1 In many cases the power is simply to reduce the property available, for example where a personal representative has the power to sell property left in a will to pay debts. However, in other cases the power may be to alter the property, for example in a trust fund, or to alter, take away or add to the property, for example in the case of a floating charge.

2 Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694, PC (residue) applying Lord Sudeley v. The Attorney-General [1897] A.C. 11 and Dr. Barnado's Homes v. Special Income Tax Commissioners [1921] 2 A.C. 1; Eastbourne Mutual Building Society v. Hastings Corp. [1965] 1 W.L.R. 861 (intestacy). No court seems to have considered the potential effect of section 36(2) of the Administration of Estates Act 1925, which provides that an assent of an interest in real property relates back to death.

3 Re Leigh [1970] Ch. 277.

4 Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694, 713-714.

5 Foskett v. McKeown [2001] 1 A.C. 102.

6 Lord Browne-Wilkinson, Westdeutsche Landesbank Girozentrale v. Islington BC [1996] A.C. 669, 716.

7 Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694, 713-714. See also Re Diplock [1948] 1 Ch. 465, CA in which an action was brought by next-of-kin against charities who had received funds under void gifts in a will. The action was not clearly brought on behalf of the estate but it was said at p. 522 that recovery would be for the benefit of the estate. However, the Court of Appeal also referred to the next-of-kin as having an equitable interest. See also Ayerst (Inspector of Taxes) v. C. & K. (Construction) Ltd. [1976] A.C. 167, 178, a case concerned with the winding up of a company, in which Lord Diplock compared this situation and said that executors are not beneficial owners. He seemed to suggest that beneficial ownership is in suspense, but he was concerned only with showing that beneficial ownership was not in the legal owner, not with establishing where it was.

8 There is support for this approach by Buckley J. in Lall v. Lall [1965] 1 W.L.R. 1249, 1251 where he said that the residuary legatee has some sort of interest in the totality of the assets but no particular interest in a particular asset. This suggests connotations of a floating charge and the rights to which that gives rise are discussed in detail below. There may also be recognition of this approach in Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694, 713.

9 Lords Halsbury L.C. and Herschell, Lord Sudeley v. The Attorney-General [1897] A.C. 11, 15, 18.

10 Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694, 712.

11 Eastbourne Mutual Building Society v Hastings Corp. [1965] 1 W.L.R. 861.

12 Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694, 707, 708; Re Leigh [1970] Ch. 277; Ungoed-Thomas J., Re Hayes’ WT [1971] 1 W.L.R. 758, 764; Marshall v. Kerr [1995] 1 A.C. 148, 157, 165.

13 IRC v. Hawley [1928] 1 K.B. 578, 583; Re Neeld [1962] Ch. 643, 687-688, 691. See also Lord Upjohn, Williams v. Holland [1965] 1 W.L.R. 739, 744, CA (entitled in equity subject to the claims of administration). The Law Commission has expressed doubts as to the validity of such an analysis: Law Com. No. 188, Transfer of Land: Overreaching: Beneficiaries in Occupation (1989), para. [2.16] citing with approval Parry, and Clark, , The Law of Succession, 9th ed., by Clark, J.B. (London 1988), p. 369.

14 IRC v. Hawley [1928] 1 K.B. 578.

15 Dr. Barnado's Homes v. Special Income Tax Commissioners [1921] 2 A.C. 1.

16 Administration of Estates Act 1925, s. 36(2).

17 Any purchaser from the personal representatives would be protected by statutory provisions: Law of Property Act 1925, s. 2(1)(iii), Administration of Estates Act 1925, s. 36(8).

18 The agreement may cover only the property that the survivor inherits from the deceased; it may cover the property owned by both parties at the time of the first death; or it may also include property that the survivor later acquires.

19 Re Dale (dec'd) [1994] Ch. 31 and the cases discussed therein, especially Dufour v. Pereira (1769) Dick. 419, 421.

20 Be Haggar [1930] 2 Ch. 190; Re Green [1950] 2 All E.R. 913.

21 See Dixon J., Birmingham v. Renfrew (1937) 57 C.L.R. 666, 689 as cited with approval in Be Cleaver [1981] 1 W.L.R. 939, 945-946.

22 Be Cleaver [1981] 1 W.L.R. 939, 945-947 citing with approval Birmingham v. Renfrew (1937) 57 C.L.R. 666, 682-683, 689, 690; Re Goodchild (deed) [1996] 1 W.L.R. 694, 700, 702. The existence of such a type of trust has been accepted in the area of secret trusts in Ottaway v. Norman [1972] 1 Ch. 698, 713 (where the trust may be an express trust or a court imposed constructive trust—see further Hanbury, & Martin, , Modern Equity, 16th ed., by Martin, J.E. (London 2001) p. 168) and in a case of proprietary estoppel where there was a belief in a future right (Re Basham [1986] 1 W.L.R. 1498, 1503-1504). In both cases there was reliance on mutual wills authorities. In a case of proprietary estoppel where there is a belief that the claimant will inherit property on the death of the landowner the only appropriate remedy during lifetime of the landowner would seem to be a floating trust.

23 Re Cleaver [1981] 1 W.L.R. 939, 947.

24 Birmingham v. Renfrew (1937) 57 C.L.R. 666, 689, 690.

25 Birmingham v. Renfrew (1937) 57 C.L.R. 666 would seem to suggest that this would be acceptable as it was said at p. 689 that in substance the survivor generally gets full enjoyment for his own benefit and advantage. In addition there is no doubt that the survivor was intended to be the primary beneficiary. However, others disagree. For example, Pearce, R.A. and Stevens, J., The Law of Trusts and Equitable Obligations, 2nd edn. (London 1998) suggest at p. 333 that the survivor should act in an ordinary way in accordance with his means and circumstances.

26 The courts have not suggested that he has a life interest with power of appointment of capital in his own favour, thus giving the beneficiary a defeasible reversionary interest.

27 So the primary beneficiary either gets an absolute interest (Sprange v. Barnard (1789) 2 Bro. C.C. 585) or is limited to a life interest (Re Last [1958] P. 137).

