BPP GDL Study Notes: Ch 4 - Formalities Flashcards
Do trusts of pure personalty need to be declared formally or informally? What does this mean on a practical level?
Informally. This means they can be declared orally or by conduct.
What case makes clear that there are no formalities for declaring a trust of pure personalty?
Paul v Constance
What are the four functions of formalities?
1) cautionary function
2) protective function
3) evidentiary function (ie evidence of creation of trust and its details)
4) channelling function (ie standardising functions effectively)
What constituted the declaration of trust in Paul v Constance?
- numerous discussion between Mrs. Paul and Mr. Constance
- Mr. Constance’s repeated declarations that the money in his sole account was intended to be shared betweeen them.
What governs the formalities for creating a trust of land?
s53 (1)(b) LPA 1925
What are the formalities for creating a trust of land?
- needs to be evidenced in writing
- needs to be signed by the settlor
What happens if the formalities for creating a trust of land are not met?
the declaration of trust is “unenforceable”.
What controls the formalities around implied, resulting and constructing trusts? What are those formalities?
- s53 (2) LPA 1925.
- requirements of s53 (1) do not affect the creation of these trusts
Give a case that evidences the formalities surrounding implied, resulting and constructive trusts.
Hidgson v Marks. No formalities required for their creation
What governs the disposition of pre-existing (subsisting) equitable interests?
S 53 (1) (c) LPA 1925
To what types of property does s53(1)(c) LPA 1925 apply?
All property
What are the formality requirements for a disposition of a subsisting equitable interest?
- in writing
- signed by person disposing of the interest
- OR signed by his agent who has been authorised in writing.
What does “disposition” mean? Give some examples.
- any act by which a person ceases to own the item of property in question
- eg:
- sale
- gift
- assignment
- declaration of trust
etc
What is the key case where a beneficiary directed trustees to hold property on trust for another? What was the intended purpose?
- Grey v IRC
- attempting to avoid stamp duty (which is leviable upon documents transferring property, and was levied on a percentage of the value transferred)
What was the conclusion in Grey v IRC?
- an oral direction was an attempted disposition of subsisting equitable interests
- oral directions do not comply with s 53 (1) (c) and therefore are invalid dispositions.