trustees’ powers and duties,¹¹⁷ variation,¹¹⁸ and the apportionment of capital and income,¹¹⁹ the proposals have been for modified versions of the germane English legislation. Most recently, however, the Committee produced a report considering the possible enactment of non-charitable purpose trusts, with a view to ensuring that Singapore as a wealth management centre continues to meet the needs and demands of the trusts market.¹²⁰ The Committee has recommended such reform, and considered the position in competitor jurisdictions. It rejected Articles 11–14 of the Trusts (Jersey) Law 1984 as a model for Singapore, on the basis of their view that they ‘represent a codification of the law of trust’.¹²¹ Instead, the Committee drew only on comparators that make specific provision for non-charitable purpose trusts:

For our purposes, it would be advisable to avoid affirmative definitions of the trust, particularly as we continue to have divided opinions over whether the proprietary view of trusts prevails or the obligationist view.¹²²

Thus, we have another example where the reformers consider the debate over the nature of the trust as being a relevant context for deciding on the model of law reform on a point of trusts law, but not viewing it necessary to take sides on the debate.

5.4. Reflections

The models for the proposed and enacted legislation considered here have been facilitative, which is certainly one possible model for modernisation. But in considering what modern policy necessitates, questions as to the nature and architecture of the express trust will need to be considered, and a view taken. Several of these decisions arise in the statutory context, where the legislation has not specified all of the details of the trust, but where the characterisation issue may be necessary to the resolution of the specific case. The healthiness of a trust market depends upon solid foundations such as certainty for trustees, beneficiaries and third parties: that ought to include an understanding of what a beneficiary’s right is and its implications. Even courts, when dealing with a private trust at general law, are not keenly interested to fully engage with the competing theoretical accounts of equitable ownership.¹²³ This is not helped by the fact that there are accounts of the equitable interest which go beyond the traditional proprietary and obligational analyses.¹²⁴

Crucially, some of the decisions made in the cases developing the extent of rights and duties involved in the trust may be thought to be ones for the legislature. There may be limits to the extent to which one can reform or reshape the trust before what we have may no longer appear to be a trust in that it is no longer meaningful to label the statutory creature as a ‘statutory trust’, ‘legislated trust’¹²⁵ or ‘public trust’. What we have, instead, is a statutory asset partitioning or protection regime which may have some trust-like effects in specific contexts. The lesson here is not that a trusts law reform project needs to be all or nothing – either (attempted) comprehensive codification or no reform at all – for there is legitimate scepticism about the wisdom of attempting any such project.¹²⁶ Rather the lesson is that such legislation needs to take a holistic approach to the implications of any individual changes. A conscious choice to leave a point open to development by the courts is very different from the point not being appreciated in the first place.

More fundamentally, the complexities of the general law principles have an impact on the success of and approach to legislating a trust, whether it is a statutory recasting of the general trust or the enactment of a context-specific statutory trust. On the former type of endeavour, Palmer observed that New Zealand’s Trusts Act 2019, notwithstanding its objectives of ensuring clarity and accessibility and attempt to capture the law in ‘apparent black-letter’ form, ‘has not resolved some of the existing ambiguities in relation to trustee duties’.¹²⁷ The pragmatic approach of the New Zealand Law Commission in avoiding the direct engagement of underlying theoretical debates of the general law trust does not mean that these complexities and ambiguities go away once trust law is distilled into a set of statutory rules. Yet now the court is to resolve these complexities and ambiguities in an exercise that involves statutory construction, but with some uncertainty as to the degree to which the general law principles (which continue to evolve in other common law jurisdictions) remain influential on the exercise. The uncertainty arises because the legislative recasting would take the trust in a slightly different direction of development than that of the general law trust, even if much of the substantive content remains familiar, and statutes may not capture all conceptual nuances. Ultimately, it harks back to the same question that is encountered in the analysis of statutory trusts: how are the courts to interpret and develop the statutory form of trust?

