The Law of Trusts

Citation

Penner, J. E. (2022). The Law of Trusts (12th ed.). Oxford University Press.

Chapter Summary

The twelfth edition, in Oxford's Core Text series, runs to about 540 pages in eighteen chapters arranged in five parts, followed by a select bibliography and an index. The publisher describes it as a concise but academically rigorous textbook that engages with the controversial and complex issues of the subject, and lists among its features chapter summaries of key issues, must-read cases, self-assessment questions and further reading. This edition was substantially restructured: chapters were reordered, three new chapters were added, and the division into parts is new. The author is Kwa Geok Choo Professor of Property Law at the National University of Singapore and a barrister of Lincoln's Inn, with a background in legal philosophy.

Part I, The Express Trust (Chapters 1–9)

By far the largest part, about 230 pages, more than two-fifths of the book.

• Chapters 1–2: Historical origins of the trust; Basic principles. The book opens with history and then sets out the basic principles of the trust.
• Chapters 3–4: Trusts and powers; Modern discretionary trusts. Two chapters on the line between trusts and powers and on discretionary trusts in their modern form. The publisher mentions a new treatment of "massively discretionary trusts", illustrated from lower court decisions.
• Chapters 5–7: Certainty; Constitution; The beneficiary principle. The requirements for a valid express trust: certainty, the constitution of the trust, and the principle that a private trust needs beneficiaries.
• Chapters 8–9: The trust up and running; Formalities. A chapter on the trust in operation, followed by formalities, which here come at the end of the part rather than at its start.

Part II, Resulting Trusts and Bare Trusts (Chapters 10–11)

About fifty pages. Chapter 10 covers resulting trusts. Chapter 11, "Bare trusts subject to contractual obligations and agency mandates", is one of the topics the publisher highlights as newly developed in this edition.

Part III, Liabilities Arising from Breach of Trust and Fiduciary Obligations (Chapters 12–16)

About 140 pages on what follows when things go wrong. Chapter 12 deals with following, tracing and claiming; Chapter 13 with the trustee's liability for breach of trust; Chapter 14 with fiduciary relationships; Chapter 15 with third-party liability for breach of trust and fiduciary obligations. Chapter 16, "Restitution, unjust enrichment, and the law of trusts", relates trusts law to the law of unjust enrichment.

Part IV, Constructive Trusts (Chapter 17)

A single chapter of about eighteen pages, "Constructive trusts and informal trusts of family property", which brings constructive trusts and trusts of the family home together.

Part V, Charity (Chapter 18)

A single chapter of about thirty pages on the law governing charities closes the book, followed by a select bibliography.

Key Concepts

Part I: The Express Trust

• Trusts and powers: the distinction between an obligation to distribute property and a discretion to do so.
• Discretionary trusts: trusts under which trustees choose among a class of beneficiaries, including very wide modern forms.
• Certainty and constitution: the conditions for a valid express trust and the step by which property comes to be held on trust.
• The beneficiary principle: the rule that a private trust must have beneficiaries who can enforce it.
• Formalities: the formal requirements that apply to some trusts and dealings with trust interests.

Part II: Resulting Trusts and Bare Trusts

• Resulting trusts: trusts under which beneficial ownership goes back to the person who provided the property.
• Bare trusts with contractual obligations or agency mandates: trusts in which the trustee holds for a beneficiary but is also bound by a contract or instructions.

Parts III–V: Liabilities, Constructive Trusts and Charity

• Following, tracing and claiming: the steps by which a claimant identifies and asserts rights over trust property and its substitutes.
• Breach of trust and fiduciary obligations: the liability of trustees and other fiduciaries, and of third parties involved in a breach.
• Unjust enrichment: the relationship between restitution for unjust enrichment and trusts law.
• Constructive trusts of family property: trusts imposed by law, including over the family home.
• Charity: the law governing charitable trusts and purposes.

Critical Analysis

Strengths

• Conceptual depth in a compact book. The publisher presents the book as concise and focused on core principles but academically rigorous, with original and thought-provoking commentary on the controversies of the subject. Chapters such as "Trusts and powers", "Modern discretionary trusts" and "Restitution, unjust enrichment, and the law of trusts" show a concern with how the concepts fit together, not only with the rules.
• An author grounded in property theory. Penner holds a chair in property law and has studied legal philosophy, which suits a book that aims to explain the intellectual challenges of the subject.
• Fiduciary law and remedies taken seriously. Part III gives fiduciary relationships and third-party liability chapters of their own, alongside tracing and breach of trust, and Chapter 16 connects trusts with the law of unjust enrichment.
• Study features. Chapter summaries, must-read cases, self-assessment questions, further reading and a bibliography support independent work, and the online resources include twice-yearly updates on key developments.

Limitations

• Uneven coverage. Constructive trusts and the family home share one chapter of about eighteen pages, and charity has one chapter at the end. Courses that spend several weeks on the shared home or on charities will need a fuller text.
• An unusual order. Formalities come after constitution and the beneficiary principle, and resulting trusts come before breach and tracing but constructive trusts only near the end. Students following a course that teaches topics in a different order will move around the book.
• Age of the edition. Published in February 2022, this is the oldest edition among the equity and trusts books in the course list. The twice-yearly online updates help, but later case law must be checked elsewhere.
• Not the easiest first read. The emphasis on controversy and conceptual analysis is a strength for essays, but some students may want a more explanatory book alongside it for the basic rules.

Where It Fits in the Course

Penner's book and Gary Watt's Equity & Trusts Law Directions are the two entry points in the course list, but they do different jobs. Watt's book is built for students meeting the subject for the first time and gives each topic its own chapter, including equity's doctrines and remedies outside trusts; Penner's is shorter and more argumentative, concentrating on the law of trusts itself and its conceptual controversies. Many students will find it useful to learn the rules from one of the explanatory texts and to read Penner for the analysis that essays require.

Graham Virgo's The Principles of Equity and Trusts and Alastair Hudson's Equity and Trusts are fuller textbooks covering equity as well as trusts: Virgo states the law and then its policy and theory, Hudson also sets trusts in their social and commercial settings. Hanbury & Martin: Modern Equity and Snell's Equity are detailed treatises, the first academic and the second written by practitioners and cited by the courts; they are for reference rather than for reading through.

How to Use This Book

The book suits undergraduates taking trusts or equity and trusts who want a concise account with real analytical content, and students preparing essays on the theory of trusts. No previous study of equity is required, but knowledge of property law and of the English legal system makes the early chapters easier.

A practical plan:

• Read Part I in order. Chapters 1–9 are the core of most courses and the foundation for the rest of the book. Chapters 3–4 on powers and discretionary trusts reward careful reading, since later chapters rely on the distinctions they draw.
• Read Parts II and III together with the course. Resulting trusts (Chapter 10), tracing (Chapter 12), breach (Chapter 13) and fiduciaries (Chapters 14–15) are standard examination topics. Chapter 16 on unjust enrichment is valuable for essay questions on the nature of resulting and constructive trusts.
• Supplement Parts IV and V with a fuller textbook if the course gives substantial time to the family home or to charities.
• Use the chapter features. Read the must-read cases listed for each chapter in the law reports, attempt the self-assessment questions, and follow the further reading for essay preparation.
• Check for later developments. Use the online updates and a more recent textbook to find cases decided after early 2022.