Constitution of Trusts

Question 1

What is the general rule on the constitution of a trust?

Answer 1

• Milroy v Lord: Equity will not perfect an imperfect gift. To perfect a gift, the transferor must do everything necessary according to the nature of the property. If a person declares himself a trustee this will not be constitued until it can be shown there was a true declaration
• Jones v Lock: Question in each case is of fact, did the settlor intended to make a declaration of trust or not

Question 2

How does proprietary estoppel effect an imperfect gift?

Answer 2

Dillwyn v Llewelyn: Proprietary estoppel may perfect an imperfect gift relating to land. The claimant would have to show a promise which they relied upon to their detriment

Question 3

What is the rule in Re Rose?

Answer 3

• If the transferor did everything necessary to be done by him, then the gift will be perfected. In this case it was the company’s fault that the shares had not been transferred
• Trust that arises must be constructive, once the donor has done all that he can it would be unconscionable for him to deny the gift

However, this seems inconsistent with Re Fry yet is still good law

Question 4

What is the rule in Pennington v Waine?

Answer 4

• The donor does not need to do everything in their power for equity to perfect an imperfect gift if to recall the gift would be unconscionable, i.e. the person had relied on it or had certain things told to them
• Re Rose could not apply here as Mr Pennington was acting as an agent and was therefore still on ‘the same side’

Question 5

How has the rule in Pennington v Waine been further distinguished?

Answer 5

• Zeital v Kaye: Held that an imperfect gift would only be perfected where the rule in Re Rose was satisfied and said Pennington concerned ‘special facts’
• Curtis v Pulbrook: Court in this case took an approach that Pennington was about detrimental reliance as the donee agreed to become a director of the company on the assumption that he had recieved shares in it. Thus in such a case, equity will perfect an imperfect gift

Question 6

What is the rule in Strong v Bird?

Answer 6

An imperfect gift will be perfected when the intended donee is appointed as the executor of the donors will, as long as the donor has the immediate intention to gift at the time of death

Question 7

What is meant by donatio mortis causa?

Answer 7

‘Deathbed Gift’
King v Durbey: Requirements of such are as follows:
1. It was made in the contemplation of impending death (this must be for a specific reason and cannot be contemplating natural end of life, but it does not matter if the contemplated and actual cause do not align. Must be days/weeks rather than months)
2. The gift was conditional and only effective upon death (this will lapse if the person does not die, must amount to a conditional gift and not a statement of testamentary intent)
3. The donor delivers dominion over the subject matter of the gift (This will only suffice where there is physical possession of the physical matter, some means of accessing the subject matter or documents evidencing entitlement to it)