6. CONCLUSIONS

Speaking of trusts reform, Professor Smith has written,

Reforms to fundamental legal institutions have to be made in a way that respects the characteristics of those institutions … But … the implementation of the desired reform must pass from policy back through law, respecting its categories and established internal logic, or problems are sure to arise.¹²⁸

In this article, we have made several points about the lessons to be learned for trusts reform. Hilliard has noted that ‘flexibility is a large part of the lifeblood of trusts’,¹²⁹ but argued that it should be ‘meaningful’ to refer to a trustee as a fiduciary in various instances. Similarly, we argue that the jurisprudence on statutory trusts reveals problems as to how ‘meaningful’ the use of the word ‘trust’ is.

We have shown that substantive judicial and reformer engagement with important arguments about the theoretical underpinning of the trust is rare. And yet decisions to reform are still taken, without a commitment to a particular view, although for example the New Zealand project is at least admirable in setting out which choices are being made, and where points are being left open. Our argument is that in such reforms, regard must be had to the ‘established internal logic’ of the trust. Departures from that logic for policy reasons should be taken with caution: where they are to occur, those departures should be deliberate and express, with regard for the extent to which coherence is being affected.¹³⁰

Similarly, where there is legislative intervention in, or adoption of, the law of trusts, it is important that there be a clear articulation of the kind of intervention, and its limits. We have seen this consideration particularly in situations where there is statutory co-option of the idea of the trust as a device for specific purposes – as noted, it is seemingly accepted as an interpretive starting point that a statutory trust does not have all the indicia (or consequences) of a common law express trust, but that still leaves open the question as to which incidents are being included, and on that question, legislation should provide more answers in such instances. The gap-filling approach, providing the elements and consequences of there being a trust arise except insofar as the statute expressly excludes or substitutes them, is the best approach.¹³¹

Indeed, legislators should consider whether invoking a ‘trust’ is necessary at all or, as with e-money cases, are there other ways of affording the desired level of protection without deploying a trusts tribute act? The selective, Mr Potato Head approach revealed here poses an obvious challenge to coherence,¹³² and to our trust in the law of trusts.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author(s).

Notes

1 Some specific instances of ‘statutory trusts’ are also referred to as ‘public trusts’, although that term must be approached with caution over different uses: see section 4 below. By ‘statutory trusts’, we mean trusts created by statute. There are of course various statutes that bear upon the rights, duties and powers where a trust arises under the general law, but that is a separate matter.

2 For convenience, we shall generally refer here to the traditional private law trust as the ‘common law trust’. In Rookwood General Cemeteries Reserve Land Manager v Attorney-General NSW [2022] NSWSC 1763, Parker J compared a ‘trust cognisable in equity in the ordinary way and a “trust” created by statute which only gives rise to statutory obligations’ (at [217]).

3 Such as Re Ipagoo LLP (In Administration) [2022] EWCA Civ 302 (below).

4 Ayerst (Inspector of Taxes) v C. & K. (Construction) Ltd [1976] AC 167, 178. See also the Irish case of In The Matter of Mouldpro International Ltd (In Liquidation) -v- The Companies Acts 1963 - 2005 [2018] IECA 88, per Whelan J at [148] ‘The statutory trust arising in a liquidation is a legal construct which confers no beneficial interest on the creditors.’

5 Whilst an easy answer that a legislator may offer is to let equity fill the statutory gaps where they arise, this simply begs the question as to when ‘statutory silence’ is a deliberate decision and when it is a gap that needs filling. This also engages the primary theme in our article: the uneasy and uncertain relationship between the statutory invocation of ‘trust’ and the common law of trusts.

6 R French, ‘Trusts and statutes’ (2015) 39 Melbourne University Law Review 629, 630. For comparative reflections on a similar theme, see the chapters in Part IV ‘Statutory Adaptation’ of YK Liew and Y-C Wu (eds), Asia-Pacific Trusts Law: volume 2 – Adaptation in Context (Hart, 2022); D Clarry, ‘Fiduciary ownership and trusts in a comparative perspective’ (2014) 63 International & Comparative Law Quarterly 901, 923–4 and A Reekie, S Reekie and K Ruengsrichaiya, ‘Legal landscape of trust law in Thailand: the fading twilight of common law trusts and the sunrise of statutory trusts’ (2021) 27 Trusts & Trustees 830.