28 The cases are either ones in which the survivor was restricted to a life interest (e.g. Re Haggar [1930] 2 Ch. 190, 195) or the issue was not properly discussed (e.g. Morritt J., Re Dale (dec’d) [1994] Ch. 31, 37) or the judgment as a whole is unclear (e.g. Nourse J. in Re Cleaver [1981] 1 W.L.R. 939, 947 says equity will impose a constructive trust on the property but arguably the judge is referring to the situation once the equity crystallises though he did consider that there was sufficient certainty of subject matter. Arguably the judgment of Dixon J. in Birmingham v. Renfrew (1937) 57 C.L.R. 666 is ambivalent (see note 30 below)).

29 E.g. Underhill, and Hayton, , Law Relating to Trusts and Trustees, 14th ed., by Hayton, D.J. (London 1987), p. 44.

30 E.g. in Birmingham v. Renfrew (1937) 57 C.L.R. 666 there is reference at p. 683 to an equitable obligation and becoming a constructive trustee (Dixon J. says the obligation attaches to property, but does not say when). At p. 689 the judge refers to a floating obligation which crystallises into a trust at the survivor's death. Though he says at p. 690 that the constructive trust attaches to assets he says the survivor can enjoy the property subject to a fiduciary duty. There may also be some support in Re Cleaver [1981] 1 W.L.R. 939, 947 where Nourse J. says the trust on property is imposed when the survivor attempts to deal with the property inconsistently with the agreement. This suggests (a) there can be crystallisation before death like a floating charge but (b) before that time there are no property rights.

31 Re Haggar [1930] 2 Ch. 190.

32 Birmingham v. Renfrew (1937) 57 C.L.R. 666, 689 as cited with approval in Re Cleaver [1981] 1 W.L.R. 939, 945-946. See also Re Basham [1986] 1 W.L.R.1498 and Ottaway v. Norman [1972] 1 Ch. 698 discussed above in footnote 22.

33 See note 19 above.

34 Dufour v. Pereira, Hargrave's Juridical Arguments (1799), Vol. 2 p. 304; Re Haggar [1930] 2 Ch. 190, 195; Nourse J., Re Cleaver [1981] 1 W.L.R. 939, 947.

35 Re Goodchild (dec'd) [1996] 1 W.L.R. 694, 700, CA.

36 Dufour v. Pereira, Hargrave's Juridical Arguments (1799), Vol. 2 pp. 307-311; Gray v. Perpetual Trustee Co., Ltd. [1928] A.C. 391, 399; Dixon J., Birmingham v. Renfrew (1937) 57 C.L.R. 666, 683-689 and the cases cited therein; Re Dale (dec'd) [1994] Ch. 31. The view has been expressed in Australia that lack of writing is irrelevant even if the property includes land because the principle is ultimately based on fraud: Dixon J., Birmingham v. Renfrew at p. 690. English cases, such as Re Cleaver [1981] 1 W.L.R. 939, have concerned unwritten agreements and land with no reference to any need for writing.

37 Re Oldham [1925] 1 Ch. 75; Dixon J., Birmingham v. Renfrew (1937) 57 C.L.R. 666, 690.

38 A beneficiary could not have forced the personal representatives of the first to die to sue and, even had they been willing to, they might have been entitled only to nominal damages on the ground of having suffered no loss. It has been argued that the personal representatives could get an order for specific performance e.g. Hanbury, & Martin, , Modern Equity 16th ed., by Martin, J.E. (London 2001) p. 321, relying on Beswick v. Beswick [1968] A.C. 58.

39 See Synge v. Synge [1894] 1 Q.B. 466, 470-471, CA which concerned a party to a contract to leave property by will.

40 Schaefer v. Schuhmann [1972] A.C. 572, 586, PC.

41 Synge v. Synge [1894] 1 Q.B. 466.

42 As allowed for in section 2(5) of the Att.

43 See further Goode, R.M., Legal Problems of Credit and Security, 2nd edn., (London 1988), pp. 8485..

44 See, for example, Lord Macnaghten. Government Stock Co. v. Manila Railway [1897] A.C. 81, 86 and Illingworth v. Houldsworth [1904] A.C. 355, 358; Buckley L.J., Evans v. Rival Granite Quarries Ltd. [1910] 2 K.B. 979, 999.

45 In re Benjamin Cope & Sons, Ltd. [1914] 1 Ch. 800 (second floating charge); Taylor v. M’Keand (1880) 5 C.P.D. 358 (purchaser of goods). It seems to be assumed that they should know the disposal was outside the ordinary course of business.

46 The English & Scottish Mercantile Co., Ltd. v. Brunton [1892] 2 Q.B. 700, 707, CA; Cox v. Dublin City Distillery Co. [1906] I.R. 446. A person acquiring a later interest can take free if there is no notice of the restriction, certainly if he acquires a legal interest: The English & Scottish Mercantile Co., Ltd. v. Brunton. There are cases in which a person acquiring an equitable interest took free, but there was not only no notice of the restriction, but also the equities were not equal because of the conduct of the chargee: In re Castell & Brown, Ltd. [1898] 1 Ch. 315; In re Valletort Sanitary Steam Laundry Company, Ltd. [1903] 2 Ch. 654. There are difficult issues which arise in relation to priority over an execution creditor which it is not proposed to deal with.

47 The point is not entirely free from doubt. Goode, R.M., states, without authority, that crystallisation is not retrospective in Legal Problems of Credit and Security, 2nd ed., (London 1988), p. 50. There does seem to be support in In re Woodroffes (Musical Instruments) Ltd. [1986] 1 Ch. 366, 374 and Re Household Products Co. Ltd. (1981) 124 D.L.R. (3d) 325, 332 where it was said that crystallisation does not affect priority. On the other hand, Fletcher Moulton L.J. in Evans v. Rival Granite Quarries Ltd. [1910] 2 K.B. 979, 996 suggests that the floating charge retrospectively becomes a fixed charge.

48 This is asserted by Goode, R.M. in Legal Problems of Credit and Security, 2nd ed., (London 1988) p. 86 and must be right because the chargee has no right to resort to the property until then. There is no suggestion that the chargee could recover the property for the chargor to hold again. This must be correct as the chargor has disposed of all of his interest.

