Constitution Flashcards
Settlor must vest the trust property in the trustees
Milroy v Lord - once property vests, trust is binding and irrevocable whether or not consideration given by beneficiaries
If trust property is not vested in trustees, the trust is improperly constituted.
If no consideration given, it is void.
Equity will not compel the settlor to correctly constitute the trust (to perfect an imperfect gift) as equity will not assist a volunteer - Milroy v Lord
If consideration given, may be SP
Transferring land
s52(1) LPA;
- transfer must be in a deed (Richards v Delbridge); s1 LPMPA - written, signed, witnessed, describes itself as a deed, delivered
Legal title doesn’t pass until registration
Deed must be used to grant a lease over 3 years or to assign any lease
To transfer a subsisting equitable interest in land, s53(1)(c) must be followed
Transfer of shares in a UK incorporated company
Stock Transfer Act 1963 - shares must be transferred by transferor signing a stock transfer form in favour of the transferee.
Transfer must be registered in the share register of the company - title only passes on registration of transferee as new shareholder
With shares of a public limited company, directors may not refuse to register the transfer, but directors of a private company may be able to under provisions in their articles of association - Re Rose
Transfer of Chattels
- by deed of gift or actual delivery, accompanied by transferor intending to transfer them - Re Cole
Bills of Exchange
Cheques made in favour of the transferor may be transferred to a third party by the transferor endorsing the cheque (e.g. signing his name on the back) - Bills of Exchange Act 1882; Jones v Lock
Transfer of Money
Money is transferred by delivery; writing a cheque does not transfer the money until the cheque has been cleared. If the payer dies before the cheque has been cleared, his death countermands the instructions to the bank. If the payee has given no consideration, he cannot enforce payment.
Choses in action (dents and rights under a bank account)
Transferred by writing complying with s136 LPA - notice in writing given to debtor/other party
Transfer of equitable interests
s53(1)(c) LPA
Where settlor intends to create a settlement by transfer but fails to vest the legal estate in the trustees, equity will not interpret that transaction as a declaration of trust
Milroy v Lord
If donor intended an absolute gift, but failed to effectively transfer the property, equity will not construe the failed gift as a declaration of trust
Jones v Lock - failed to endorse cheque - no trust as intended as gift
endorsed lease but not legally assigned - attempted transfer could not be construed as a declaration of trust because it was intended as a gift
Richards v Delbridge
Letter referring to transfer of shares upheld as declaration of trust, not gift, as it referred to the transferor “holding” shares and described the letter as a declaration. Transfer forms and registration only completed at a later date - trust took effect until the transfer of legal title by registration
Shah v Shah
Donor orally declared intention to make gift on trust to charity, but died before legal title transferred. PC upheld gift as donor was one of the trustees of the charity
T. Choithram International v Lalibai
Where a transferor has done everything within his power, equity may regard the transfer as complete
Re Rose - transfer forms and share certifications delivered to transferees, but directors did not register the transfer for 3 months - transfers were effective once Mr Rose had done everything in his power to vest the shares in the transferees
Re Rose extended - once all the relevant documents had been executed and the transfer stamped and handed to the transferee (but before registration), the gift was viewed as complete in equity
Mascall v Mascall
Owner of absolute equitable interest had not done everything in his power as he had not handed over the share certificate, even though he had handed over a signed share transfer form
Zeital v Kaye
A signed share transfer form and gave it to P (A’s agent); A told H she wanted him to become a director; H took on benefits and burdens of being a director. CA upheld gift in equity even though form not delivered to donee or company as it would have been unconscionable to recall the gift (subjective test)
Pennington v Waine (never successfully argued since)
Proprietary estoppel may be used to perfect an imperfect gift where there is assurance, reliance and detriment so that it would be unconscionable to go back on the assurance
Thorner v Major
Where donor intends to make gift during lifetime, but fails to vest legal estate in donee, gift may be perfected if legal title vests in donee as personal representative, provided donor had a continuing intention to make the gift up until death
Strong v Bird
Personal representative rule does not apply to intentions to make a gift in the future as a promise is not legally enforceable
Re Freeland - must be intention to make immediate gift
Personal representative rules applies if donee is sole executor or one of several
Sole - Strong v Bird
One of several - Re Stewart
Personal representative rules applies where donee becomes an administrator on the intestacy of the donor
Re James
Suggested that trust would become constituted if the trust property came into the trustee’s hands in any legitimate way (here, X was trustee of both trusts)
Re Ralli
BUT lack of intention; ignore Re Brooks’ ST (bad decision but never been overruled)