7 French (n 6) 647.

8 FW Maitland, Equity: A Course of Lectures (rev edn, Cambridge University Press, 1936), Lecture IV, The Modern Trust, 44.

9 We exclude from analysis here more familiar examples of statutory trusts in the context of land ownership (as opposed to trusts of land for particular purposes). This is partly for reasons of space, but also because such trusts have received more scholarly attention elsewhere and want to argue that there is value in looking at the other instances we examine in what follows.

10 See ‘Legislated Trusts and Trust Law Reform’ below.

11 We do not here examine the position in the United States, but for a survey of the issues, see the Prefatory Note to the Uniform Law Commission’s Uniform Statutory Trust Entity Act 2009 (2013) and JH Langbein, ‘Mandatory Rules in the Law of Trusts’ (2004) 98 Northwestern University Law Review 1105.

12 See J Lee, R Nolan, TH Wu and M Yip, ‘Editorial’ in this issue, and also section 5 below. Law Commission, Announcement of 13th Programme of Law Reform www.lawcom.gov.uk/project/13th-programme-of-law-reform/.

13 Lord Briggs of Westbourne, ‘Does England need a Trusts Act?’ (2019) Butterworths Journal of International Banking and Financial Law 359.

14 Briggs ‘Does England need a Trusts Act?’ (n 13) 362.

15 Ibid.

16 Briggs ‘Does England need a Trusts Act?’ (n 13) 360.

17 For contemporary debate on the aptness of the ‘bundle of rights’ metaphor for understanding property, see eg J Penner, Property Rights: A Re-Examination (Oxford University Press, 20202) and J Wall, ‘Taking the Bundle of Rights Seriously’ (2019) 50 Victoria University of Wellington Law Review 733.

18 H McVea, ‘Client Money Rules and Lehman Brothers’ [2011] Lloyd’s Maritime and Commercial Law Quarterly 411, 413; see too M Hsiao, ‘Judicial reasoning in statutory trust and client money’ [2018] Conveyancer and Property Lawyer 244.

19 Directive 2004/39/EC (MIFID 1) Directive 2014/65/EU (MIFID 2)

20 In the matter of Lehman Brothers International (Europe) (In Administration) [2012] UKSC 6. See PK Staikouras, ‘A novel reasoning of the UK Supreme Court decision in Lehman Brothers: the MiFID segregation rule from the angle of financial intermediation and regulation theory’ [2014] Journal of Business Law 97.

21 In this case the rules were in the FCA-issued Client Assets Sourcebook, implementing the requirements of MIFID, particular section 7.

22 Lehman Brothers (n 20) Lord Clarke at [109].

23 [2016] SGCA 49, [2016] 4 SLR 1248 (‘Vintage Bullion’).

24 Ibid, [30] and [32].

25 The relevant regulations were the Commodity Trading Regulations 2001 and Securities and Futures (Licensing and Conduct of Business) Regulations 2004.

26 Vintage Bullion (n 23) [35].

27 Ibid, [31].

28 Ibid, [32].

29 See the discussion of Re Ipagoo LLP (n 3) below.

30 Vintage Bullion (n 23) [54].

31 Ibid, [55].

32 Ibid, [56].

33 Lehman Bros (n 20) [47].

34 Ibid, [189]. Lord Collins is using ‘public function’ to mean a function pursued in a regulated capacity, as shown by his citation in that passage of his own earlier judgment at first instance in a case involving an intervention in a solicitor’s practice by the Law Society: In re Ahmed & Co [2006] EWHC 480 (Ch).

35 L Aitken, ‘“Segregation” of funds, insolvency, and the “statutory” trust’ (2012) 128 Law Quarterly Review 497.

36 P Greenwood and R Miles, ‘In the Matter of Lehman Brothers International (Europe) (In Administration)’ (2013) 19 Trusts & Trustees 787, 793.

37 E-money is ‘electronically (including magnetically) stored monetary value as represented by a claim on the electronic money issuer which - (a) is issued on receipt of funds for the purpose of making payment transactions; (b) is accepted by a person other than the electronic money issuer; (c) is not excluded by regulation 3’, Electronic Money Regulations 2011, r 2.