49 Nourse J., In re Woodroffes (Musical Instruments) Ltd. [1986] 1 Ch. 366, 377-378.

50 Whether a floating charge creates an immediate proprietary interest and, if so, the nature of that interest undoubtedly remains unresolved. For discussions of the issue see, in particular, E. Ferran, “Floating Charges—The Nature of the Security” [1988] C.L.J. 213 and S. Worthington, “Floating Charges—an Alternative Theory” [1994] C.L.J. 81. For further references, see the latter article at pp. 81-82. The topic has been the subject of much judicial discussion in Australia: see, for a recent illustration, Wily v. St. George Partnership Banking Ltd. (1999) 30 A.C.S.R. 204.

51 Gough, W.J., “The Floating Charge: Traditional Themes and New Directions”, in Finn, P.D. (ed.), Equity and Commercial Relationships (Sydney 1987), pp. 239, 253-254.

52 E.g. Driver v. Broad [1893] 1 Q.B. 744; Wallace v. Evershed [1899] 1 Ch. 891; Re Dawson [1915] 1 Ch. 626. However, see Agnew and Beardsley v. Commissioner of Inland Revenue [2001] UKPC 28 at para. [41], [2001] 2 A.C. 710.

53 This view has been recently revived by Worthington, S., “Floating Charges—an Alternative Theory” [1994] C.L.J. 81 and further developed in Proprietary Interests in Commercial Transactions (Oxford 1996) pp. 7886 who finds some cases in support.

54 Such as Buckley L.J., Evans v. Rival Granite Quarries Ltd. [1910] 2 K.B. 979, 999 and Agnew and Beardsley v. Commissioner of Inland Revenue [2001] UKPC 28 at para. [34], [2001] 2 A.C. 710.

55 See McLelland, M.H., “Commentary” in Finn, P.D. (ed.), Equity and Commercial Relationships (Sydney 1987), pp. 278, 283: “If a floating charge is a present security it must be a present interest in property. It is inherent in the nature of a security that it affects property. Furthermore if it affects all property within a particular class it must affect every separate item of property within that class.” He tentatively suggests analysing the rights as a contingent charge at pp. 281-282.

56 For example, Lord Macnaghten, Illingworth v. Houldsworth [1904] A.C. 355, 358 and Buckley L.J., Evans v. Rival Granite Quarries Ltd. [1910] 2 K.B. 979, 999. On the other hand, Lord Macnaghten, Government Stock Co. v. Manila Railway [1897] A.C. 81, 86 refers only to a charge which remains dormant.

57 This equity could exist from the outset, or be triggered by a wrongful disposal.

58 E.g. Nourse J., In re Woodroffes (Musical Instruments) Ltd. [1986] 1 Ch. 366, 377-378; Lord Macnaghten, Illingworth v. Houldsworth [1904] A.C. 355, 358. Cf. Buckley L.J. in Evans v. Rival Granite Quarries Ltd. [1910] 2 K.B. 979, 1002 where he says that there is no equity before crystallisation.

59 Edwards v. Jones (1836) 1 My. & Cr. 226, 235.

60 Staniland v. Willott (1852) 3 Mac. & G. 664, 679. It was actually held in the case that in the event of revocation the donee would hold the property in trust for the donor.

61 Re Korvine's Trust [1921] 1 Ch. 343, 348. A donatio mortis causa is seen as an incomplete inter vivos gift, not as a testamentary gift. Death takes away the power of revocation.

62 Williams & Glyn's Bank Ltd. v. Boland [1981] A.C. 487. The house was actually held on trust for sale with a consequant duty to sell.

63 Foskett v. McKeown [2001] 1 A.C. 102.

64 “The Nature of the Trust Beneficiary's Interest” (1967) 45 Can. Bar Rev. 219. See also Hanbury, & Martin, , Modern Equity, 16th ed., by Martin, J.E. (London 2001), pp. 1720 who sits on the fence and says the answer depends on the issue. Hayton, and Marshall, , Commentary and Cases on the Law of Trusts and Equitable Remedies, 11th ed., by Hayton, D.J. (London 2001), paras. [1]-[25] takes the view that there is an interest in each asset.

65 See the discussion of this point above in relation to the rights of a beneficiary of residue during the administration of an estate.

66 The situation seems incomparable with the administration of an estate where the courts are prepared to regard personal representatives as complete owners, because the administration of an estate will only last fora limited time.

67 No rights in particular assets though recovery of property is possible but only for the benefit of the fund. The position is distinguishable, however, because the trustees have no powers to diminish the property, only to alter it.

68 The comparison is drawn by R. Goode in “The right to trace and its impact in commercial transactions” (1976) 92 L.Q.R. 360, 529-530 and referred to in Agnew and Beardsley v. Commissioner of Inland Revenue [2001] UKPC 28 at para. [11], 2 A.C. 710. There is no need for the beneficiery to posses an uquity in individual assets because the “fund” owns the assets and the beneficiary, as part owner of the fund, can initiate actions on its behalf.

69 Vestey v. IRC (No. 2) [1979] 2 All E.R. 225, 235-236.

70 McPhail v. Doulton [1971] A.C. 424.

71 See, for example, Hanbury, & Martin, , Modern Equity, 16th ed, by Martin, J.E. (London 2001), pp. 210211.

72 Gartside v. IRC [1968] A.C. 553, 605-606; Re Weirs Settlement [1969] 1 Ch. 657; Sainsbury v. IRC [1970] Ch. 712. It is also difficult to contemplate if the class of beneficiaries is very large and they are not all identifiable.

73 Halsbury's Laws of England, 4th ed., vol. 48 para. 633 n. 9 suggests that the beneficiaries’ rights are similar to those of a residuary beneficiary under Commissioner of Stamp Duties (Queensland) v. Livingston [1965] A.C. 694. On this analysis there is no real difference between the rights of a potential beneficiary under a discretionary trust and the rights of a potential appointee under a fiduciary power of appointment. The rights of a potential appointee are only of any less value in so far as he may not be able to force the making of an appointment, although even this may be possible after Re Mettoy Pension Trustees Ltd. v. Evans [1990] 1 W.L.R. 1587.

