Constitution Flashcards
1
Q
Constitution
A
The process where legal title is vested in the trustees.
- If the trust is not vested in the trustees, the trust is incompletely constituted.
- If no consideration has been given for the incompletely constituted trust, it is void. Equity will not compel the settlor to constitute the trust or treat the failed transfer of trust as a self-declaration of trust – equity will not assist a volunteer
- Same principle with gifts.
- If a donor has not perfected the gift by transferring legal title to the donee, they will not be compelled to do so.
2
Q
Milroy v Lord (1862)
A
When transferring property, the donor/settlor must do everything that is necessary to make the intended disposition.
If they fail to do so, equity will not perfect the disposition, nor will it treat him as having used one of the other methods.
3
Q
Jones v Lock [1865]
A
- Father returned home without a present for his baby/ Realising his error, he produced a cheque for £900 payable to himself and said ‘I give this to baby, it is for himself’. The father died shortly afterwards.
- As he had not endorsed the cheque to his son, the property in it had not been transferred and court rejected argument he had declared himself a trustee of the cheque.
- He had intended an absolute gift, which entails giving away all benefit to, control of, and obligation for property. Had not intended to assume responsibility of trustee.
- Consequently, £900 could not be transferred to the baby, and passed to his estate under his will because the Court will not hold the intended transfer to operate as a declaration of trust.
4
Q
Richards v Delbridge [1874]
A
- Grandfather wanted to assign lease to grandson. Later died. Endorsement on deed was ineffective to assign a lease. Had intended to make an outright gift so could not be treated as self-declaration of trust and failed.
- The issue of constitution is intrinsically linked with certainty of intention. If legal title to property has not been transferred (either to a trustee of donee), the court needs strong evidence that the original owner intended a self-declaration of trust.
- Compare with Paul v Constance [1977] where an effective declaration of trust was found despite Mr Constance seemingly being unaware of what a trust was.
5
Q
Choithram v Pagarani [2001]
A
- Wealthy businessman orally declared intention to make a gift to charity but did not transfer legal title to all trustees before he died.
- However, as the businessman was one of the trustees of the charity, Privy Council held it could be regarded as manifesting an intention to hold it on trust for the purposes of the charity.
6
Q
Correct method for transferring legal title in land
A
- s52(1) LPA 1925 – transfer of land must be done by means of deed
-
s1 LP(MP)A 1989 – specifies requirements for a deed
- Signed by settlor
- Attested by witness
- Delivered
- ss4/27 LRA 2002 – have to get land registered in name of trustee
7
Q
Correct method of transferring shares
A
- Must comply with Stock Transfer Act 1963
- Transferor fills out and signs transfer form in favour of transferee
- Form and share certificates sent to Companies’ Registrar
- Registrar registers transferee as new legal title shareholder
8
Q
Correct method of transferring chattels or cash
A
- Need either a deed OR
- 1.) Intention to make a gift coupled with
- 2.) Delivery (Re Cole)
9
Q
Correct method of transferring choses in action (e.g. bank accounts)
A
- S136 LPA 1925 – debts and other choses in action are transferred by writing and notice must be given to debtor/other party.
10
Q
Correct method of transferring cheques
A
- Mandate to payer’s bank to transfer money from payer’s account to payee.
- If payer dies before cheque has cleared, death countermands instructions to bank.
- If payee has no consideration for cheque, cannot enforce payment.
11
Q
Re Rose [1952]
A
-
Where the settlor has done everything in their power, equity may regard the transfer of equitable trust in the property as complete.
- Correct method of transfer of property must be used
- Documentation must end in hands of person/institution capable of effecting legal title transfer, e.g. Companies Registrar or Land Registry
12
Q
Mascall v Mascall [1986]
A
- Correct method of transfer of property used;
- Transferor need not do everything within their power to effect the transfer but;
- Transfer must be irrevocable by transferor
- Since no need for documentation to end up in the hands of party capable of effecting legal title transfer, requirements have been slightly loosened.
- E.g. if documents end up in hands of own agent, would not be sufficient.
13
Q
Pennington v Waine [2002]
A
- If the transferor has not done all in their power to irrevocably transfer ownership, the transfer may still be allowed if it would have been unconscionable to recall the gift.
- Widely criticised and unlikely to be followed because unconscionability is hard to define.
14
Q
Strong v Bird [1874]
A
- An imperfect Gift may be perfected if certain requirements are met:
- Immediate intention to make a gift (Re Freeland - 1952)
- Continuing Intention to make a gift (Re Gonin - 1979)
- Intended donee the executor/one of executors of donor’s will (Re Stewart - 1908)
15
Q
Re Ralli’s Will Trusts [1964]
A
- As long as legal title comes to the trustee in whatever capacity, as long as it is legal, the trust will be perfected.
- if a trustee of an unconstituted trust is also executor of the settlor’s will, then when the settlor dies the trustee receives legal title to the assets, which can be held on trust
- Widely criticised as in Re Brooks ST [1939] it was held not to be the case.