38 (n 3); J Jacques, ‘E-money and trusts: a property analysis’ (2022) 138 Law Quarterly Review 605.

39 The Electronic Money Regulations 2011.

40 EMRs, r 20(1).

41 Re Ipagoo (n 3) [62].

42 Ibid.

43 Ibid, [65]–[66].

44 Ibid, [66].

45 Ibid, [80]ff.

46 Jacques (n 38) 617. Indeed, it would may be thought difficult for the drafters of European regulations to intend to invoke the trust mechanism or a trust-like mechanism in a way that would operate satisfactorily across all Member States.

47 Re Ipagoo (n 3) [66].

48 The PRA’s policy statement on Depositor Protection (PS 2/23): https://www.bankofengland.co.uk/prudential-regulation/publication/2023/march/depositor-protection. See F Snagg, G Bumpus and A Wildner, ‘Reforming the UK's e-money and payment services safeguarded funds regimes: better safe than sorry’ (2023) 5 Journal of International Banking & Financial Law 310.

49 2021 SCC 30 (‘Canada North’); for an analysis of the Court of Appeal of Alberta decision in the instant case, see RJ Wood, ‘Irresistible Force Meets Immovable Object: Canada v. Canada North Group Inc’ (2020) 63 Canadian Business Law Journal 85. Compare some of the reasoning of Glazebrook J in Jennings Roadfreight Ltd (in liquidation) v Commissioner of Inland Revenue [2014] NZSC 160, eg at [29]–[30].

50 Canada North (n 49) [38].

51 Ibid, [47].

52 Ibid, [49]–[57]. See also British Columbia v. Henfrey Samson Belair Ltd [1989] 2 SCR 24 per McLachlin J at 32 ‘the reality is that after conversion the statutory trust bears little resemblance to a true trust’.

53 Canada North (n 49) [109].

54 Those cited include DWM Waters, ‘The Nature of the Trust Beneficiary’s Interest’ (1967), 45 Canadian Bar Review 219; LD Smith, ‘Trust and Patrimony’ (2008) 38 Revue énérale de droit 379; B McFarlane and R Stevens, ‘The nature of equitable property’ (2010), 4 Journal of Equity 1; JE Penner, ‘The (True) Nature of a Beneficiary’s Equitable Proprietary Interest under a Trust’ (2014) 27 Canadian Journal of Law & Jurisprudence 473.

55 Canada North (n 49) [117].

56 Ibid, [117].

57 Ibid, [181].

58 It is also acknowledged in other common law jurisdictions that the analysis for a statutory trust differs from that of an express trust recognised in equity. In Ayerst (Inspector of Taxes) v C & K (Construction) Ltd [1976] AC 167, 178, the House of Lords said that a statutory trust ‘does not bear all the indicia which characterise a trust as it was recognised by the Court of Chancery apart from statute’. See also Vintage Bullion (n 23) [54].

59 Canada North (n 49) [182].

60 Ibid.

61 Ibid, [214].

62 For further consideration, see the valuable discussion of New Zealand trust law, including reference to purpose trusts established by the Treaty of Waitangi, in Geoff McLay, ‘Context, Custom, Change: The Making of New Zealand Trust Law’ (working draft).

63 [2023] UKSC 8; [2023] AC 955 (‘Day UKSC’).

64 ss 123(2A) and (2B) of the Local Government Act 1972.

65 Day UKSC (n 63) [57].

66 Ibid, [91] and following.

67 Ibid, [51], [88] and [92]. See also the Court of Appeal’s unease on this point: R (Day) v Shropshire Council [2020] EWCA Civ 1751, [47].

68 Day UKSC (n 63) [116].

69 Ibid.

70 Ibid, [118].

71 Day (CA) [2020] EWCA Civ 1751, [21] and [25].

72 Day UKSC, [50].

73 Lewin on Trusts 20^th edn (Sweet & Maxwell, 2020), para 7-102.

74 Ibid.

75 Day UKSC, [52].

76 Day UKSC. [51].

77 Ibid, [114].

78 [2021] SASCA 91.