74 London and South Western Railway Co. v. Gomm (1882) 20 Ch. D. 562, 581.

75 Spiro v. Glencrown Properties Ltd. [1991] Ch. 537, 543-544.

76 Walton J., Pritchard v. Briggs [1980] Ch. 338, 362; H.W.R. Wade (1980) 96 L.Q.R. 488, 490; Megarry, and Wade, , The Law of Real Property, 6th ed., by Harpum, C. (London 2000), paras. 12-061-12-062; Barnsley's Land Options, 2nd ed., by Castle, R., (London 1992), p. 178.

77 See the discussion of Pritchard v. Briggs [1980] Ch. 338 below.

78 [1980] Ch. 338, as applied, for example, by the Court of Appeal in Bircham & Co., Nominees (2) Ltd. v. Worrell Holdings Ltd. [2001] EWCA Civ 775, (2001) 82 P. & C.R. 427 (Case 34).

79 See Templeman and Stephenson L.JJ. at pp. 418 and 422 respectively. It was actually put in terms that the right then becomes an option. The general view is that the comments to the effect that the interest can become a proprietary interest were obiter: London & Blenheim Estates Ltd. v Ladbroke Retail Parks Ltd. [1994] 1 W.L.R .31, 38. Presumably where the right of pre-emption is activated by a contract with or conveyance to a third party the right becomes a proprietary right the moment before the contract or conveyance is effective.

80 As was the case in Pritchard v. Briggs [1980] Ch. 338.

81 Templeman and Stephenson L.JJ., Pritchard v. Briggs [1980] Ch. 338, 418, 423; Chadwick L.J., Bircham & Co., Nominees (2) Ltd. v. Worrell Holdings Ltd. [2001] EWCA Civ 775 at paras. [32] and [35], (2001) 82 P. & C.R. 427 (Case 34).

82 Tuck v. Baker [1990] 2 E.G.L.R. 195, CA.

83 Bircham & Co., Nominees (2) Ltd. v. Worrell Holdings Ltd. [2001] EWCA Civ 775, (2001) 82 P. & C.R. 427 (Case 34).

84 Templeman L.J., Pritchard v. Briggs [1980] Ch. 338, 419, discussing the grant of an option.

85 Templeman L.J., Pritchard v. Briggs [1980] Ch. 338, 418-419; Kling v. Keston Properties Ltd. (1983) 49 P. & C.R. 212; Bircham & Co., Nominees (2) Ltd. v. Worrell Holdings Ltd. [2001] EWCA Civ 775 at [36], (2001) 82 P. & C.R. 427 (Case 34).

86 The courts will prevent the sale taking place (Manchester Ship Canal Co. v. Manchester Racecourse Co. [1901] 2 Ch. 37), but arguably that should not allow the grantor to change his mind.

87 These criticisms have been recognised by the courts in London & Blenheim Estates Ltd. v. Ladbroke Retail Parks Ltd. [1994] 1 W.L.R. 31, 38 and Dear v. Reeves [2001] EWCA Civ 277 at para. [43], [2001] 3 W.L.R. 662. In the latter case the Court of Appeal expressed the view that the law may require reconsideration in the light of these criticisms.

88 Albery (1973) 89 L.Q.R. 462, 463; Wade (1980) 96 L.Q.R. 488; Megarry, & Wade, , The Law of Real Property, 6th ed., by Harpum, C. (London 2000) paras. 12-061-12-062 (as cited in Dear v. Reeves [2001] EWCA Civ 277 at paras. [32]-[33], [2001] 3 W.L.R. 662). See also Walton J., Pritchard v. Briggs [1980] Ch. 338, 362.

89 Governors of Peabody Donation Fund v. London Residuary Body (1988) 55 P. & C.R. 355, 360. On the other hand, it wss held in Gardner v. Coutts & Co. [1968] 1 W.L.R. 173 that a gift of the property will be regarded as a breach of an implied term not to act so as to defeat the right. Although the court was only asked to award damages against the grantor, the judgment suggested that the right of pre-emption would become exercisable in such a case. However, it is arguable that despite the generality of statements made at pp. 178-179 the terms of the right were important, in particular the fact that the right was exercisable not only if the grantor wanted to sell in his lifetime, but also on his death if he was still the owner. This suggests that he had no wish that anyone else should have that property. In other cases it is conceivable that the grantor would wish the property to remain in the family unless he had a need or a particular desire to sell for his own benefit.

90 Assumed to be the position in Barnsley's Land Options, 2nd ed., by R. Castle, (London 1992), p. 163 and in Law Com. No. 254, Land Registration for the Twenty-first Century: a Consultative Document (1998), para. [3.31] on the grounds this does not indicate a desire to sell.

91 Pritchard v. Briggs [1980] Ch. 338.

92 Assumed in Megarry, & Wade, , The Law of Real Property, 6th ed., by Harpum, C. (London 2000), para. [12-063].

93 Goff L.J., Pritchard v. Briggs [1980] Ch. 338, 396. Stephenson L.J. did not share these concerns—see p. 423. Perhaps the interest does not change its nature, but instead becomes a different interest—see the discussion above.

94 [1980] 1 Ch. 338, 388-389, 396.

95 For example Walton J. at first in Pritchard v. Briggs [1980] Ch. 338; Birmingham Canal Co. v. Cartwright (1879) 11 Ch. D. 421; Megarry, & Wade, , The Law of Real Property, 6th ed., by Harpum, C. (London 2000), paras. 12-061-12-063; Wade (1980) 96 L.Q.R. 488.

96 In addition, it is generally thought that the actual outcome in Pritchard v. Briggs was very unfortunate for the grantees who, having acquired the property pursuant to their right of preemption, then had to sell it to the holder of a later granted option for a sum considerably less than they paid.

97 Law Com. No. 271, Land Registration for the Twenty-first Century: a Conveyancing Revolution (2001), paras. [5.26]-[5.28].

98 Even when there is a binding agreement to sell to the third party: Manchester Ship Canal Co. v. Manchester Racecourse Co. [1901] 2 Ch. 37.

