In Search of a Model for the Introduction of the Trust into a Civilian Context

• Jurisdiction: South Africa
• Date: 27 May 2019
• Pages: 63-85
• Published date: 27 May 2019
• Author: MJ De Waal
• Citation: (2001) 12 Stell LR 63

IN SEARCH OF A MODEL FOR THE

INTRODUCTION OF THE TRUST INTO

A CIVILIAN CONTEXT

MJ de Waal*

B Comm LLM LLD

Professor, University of Stellenbosch

1 Introduction

The law of trusts

1

offers an almost inexhaustible source for legal

comparative research. A traditional, and perhaps the most popular, angle

has been to use the trust as an example of an institution which can only

be found in jurisdictions based on the English common law. In a

relatively recent contribution on the law of trusts a well-known American

author on the subject states with confidence that the trust is a "uniquely

Anglo-American institution" and that the "Continental legal tradition

did not develop the trust".

2

According to this view jurisdictions based on

the civil law cannot have the trust in its "proper" or "real" form.

3

Of course, these jurisdictions can (and do) have "trust-like institu-

tions"

4

or "so-called trusts".

5

But these are not real or proper trusts. Why

not? In order to answer this question properly one has to make an

excursus

into the history of the English trust. However, the focus and

scope of this article do not warrant such an exercise and a number of

general observations will have to suffice.

6

A good point of departure is

* The author wishes to record, with gratitude, the financial assistance of the Alexander von Humboldt

Foundation (Bonn) which enabled him to do the research for this article during a period of research

leave at the University of Regensburg, Germany. The views expressed here are those of the author.

The concept "trust" will not be formally defined for purposes of this article --- various definitions and

descriptions will emerge from the exposition which follows. But it should be noted here that the word is

throughout used in its proper or strict sense, thus excluding legal relationships such as those generally

existing between, eg, tutor and pupil, curator and patient and principal and agent.

2

See Langbein "The Contractarian Basis of the Law of Trusts" 1995

Yale LJ

625 669. Therefore, for the

civilian lawyer, "the trust concept is hard to grasp": Sonneveldt

The Trust — An Introduction

in

Sonneveldt & Van Mens (eds)

The Trust: Bridge or Abyss between Common and Civil Law Jurisdictions?

(1992) 1.

3

To refer to the "common law" and the "civil law" as two distinct and separate bodies of law is not

wholly uncontroversial: see, eg, the remarks by Gruning "Reception of the Trust in Louisiana: the Case

of

Reynolds v Reynolds"

1982

Tulane LR

89 n 3 and also the further references provided by him. For an

introductory discussion of the different "legal families" of the world, see Zweigert & Katz

Introduction

to Comparative Law

3 ed (1998) 63

et seq.

4

Hayton "The Hague Convention on the Law Applicable to Trusts and on their Recognition" 1987

International and Comparative LQ

260 262.

Hayton

Trusts

in Hayton, Kortmann, Nuytinck, Struycken & Faber (eds)

Vertrouwd met de Trust:

Trust and Trust-like Arrangements

(1996) 3.

6

For a much more detailed historical analysis, see eg Hayton

Trusts

9-13; Jones

Trusts in England after

the Statute of Uses: a View from the 16th Century

in Helmholz & Zimmermann (eds)

Itinera Fiduciae

(1998) 173; Macnair

The Conceptual Basis of Trusts in the Later 17th and Early 18th Centuries

in

Helmholz & Zimmermann

Itinera Fiduciae

207; Martin

Hanbury & Martin: Modern Equity

14 ed (1993)

5 et seq;

Pettit

Equity and the Law of Trusts

8 ed (1997) 11-13; Sonneveldt

The Trust

1-4.

63

(2001) 12 Stell LR 63

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64



STELL LR 2001 1

the statement that "the history of the trust is the history of equity".

7

This

means that there is a close connection between the English trust and the

system of law developed by the Chancellor in reaction to the "common

law", that is the law that became common to the whole of England after

the Norman conquests. The common law had grown into a rather rigid

system by the end of the thirteenth century and the main purpose of this

new body of law, known as "equity", was to "mitigate the rigour of the

common law".

8

The tension between the common law and equity is well

illustrated by the respective positions of the parties to the use, the

forerunner of the trust. The interest of the beneficiary under the use (the

cestui que use)

could not be enforced in terms of the common law. At

common law the legal ownership of the property held in use vested in the

feoffee to use.

In equity the Chancellor had to acknowledge this fact, but

he nevertheless added the

caveat

that the property was held for the benefit

of the

cestui que use.

Initially the interest of the

cestui que use

was treated

merely as a claim against the

feoffee at use.

But before long it came to be

recognised as a proprietary interest, as a form of ownership, which could

be enforced against anyone except a third party who acquired the

property for value without notice. This was the origin of the concept of a

divided or dual ownership.

Because of the widespread exploitation of the use (especially to avoid

feudal dues), the Statute of Uses 1536 was passed. This Statute put an end

to the use (or at least severely restricted it). However, the use was later

"resuscitated" under the name of the trust.

9

The

feoffee to use

became the

trustee and the

cestui que use

the trust beneficiary (or

cestui que trust).

Although the trust became a much more developed institution than the

use had ever been, the division of ownership, so typical of the use,

remained a distinctive feature also of the trust.

For many Anglo-American lawyers it is fundamental that the trust

must be defined in terms of a title divided between trustee and

beneficiary. The trustee has "legal ownership" of the trust property

and the beneficiary "equitable ownership" or "beneficial ownership".

10

The law/equity divide is, of course, unknown to the civil law. Moreover,

civil law jurisdictions, or so-called "mixed" jurisdictions

11

where the law

of property is based on civilian concepts, adhere to a unitary concept of

ownership. As a result ownership cannot be split between those holding

7

Sonneveldt

Trust

2.

8

Sonneveldt

Trust

2.

9

Pettit

Equity

13.

10

This emphasis is found in the definition of "trust" in many modern English textbooks: see eg Oakley

Parker and Mellows: the Modern Law of Trusts

6 ed (1994) 7-8; Pettit

Equity

22; Riddall

The Law of

Trusts

4 ed (1992) 1.

11

A "mixed" jurisdiction has been described as a jurisdiction "at the intersection of civil law and

common law": see Zimmermann & Visser

Introduction: South Africa as a Mixed Legal System

in

Zimmermann & Visser (eds)

Southern Cross: Civil Law and Common Law in South Africa

(1996) 1 2.

Reid

National Report for Scotland

in Hayton, Kortmann & Verhagen (eds)

Principles of European

Trust Law

(1999) 67 refers to a mixed jurisdiction as one in which there is a "fusion of the two great

legal traditions of Europe, of the civil law and the common law. . .". But see also n 3

supra.

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