Suchergebnisse

In English law, the expression "Constructive Trust" appears to be used in two different senses. (1) It is used to mean a trust which arises ex lege, as opposed to ordinary trusts, which arise ex voluntate. (2) It is used to mean an obligation arising out of unjustified enrichment. This double meaning has been, and continues to be, the source of much confusion. In a mixed legal system, which has inherited enrichment law from the ius commune, there is no room for sense (2). What about sense (1)? Scots law, like South African law, has the institution of trust. South African law rejects the constructive trust. In Scots law it is sometimes said to exist. But it is argued that, if it does exist, it is only in certain exceptional circumstances. The constructive trust is a dangerous institution, because of its capacity to subvert other institutions. An example is insolvency law, where the effect of the constructive trust is to subvert the paritas creditorum. That fact, combined with its conceptual innocence, makes the constructive trust unsuitable for export.

"Perhaps the greatest difficulty the civilians have in accepting the trust is caused by what I have come to regard as an English peculiarity logically detachable from the trust, namely, the distinction between the legal and the equitable estate. In Scots law, which, even if it did not invent and develop the trust for itself but took it over from England—the point is doubtful—has accepted it without inhibitions or reservations, no such distinction has ever been known. There the trustee becomes owner and the beneficiary acquires a contractual right against him."1

A company granted a floating charge over all its assets. The floating charge is a universal hypothec, introduced from English law in 1961. It covers both moveables and immoveables. A floating charge is not a real right at first, but becomes one when it crystallises. According to s. 462(1) of the Companies Act 1985 it is competent under the law of Scotland for an incorporated company to grant such a floating charge "over all or any part of the property … which may from time to time be comprised in its property and undertaking". After granting the floating charge, the company contracted to sell a flat to the defendants. This was followed by delivery of the deed of conveyance (the disposition). A final stage before transfer of real rights in the property is complete is registration of the conveyance. The floating charge crystallised, however, before this formality was completed. The question for the courts was therefore whether the floating charge attached to the flat on crystallisation.
At first instance and on appeal the Scots courts determined that the transfer of the real rights in the property to the Thomsons had not been perfected and that therefore the flat fell within the scope of the floating charge when it crystallised. In the House of Lords, however, a different solution was retained. The "beneficial interest" in the property was found to have been transferred to the purchasers on disposition. The reference to property which may be comprised in a company's "property and undertaking" in s. 462(1) of the Companies Act was interpreted as meaning property in which the company had a beneficial interest. The floating charge did not, therefore, attach to the flat.
By invoking the idea that there is scope for some intermediate legal category between personal and real rights, involving the transfer of the beneficial interest in property, the decision has traumatised a certain section of the Scottish legal community - ever resistant to invasions from over the border. Although Lord Clyde stressed that "the approach taken by the appellants in this case does not seek to innovate upon the established principles of Scottish land law or conveyancing", the distinction drawn between legal and beneficial ownership mirrors the English law concepts constantly used in the law of property to distinguish between legal and equitable rights - a distinction not used in Scots law.