99 Gardner v. Coutts & Co. [1968] 1 W.L.R. 173.

100 See A. Everton, “Towards a Concept of Quasi-Property” [1982] Conv. 118, 181-183. Megarry, and Wade, , The Law of Real Property, 6th ed., by Harpum, C. (London 2000), para. [12-013] and Barnsley's Land Options, 2nd ed., by R. Castle (London 1992), p. 172 both find authority in support of such a remedy.

101 Which he would have if the interest were registered. See J. Martin, “The Right of Preemption: a Potential Proprietary Interest?” [1980] Conv. 433, 441442.

102 For a discussion of the extent of the courts’ discretion see S. Gardner, “The remedial discretion in proprietary estoppel” (1999) 115 L.Q.R. 438.

103 See the discussion of the cases by E. Cooke, “Estoppel and the protection of expectations” (1997) 17 L.S. 258. See also Smith, R., “How Proprietary is Proprietary Estoppel?”, Chapter 11 in Rose, F.D. (ed.) Consensus Ad Idem (London 1996), pp. 235, 239-243 discussing how wide the discretion actually is. It is not relevant for the purposes of this article whether the doctrine of proprietary estoppel is reliance based or expectation based; the important point is that in some cases the expectation of the claimant will not be fulfilled.

104 E.g. Dodsworth v. Dodsworth (1973) 228 E.G. 1115, CA; Baker v. Baker [1993] 2 F.L.R. 247, CA. This is generally so that the parties are not forced to live together or to avoid the application of the Settled Land Act 1925. The latter is no longer a problem since the Trusts of Land and Appointment of Trustees Act 1996. See also Gillett v. Holt [2001] Ch. 210, CA where the claim related to a number of properties and compensation was awarded instead of interests in some of them. The compensation may be for reliance (as in Dodsworth v. Dodsworth) or for loss of expectation in Gillett v. Holt). The latter was on because the claimant actually received an accelerated interest: he had been promised that he would inherit property on the landowner's death whereas the action was brought and the remedy awarded during his lifetime.

105 Appleby v. Cowley, The Times, 14 April 1982; Hobhouse and Roch L.JJ., Sledmore v. Dalby (1996) 72 P. & C.R. 196, 204, 207, 209.

106 Roch L.J., Sledmore v. Dalby (1996) 72 P. & C.R. 196, 204.

107 J. Willis & Son v. Willis [1986] 1 E.G.L.R. 62, CA. See also dicta in Williams v. Staite [1979] Ch. 291, 299, 300-301, CA.

108 See, for example, Inwards v. Baker [1965] 2 Q.B. 29, CA.

109 For example, by the award of the fee simple in Pascoe v. Turner [1979] 1 W.L.R. 431, CA, negative protection in Inwards v. Baker [1965] 2 Q.B. 29, CA, an encouragement to negotiate a long lease at a low rent in Griffiths v. Williams (1977) 248 E.G. 947, CA.

110 Holiday Inns Inc. v. Broadhead (1974) 232 E.G. 951 (co-ownership behind a trust for sale rather than the building lease which was now impossible. The aim was primarily for monetary compensation secured on land—see pp. 1096-1097).

111 Gillett v. Holt [2001] Ch. 210, CA. This avoided the problem that would usually occur in the case of an expectation of inheriting on death when the action is brought during the landowner's lifetime of the court needing to grant an interest which is itself floating in order that the landowner has freedom to deal with his property as he wishes during his lifetime. (See Re Basham [1986] 1 W.L.R. 1498 where the action was brought after the landowner's death, but the view was expressed that a constructive trust like the one that arises in cases of mutual wills arose during the landowner's lifetime.) Such avoidance can only work in a case like the present where the landowner owned a substantial amount of property.

112 E.g. Crabb v. Arun D.C. [1976] Ch. 179, 187-188, 192-193, CA.

113 See for example Voyce v. Voyce [1991] 62 P. & C.R. 290 in which it was made clear that the claimant was the equitable owner well before the landowner tried to evict him, and numerous dicta which state that the equity is raised by reliance on an expectation e.g. Lord Denning M.R., Crabb v. Arun D.C. [1976] Ch. 179, 188. It has been suggested that the right arises only when the owner of the property seeks to enforce his strict legal rights unconscionably (Gray, K. and Gray, S.F., Elements of Land Law, 3rd ed., (London 2001), p. 773) but there is little authority in support of this and it would be inconsistent with the cases in which an equity has been asserted against successors in title—on Gray's view the equity would not have existed when they acquired the land so it is difficult to see how it could later be asserted against them. P Milne, “Proprietary estoppel, purchasers and mortgagees: an alternative approach” (1997) 5 Web J.C.L.I. suggests that the equity only arises when it would be unconscionable for the landowner to assert his strict rights but arguably if that requires something other than fulfilment of the requirements of proprietary estoppel it is too vague.

114 In Appleby v. Cowley, The Times, 14 April 1982 the court was not prepared to say whether the decision was based on a failure to establish proprietary estoppel or a refusal to grant a remedy. However, it is clear that the court would have granted a remedy had the action been brought shortly after the reliance. In Sledmore v. Dalby (1996) 72 P. & C.R. 196, 209 Hobhouse L.J. referred to the equity being long exhausted and there being no estoppel. Roch L.J. was less clear: at p. 204 he referred to it being no longer inequitable for the landowner to enforce his rights whereas at p. 205 he referred to the minimum equity to do justice as an equity which has now expired.

115 Roch L.J., Sledmore v. Dalby (1996) 72 P. & C.R. 196, 204. This case has been criticised by J.E. Adams [1997] Conv. 458, 463-464. A similar notion of an equity that may fluctuate over time is put forward by P. Milne, “Proprietary estoppel, purchasers and mortgagees: an alternative approach” (1997) 5 Web J.C.L.I. in the context of an argument the equity only arises when it would be unconscionable for the landowner to assert his rights.

116 See Megarry, and Wade, , The Law of Real Property, 6th ed., by Harpum, C. (London 2000), para. [13]-[028]. There has been much academic discussion. See, for example, Gray, K. and Gray, S.F., Elements of Land Law, 3rd ed., (London 2001), pp. 10211024; G. Battersby, “Contractual and Estoppel Licences as Proprietary Interests in Land” [1991] Conv. 36, 45; D.J. Hayton, “Developing the Law of Trusts for the 21st Century” (1990) 106 L.Q.R. 87, 97; P. Ferguson “Constructive trusts—a note of caution” (1993) 109 L.Q.R. 114, 121-123.