79 Kelly P, Doyle JA and Blue AJA.

80 Duke Unley (n 78) [52].

81 Ibid, [57].

82 Ibid, [71].

83 Ibid, [87].

84 Ibid, [89].

85 [1998] HCA 59. Further recent consideration of statutory trusts in this context in Australia can be found in the judgments of Parker J in Rookwood (n 2), and D [2023] NSWSC 238, [168]ff.

86 Ibid, [45].

87 Ibid, [67].

88 Cf Trusts Act 2019 (NZ) ss 5(2) and 15. The legislative scope and definition of an ‘express trust’ are clearly intended to embrace trusts beyond the common law trust.

89 Law Commission, Announcement of 13th Programme of Law Reform www.lawcom.gov.uk/project/13th-programme-of-law-reform/.

90 Law Commission, Thirteenth Programme of Law Reform (2017), para. 2.24.

91 Ibid.

92 Not yet commenced projects from the Thirteenth Programme will roll over to the Fourteenth (https://www.lawcom.gov.uk/14th-programme/), although finalisation of the Fourteenth Programme has indefinitely deferred until after the next UK election: Sir Nicholas Green, ‘Update on the 14th Programme of Law Reform’ https://www.lawcom.gov.uk/update-on-the-14th-programme-of-law-reform/; J Lee, ‘“Not Time to Make a Change”? Reviewing the Rhetoric of Law Reform’ Current Legal Problems (2023) Advance Access (Open Access) 38–9.

93 Lee, ‘“Not Time to Make a Change”? Reviewing the Rhetoric of Law Reform’ (n 92), generally on the rhetoric of ‘modernisation’, and specifically on the proposed Trusts project at 16-18. See further various chapters in R Nolan, Tang HW and M Yip (eds), Trusts and Private Wealth Management: Developments and Directions (Cambridge University Press, 2022).

94 M Yip, ‘The commercial context in trust law’ [2016] Conv 347, 365.

95 See further Lee (n 92) 16-18.

96 Substantively, the statute contains two innovative features insofar as New Zealand general trust law is concerned: the setting out of mandatory and default trustee duties; and the provision of new disclosure rules. For a detailed analysis, see J Palmer, ‘The Trusts Law Legislation Project in New Zealand’ in Asia-Pacific Trusts Law: volume 2 – Adaptation in Context (n 6).

97 Palmer, (n 96) 261.

98 S. 12 of the provides that an express trust must have the characteristics in s.13, and comply with the provision in both s 14 that a sole trustee cannot be the sole beneficiary and s 15 relating to formalities. Compare the definition in Art. 2 of the Hague Trust Convention – see the discussion by Lord Collins in Akers at [99]-[102].

99 New Zealand Law Commission, R130 Review of the Law of Trusts: A Trusts Act for New Zealand (2013), paras.3.09-3.10.

100 R130 Review of the Law of Trusts (n 99) para 3.10.

101 Ibid.

102 See also Lord Burrows’ observation in Byers v Saudi National Bank [2023] UKSC 51 at [103].

103 G McLay, ‘How to read New Zealand’s new Trusts Act 2019’ (2020) 13 Journal of Equity 325, 336.

104 Ibid, 346.

105 See further G McLay, ‘Context, Custom, Change: The Making of New Zealand Trust Law’ (n 62).

106 See Section 6 below.

107 Scottish Law Commission, Supplementary and Miscellaneous Issues relating to Trust Law (DP 148, 2011), paras 1.10

108 Ibid, para 2.2

109 Scottish Law Commission, Nature and Constitution of Trusts (DP 133, 2006), para.2.26.

110 Eg K G C Reid ‘Patrimony Not Equity: the trust in Scotland’ (2000) 8 European Review of Private Law 427 and G L Gretton, ‘Trusts Without Equity’ (2000) 49 International and Comparative Law Quarterly 599; DJ Carr, ‘Equity stalling?’ (2014) 18 Edinburgh LR 388.

