INTRODUCTION

Analysing cases where a beneficial legal owner (A) of a certain asset transfers, or purportedly transfers, outright beneficial legal ownership in that asset to a transferee (B) in circumstances where that transaction between A and B must be considered as somehow defective, we have first briefly considered the preliminary question of whether legal title in that original asset passes – unimpeachably or voidably – to B or whether A retains it ab initio, i.e. whether the proprietary transfer is void at law (Chapter 3). We have then turned to the issue of whether – if beneficial legal ownership has passed to B – the proprietary transfer might still be voidable at law and/or in equity and whether A might accordingly obtain a legal and/or an equitable power in rem to revest ownership (Chapter 4). In this chapter, we shall now examine three basic questions, which may arise in equity, namely (i) whether and in what circumstances A retains some pre-existing equitable interest ab initio, which has already been vested in him prior to the transaction in question, (ii) whether he obtains a new equitable power in rem to revest equitable ownership, and (iii) whether equity confers some immediately vested new equitable interest on him (under a trust).

Issue (i) concerns the question of whether the proprietary transfer is void or “ineffective” in equity; its common law counterpart has been discussed in Chapter 3. Issue (ii) has already been discussed in Chapter 4 to some extent, with regard to both the common law and equity, but there remains the question of whether proprietary rescission in equity may be available in cases of non-induced (spontaneous) mistakes and failure of consideration. Issue (iii) has no counterpart at common law. It does not fit neatly within the dichotomy of voidable and void transactions in equity. Equity's response to a certain event may (but need not) be the imposition of an entirely new property right. The event generating such a right may be unjust enrichment or some other event. By contrast, the common law has no such third device by which it could confer some newly vested legal interest on the transferor. Legal ownership is either retained by the transferor or it passes to the transferee. If it passes, the transfer may be voidable.