117 United Bank of Kuwait plc v. Sahib [1997] Ch. 107, 142, CA.

118 Dillon L.J., Voyce v. Voyce (1991) 62 P. & C.R. 290, 294; Nourse L.J., Sen v. Headley [1991] Ch. 425, 439 440; Birmingham Midshires Mortgage Services Ltd. v. Sabherwal (2000) 80 P. & C.R. 256, 262.

119 Dodsworth v. Dodsworth (1973) 228 E.G. 1115, CA (personal representatives); Greasley v. Cooke [1980] 1 W.L.R. 1306 (heirs); Sledmore v. Dalby (1996) 72 P & C.R. 196 (donee). The authority in favour of purchasers being bound is less strong (see, for example, the criticisms of E.R. Ives Investments Ltd. v. High [1967] 2 Q.B. 379, CA by G. Battersby, “Contractual and Estoppel Licences as Proprietary Interests in Land” [1991] Conv. 36, 39-41 and in United Bank of Kuwait plc v. Sahib [1997] Ch. 107, 142) but nonetheless exists (see S. Baughen, “Estoppels over land and third parties. An open question?” (1994) 14 L.S. 147, 148-151 for a discussion of the pre-1926 authority and see also the collection of authorities by Smith, R., “How Proprietary is Proprietary Estoppel?”, Chapter 11 in Rose, F.D. (ed.), Consensus Ad Idem (London 1996), pp. 235, 237-238) and is accepted as probably determinative: Morritt L.J., Lloyds Bank plc v. Carrick [1996] 4 All E.R. 630, 642. See also Roch L.J., Sledmore v. Dalby (1996) 72 P. & C.R. 196, 201.

120 It will have to be equitable because of the lack of formalities.

121 Re Basham [1986] 1 W.L.R. 1498, 1509; Nourse L.J., Sen v. Headley [1991] Ch. 425, 439-440. Comments in Birmingham Midshires Mortgage Services Ltd. v. Sabherwal (2000) 80 P. & C.R. 256, 262 also seem to support this approach where it is said that the claimant would get equitable rights of a proprietary nature although these would be more precarious than the rights acquired under a resulting trust. There would also seem to be some unarticulated support in the cases in which the remedy granted by the court was a declaration which recognised that the claimant already had the interest in the property: Duke of Devonshire v. Eglin (1851) 14 Beav. 530; Unity Joint Stock Mutual Banking Assocn. v. King (1858) 25 Beav. 72; Plimmer v. Mayor of Wellington (1884) 9 App. Cas. 699; Holiday Inns Inc. v. Broadhead (1974) 232 E.G. 951 (where the interest granted was different from that expected); Pascoe v. Turner [1979] 1 W.L.R. 431, CA; Greasley v. Cooke [1980] 1 W.L.R. 1306, CA; Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. [1982] Q.B. 133.

122 See the discussion above at text to notes 114-115.

123 There may be support by Dillon L.J. in Voyce v. Voyce (1991) 62 P. & C.R. 290, 294 but it is not entirely clear.

124 E.g. Griffiths v. Williams (1978) 248 E.G. 947, 949; Williams v. Staite [1979] Ch. 291, 300–301.

125 Inwards v. Baker [1965] 2 Q.B. 29, CA.

126 “Constructive Trusts—a Note of Caution” (1993) 109 L.Q.R. 114, 122.

127 Lord Denning M.R. in Crabb v. Arun DC [1976] Ch. 179, 188, in Greasley v. Cooke [1980] 1 W.L.R. 1306, 1311, in E.R. Ives Investments Ltd. v. High [1967] 2 Q.B. 379, 394, 395; Scarman L.J. in Crabb v. Arun DC [1976] Ch. 179, 192-193; Danckwerts L.J. in Inwards v. Baker [1965] 2 Q.B. 29, 38 cited by himself in E.R. Ives Investments Ltd. v. High at p. 400; Winn L.J. in E.R. Ives Investments Ltd. v. High at p. 405; Griffiths v. Williams (1978) 248 E. G. 947, 949. See also Smith, R., “How Proprietary is Proprietary Estoppel?”, Chapter 11 in Rose, F. D. (ed.), Consensus Ad Idem, (London 1996), pp. 235, 244.

128 S. Baughen, “Estoppels over land and third parties. An open question?” (1994) 14 L.S. 147, 154 suggests it is too inchoate to be an equitable interest and analyses it as a mere equity coupled with whatever estate or interest the court chooses to grant. However, it would then be purely a personal equity if the court chose not to grant a proprietary interest. This issue is discussed further below.

129 Williams v. Staite [1979] Ch. 291, CA suggests it does not as a purchaser was considered bound by an equity to stay awarded in earlier proceedings.

130 As for example in Inwards v. Baker [1965] 2 Q.B. 29, although such a result is much less common now.

131 Baker v. Baker [1993] 2 F.L.R. 247; Wayling v. Jones (1995) 69 P. & C.R. 170, CA. This was also the effective outcome in Holiday Inns Inc. v. Broadhead (1974) 232 E.G. 951.

132 Wayling v. Jones (1995) 69 P. & C.R. 170, CA. This was not on the basis of tracing: see Balcombe L.J. at p. 175 confirming the decision of the judge. See also C.J. Davis [1995] Conv. 409, 413-414.

133 C.J. Davis [1995] Conv. 409, 413-414.

134 Compensation would probably have been inadequate in cases such as Crabb v. Arun DC [1976] Ch. 179 and E.R. Ives Investments Ltd. v. High [1967] 2 Q.B. 379. In other cases, such as those where the expectation is of inheriting another's estate, compensation may well be adequate.

135 Although, as P. Critchley points out in “A via media for estoppel and third parties” [1998] Conv. 502, 507 the purchaser may still lose the costs of the action.

