Party Autonomy in International Property Law - Peace Palace Library

A. General Aspects of Party Autonomy
mony: trusts do not owe obligations, trustees do. 24 The DCFR definition
represents, I would suggest, a common misconception amongst civilian
lawyers attempting to translate the trust into terms with which they are
familiar from their own legal system.
So, a charge and a mortgage are alike because they are both security rights;
just as both lions and crocodiles are alike because they are carnivores.
A beneficiary’s interest under a trust and a fee simple estate in land are
alike because they are absolute interests which are non-defeasible upon
the performance of an obligation; just as rabbits and iguanas are alike
because they are herbivores. The rights of a chargee and the beneficiary
under a trust are alike because they relate to the rights of another; just
as lions and rabbits are alike because they are mammals. 25 An equity of
redemption is also a mammal. The rights of a mortgagee of land and the
holder of a fee simple estate in land are alike because their rights relate to
a physical thing and are exigible against the whole world (i.e. they are in
rem in the Roman sense); just as crocodiles and iguanas are alike because
they are both reptiles.
How English law, indeed how any legal system, permits party autonomy in
relation to the creation of property rights as between contracting parties
can only be understood by employing the concept of a right in relation to
another right (or, put identically, the duty to hold that right for another).
Once we realise that this right is not effective as against third parties, but
only as against the right holder from time to time, we can see that it is
not operating in rem in the Roman sense. It is unsurprising that early legal
systems, such as Roman law, did not develop in any coherent fashion what
may be described as a type of supra-law, rights relating to other rights. Restrictions
on the class of rights we recognise as operating against all others
and restrictions on our ability to transfer rights simply have no application
to this category. However it is even more important to realise that this
category of right does not operate merely in personam. There must be a
subject matter, another right, and the beneficiary or chargor is protected
from the counter-parties insolvency just as much as is someone who has
24
L. Smith, ‘Trust and Patrimony’, Revue générale de droit 38 (2008), 379-
403.
25
All charges and all trusts are equitable and not legal, but today it is their
conceptual similarity which is interesting, not their historical origin in one
corner or another of Westminster Hall. Only equity recognised right to other
rights, transcending the old Roman law division.
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Robert Stevens
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