111 Nature and Constitution of Trusts, para.2.26

112 Scottish Law Commission, Report on Trust Law Scot Law Com No 239 (2014), para.3.4.

113 Scottish Law Commission, Report on Trust Law Scot Law Com No 239 (2014), para.1.17.

114 Sharp v Thomson 1995 SC 455, 475; DJ Carr, Ideas of Equity (Edinburgh Legal Education Trust, 2017).

115 The Bill based on the Commission’s work, the Trusts and Succession (Scotland) Bill was passed by the Scottish Parliament in 2023. D Carr, ‘A new role for the Scottish courts under a reformed trust law’ (2023) 27 Edinburgh Law Review 403, 404: ‘The Bill's coverage is wide, and it will bring about modernising change in many areas of trust law’.

116 As to the function of the Singapore Academy of Law Reform Committee, see: https://www.sal.org.sg/Resources-Tools/Law-Reform. Law reforms may be (and are often) initiated and directly driven by the Ministry of Law of Singapore.

117 Reform of Certain Aspects of the Trustees Act: A Report of the Law Reform Committee of the Singapore Academy of Law (Singapore: Singapore Academy of Law, 2003)

118 Report on Introducing a Statutory Variation of Trusts Jurisdiction (Singapore: Singapore Academy of Law, 2019).

119 Report on Total Return Investment and Classification and Apportionment for Capital and Income Trustees (Singapore: Singapore Academy of Law, 2020).

120 Report on the Enactment of Non-Charitable Purpose Trusts (Singapore: Singapore Academy of Law, 2021). Compare D Wilde, ‘Formalities for declaring trusts of land’ [2021] Conv 263, 277.

121 Non-Charitable Purpose Trusts (n 120), para 5.4. Although Article 1(2) says ‘This Law shall not be construed as a codification of laws regarding trusts, trustees and persons interested under trusts.’

122 Non-Charitable Purpose Trusts (n 120), para.5.5 Compare P Parkinson, ‘Reconceptualising the Express Trust’ (2002) 61 Cambridge Law Journal 657 at 680–1 (albeit the article predates the Singapore proposals).

123 In Akers v Samba Financial Group [2017] UKSC 6, [2017] AC 424 [5], Lord Mance cited the key literature on the nature of equitable interests and observed that there are two opposing views: a proprietary analysis or an ‘obligational’ analysis of the equitable interest. Even though parts of the judgment appeared to support a proprietary analysis, the case was ultimately resolved on a more general question that did not depend on a definitive resolution of the debate.

124 See B McFarlane and R Stevens, ‘The Nature of Equitable Property’ (2010) 4 Journal of Equity 1; S Agnew and B McFarlane, ‘The nature of trusts and the conflict of laws’ (2021) 137 Law Quarterly Review 405.

125 The question is whether a ‘legislated’ trust becomes something different from an express trust in equity.

126 See eg Briggs (n 13), although, with respect, we would not agree with Lord Briggs’ description of the New Zealand’s project as one of codification (see s 5(8) of the 2019 Act, and eg Palmer (n 96) at 246ff).

127 Palmer, ‘The Trusts Law Legislation Project in New Zealand’ (n 96) 254-255.

128 L Smith, ‘Scottish trusts in the common law’ (2013) 17 Edinburgh Law Review 283, 312-3.

129 J Hilliard, ‘The flexibility of fiduciary doctrine in trust law: how far does it stretch in practice?’ (2009) 23 Trust Law International 119, 129. See also P Matthews, ‘The place of the trust in English law and in English life’ (2013) 19 Trusts & Trustees 242, 253.

130 J Lee, ‘“Inconsiderate Alterations in our Laws”: Legislative Reversal of Supreme Court Decisions’ in J Lee (Ed), From House of Lords to Supreme Court: Judges, Jurists and the Process of Judging (Oxford, Hart Publishing, 2011) and Tang HW, ‘Equity in the age of statutes’ (2015) 9 Journal of Equity 214.

131 Compare D Waters QC, ‘The Trust in a Changed and Yet Changing World’ (2008) Journal of International Tax, Trust and Corporate Planning 205.

132 French (n 6) 649.