136 Birmingham Midshires Mortgage Services Ltd. v. Sabherwal (2000) 80 P. & C.R. 256.

137 Law Com. No. 271, Land Registration for the Twenty-first Century: a Conveyancing Revolution (2001), para. [5.31].

138 See Hanbury, & Martin, , Modern Equity, 16th ed., by Martin, J.E. (London 2001), p. 716. Proprietary estoppel may be a situation where the courts enforce the expectation unless there is a good reason otherwise, but, by contrast with enforcement of a contract, there are a lot of factors that may justify non-enforcement.

139 Walsh v. Lonsdale (1882) 21 Ch. D. 9, 14-15; Oughtred v. IRC [1960] A.C. 206, 227; Neville v. Wilson [1997] Ch. 144, CA; Lloyds Bank plc v. Carrick [1996] 4 All E.R. 630, 637, CA.

140 Lord Radcliffe, Oughtred v. IRC [1960] A.C. 206, 227. The actual availability of specific performance seems not to be questioned: see S. Gardner, “Equity, Estate Contracts and the Judicature Acts: Walsh v. Lonsdale Revisited” (1987) 7 O.J.L.S. 60, 68 et seq.

141 Once full consideration has been paid it seems that the vendor holds on a bare trust for the purchaser and the latter's rights are no longer dependent on specific performance: Bridges v. Mees [1957] Ch. 475, 484; Morritt L.J., Lloyds Bank plc v. Carrick [1996] 4 All E.R. 630, 637, 638, 641.

142 See the analysis of the cases by S. Gardner, “Equity, Estate Contracts and the Judicature Acts: Walsh v. Lonsdale Revisited” (1987) 7 O.J.L.S. 60, 70-73.

143 Under Law of Property Act 1925, s. 2(1).

144 Or a transferee of registered land or a legal estate therein for valuable consideration under Land Registration Act 1925, ss. 20, 23 where relevant.

145 The proceeds of sale of the original property or anything bought with those proceeds of sale.

146 Lords Browne-Wilkinson, Hoffmann, Hope and Millett, Foskett v. McKeown [2001] 1 A.C. 102, 108-109, 115, 118, 127-129. Their Lordships were consequently of the view that there is no discretion in the courts as to whether a remedy is available. However, Lord Browne-Wilkinson at p. 109 does suggest that fairness may be a relevant consideration in the case of money spent on the property of another. It is not clear how. It said there might be no proprietary interest if it would be unfair—is that because tracing is impossible or because a defence is available?

147 This is certainly true where the money was used by an innocent volunteer: Foskett v. McKeown [1997] 3 All E.R. 392, CA and Lord Browne-Wilkinson [2001] 1 A.C. 102, 109. It may also be the only remedy available against a wrongdoer: see the comments by Sir Richard Scott V.-C. and Hobhouse L.J. in the Court of Appeal at pp. 404, 415-416.

148 There may also be a choice of properties. For example, if a wrongdoer mixes the claimant's money with his own in a bank account and then makes withdrawals to purchase assets the claimant may have a choice between the assets bought orany money remaining in the account, though the point is not settled. See Hanbury, & Martin, , Modern Equity, 16th ed., by Martin, J.E. (London 2001), pp. 694695. Generally there will not be an option because the original property, and perhaps its original substitutes, will have been acquired by someone who can rely on the bona fide purchaser defence.

149 Re Ffrench's Estate (1887) 21 L.R.(Ir.) 283, 312.

150 The main authority in support of there being an equitable interest is the decision of Fry J. in Cave v. Cave (1880) 15 Ch. D. 639 and statements made in the House of Lords in Foskett v. McKeown [2001] 1 A.C. 102 by Lord Browne-Wilkinson at p. 108, Lord Hoffmann at pp. 115-116 and Lord Millett at pp. 127 and 130. The clearest statements are by Lord Millett who said at p. 127 the “beneficiary of a trust is entitled to a continuing beneficial interest not merely in the trust property but in its traceable proceeds also”. However, the comments were only dicta as the action was against volunteer successors in title of the wrongdoer, the issue was not raised directly and there was no question of multiplication of interests, which is the major objection to this approach. The authority in support of a mere equity is, however, much weaker, consisting of the Irish decision in Re Ffrench's Estate (1887) 21 L.R.(Ir.) 283, 312 and rather vague dicta by Lord Goff in Lipkin Gorman v. Karpnale Ltd. [1991] 2 A.C. 548, 573 and Millett J. in El Ajou v. Dollar Land Holdings plc [1993] 3 All E.R. 717, 737. See also the cases relied on by the authors in note 153.

151 See Re Ffrench's Estate (1887) 21 L.R.(Ir.) 283, 312.

152 An approach that seems to underlie Foskett v. McKeown [2001] 1 A.C. 102 and the analysis of the situation as vindicating existing property rights.

153 E.g. Birks, P., “Mixing and Tracing: Property and Restitution” (1992) 45 C.L.P. 69, 89-95; Birks, P. (ed.), Laundering and Tracing (Oxford 1995), pp. 30731110.1093/oso/9780198261018.001.0001; Smith, L.D., The Law of Tracing (Oxford 1997), pp. 356361; Pearce, R.D. and Stevens, J., The Law of Trusts and Equitable Obligations, 2nd ed., (London 1998), pp. 784786; Worthington, S., Proprietary Interests in Commercial Transactions (Oxford 1996), p. 175.

154 See P. Birks, “Mixing and Tracing: Property and Restitution” (1992) 45 C.L.P. 69, 95. It might also not be clear when rights have determined as a consequence of a successful assertion of other rights. There is a possible problem should it be necessary to be able to assert an equitable proprietary interest at every link of the chain, which a power might avoid: Birks, P. (ed.), Laundering and Tracing, (Oxford 1995), pp. 309310.

155 In addition, the available remedy may change down a chain of substitutions depending on what the money or proceeds of sale are spent on: P. Birks (ed.), Laundering and Tracing (1995), p. 310.

156 [2001] 1 A.C. 102, 108, 115-116.

157 At p. 127.

158 At pp. 130, 131. He referred to the beneficiary choosing to assert his beneficial ownership or to enforce an equitable lien but gave undoubted primacy to the beneficial interest.

