| In all legal systems or jurisdictions, there exist, whether admitted or not, some rules of conscience or equitable principles which are referred to as equity. Equity is contrasted with the corresponding written law, as well as with the inequitable outcomes of applying the law in question. Common law lawyers are familiar with the concept of equity because it was historically applied to cases where application of the common law principles caused hardship or where common law damages were inadequate. How about civil law countries? How about China? This paper is intended to address the necessity and desirability of introducing and recognising the concept of equity via trusts law to China. A dispute relating to title to surplus money in a welfare fund will be analysed to show how important it is to popularise and promote equity and trusts in China. Equity and trusts are close in conception and they are often taught as one subject in a university curriculum. Indeed the trust is recognised and enforced within the realm of equity rather than law and neither can be fully explained without reference to the other. Equity is the backbone of trusts law, and there cannot be a real trust law without equity. To enforce trusts law is to enforce equity. This paper will address the relationship between equity and the trust, and will include some comments on the Chinese Trust Code. |