159 This would only conceivably be a problem where title to the land is unregistered and the lien is presumably registrable as a C(iii) land charge under the Land Charges Act 1972 and the beneficial interest is dependent on overreaching and the doctrine of notice. In registered title both interests would need protection by registration or actual occupation so as to activate Land Registration Act 1925, s. 70(1)(g).

160 With prospective effect only.

161 If he is not a wrongdoer, liability must be established under dishonest assistance in a breach of trust or breach of fiduciary duty or under “knowing receipt” which requires some degree of knowledge and unconscionability, not just receipt of property.

162 See further below.

163 It has been argued above that this should be the position during the administration of an estate as regards the position of a beneficiary of residue or on intestacy and that statements otherwise show insufficient consideration of the position. A specific legatee has no real need of a floating right: because the property is identifiable, he could simply have a defeasible equitable interest.

164 See Wayling v. Jones (1995) 69 P. & C.R. 170, CA discussed above.

165 Except in the case of a trust fund.

166 And possibly the rights of a specific beneficiary during the administration of an estate.

167 See Prudential Assurance Co. Ltd. v. London Residuary Body [1992] A.C. 386, though this was a lease, not a fee simple.

168 There will be no perpetuities problems in the other cases which concern either an interest that is not an ownership interest coming to an end or an interest that will inevitably determine within the perpetuity period.

169 There are in fact no floating trust cases dealing with this issue. However, it is arguable that the position would be the same as with floating charges. The beneficiary is only intended to have an interest at a certain time in the future and a wrongful disposal would not seem to justify accelerating that interest.

170 Except in relation to a floating trust.

171 The cases cannot be justified on the basis of the purchaser's conscience: this was never mentioned in the cases; some successors have been held to be bound automatically; purchasers have been bound on the basis of notice and arguably notice alone is not enough to affect someone's conscience (see Ashburn Anstalt v. Arnold [1989] 1 Ch. 1, 26).

172 Lord Upjohn in National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175, 1238 said that an equity to which a purchaser is subject must create an interest in land. See also Lord Hodson at p. 1223.

173 However, this is provided that “the equities are equal”. The cases make it clear that a person with an earlier created equitable interest can lose priority because of his conduct. It is also subject to requirements for registration under the Land Charges Act 1972 where title to the land is unregistered. Where title to the land is registered the basic rules appear to apply regardless of registration: see Law Com. No. 254, Land Registration for the Twenty-first Century: a Consultative Document (1998), paras. 7.12 and 7.17. The Law Commission did not propose any changes to the law because the introduction of electronic conveyancing will eventually require interests to be registered simultaneously with their creation such that in most cases priority will for all practical purposes be determined by the order of registration of interests. It is interesting to speculate whether the Law Commission would otherwise have proposed that priority should be determined by date of registration rather than date of creation.

174 [1965] A.C. 1115, 1241-1248.

175 Maybe for this reason rights asserted through tracing should not be reeo as equitable ioterertr, although there is simply a choice between two ioterertr.

176 Phillips v. Phillips (1862) 4 De G. F. & J. 208. This seems to be the position in registered title as well as unregistered title: see Law Com. No. 211, Land Registration for the Twenty-first Century: a Conveyancing Revolution (2001), para. [5.34]. The Law Commission propose to change the law so that equitable ioterertr and equities are of the same standing: see para. [5.36].

177 Westminster Bank Ltd. v. Lee [1956] Ch. 1; Lord Denning M.R., National Provincial Bank Ltd. v. Hastings Car Mart Ltd. [1964] Ch. 665, 686 (at p. 681 he gave as an example proprietary estoppel rights). See also Nurdin & Peacock plc v. D.B. Ramsden and Co. Ltd. [1999] 1 E.G.L.R. 119 discussed in note 119 below.

178 Lord Upjohn, National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1115, 1238. See also Lord Cohen at p. 1228.

179 Cf. Nurdin & Peacock plc v. D.B. Ramsden and Co. Ltd. [1999] 1 E.G.L.R. 119 in which the view was taken that the right to rectify the rent provision in a lease was capable of binding successors in title and thus could be an overriding interest under the Land Registration Act 1925, s. 70(1)(g). Such a right to rectify clearly has no effect on the ownership of the property. There was no consideration of the need for a mere equity to be ancillary to or dependent on an equitable estate or interest in land. This case could be regarded in three ways: as supporting a wide-ranging category of proprietary equities; as wrong; or as a special case dealing solely with the right to rectify the terms of a lease.

180 The right to rectification seems susceptible to the same possible analyses.

181 See A. Everton, “‘Equitable interests’ and ‘equities’—in search of a pattern” (1976) 40 Conv. 209, 213-214 and Menzies J., Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (1965) 113 C.L.R. 265, 288-291 and the cases cited in both.

182 Taylor J., Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (1965) 113 C.L.R. 265, 282-284.

183 This interest is probably effective retrospectively. Support for this approach can be found, for example in the judgment of Kitto and Menzies JJ., Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (1965) 113 C.L.R. 265, 277-278, 290 and there is clear authority to this effect in Twinsectra Ltd. v. Yardley [1999] Lloyds Rep. Banking 438, 461, CA. For further support see: Lord Wilberforce, National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175, 1254; Lonhro Plc v. Fayed (No. 2) [1992] 1 W.L.R. 1, 11-12. Where a transaction is merely voidable and not void, it is difficult to accept that there is an equitable interest in existence until the procedural right has been enforced. This analysis can find indirect support in another procedural right which can bind purchasers with notice: the right to open a foreclosure: Campbell v. Holyland (1877) 7 Ch. D. 166. There is no doubt that foreclosure has the effect that a mortgagor loses all interest in the property.

184 A point made by Worthington, S., Proprietary Interests in Commercial Transactions (Oxford 1996), p. 100.

185 The rights to rectify and rescind are not discretionary except in the sense that they are equitable remedies. The claimant will get an interest unless an equitable defence such as laches is available.

186 Re Ffrench's Estate (1887) 21 L.R.(Ir.) 283.

187 Law Com. No. 271, Land Registration for the Twenty-first Century: a Conveyancing Revolution (2001), para. [5.36].