Constitution Of Trusts Flashcards
What is constitution of trusts?
It considers circumstances where a trustee will hand sufficient title to the property in order for the trust to be effective
How can constitution occur?
Milroy v Lord: constitution can occur:
1) either through transfer of legal title to a third party
2) settlor declares himself as a trustee
What are the different methods of transfer?
Copyright: signed writing
Land: deed followed by registration of title
Cheque: endorsement and delivery
Charles: physical delivery with intention - parting dominion over an article
Shares: the general rule is that there must be a completion of share transfer form, handing over relevant share certificate and registration of dealing.
What cases are there to support self declaration of trust?
Paul v Constance - There was irrevocable declaration of trust of bank account
T Choithram v Pagarami - trust effectively declared by an individual even though he intended to be one of several trustees. It would be unconsciabke for settlor to renege
Shah v Shah - there was an imperfect gift but an accompanying letter made it clear that he was holding on trust until gift perfected
What happens if attempts are unsuccessful?
Transfer will have failed:
- Richards v Delbridge: an imperfect transfer of land (and failed gift) because transferor did not draft a deed of conveyance
- Antrobus v Smith: ineffective transfer of shares by mere endorsement written on the back of a share certificate.
What does equity cannot perfect an imperfect gift mean?
Means the because the beneficiary provides no consideration, they therefore have no interest they can enforce. Reinforces idea that court will not assist a volunteer.
Therefore if settlor does not adopt appropriate mode of transfer then the gift will fail.
What cases supports maxim that equity will not interfere
Zeital v Kaye - was an imperfect transfer in circumstances where the donor has handed a blank stock transfer signed by a third party agent - did not add donee s name and was undated
Curtis v Pulbrook - there were two gifts of shares which failures because absence of proper transfer of title. Donor had passed over share certificate but not stock transfer form, meaning legal title not transferred.
What is every effort doctrine?
Re Rose (share transfer form): if donor has done everything needed to effect transfer of title, gift will not fail because donor subsequently dies OR as a change of mind (Mascall v Mascall)(executed land transfer form)
What was said in Zeital v Kaye
Once donor has done all in power to transfer the shares, he will be regarded as holding legal title to them upon trust for the donee, who will become their beneficial owner
What was the judgement in Pennington v Waine
Arden LJ: for interests of legal certainty, there must be ascertainable point at which it can be said gift has been completed and that point of no return must be identified.
This state is reached when it becomes unconscionable for the door to renege on the gift.
There is no list of factors, it must depend on the court’s evaluation of all relevant considerations. They will draw a balance between detriment and benefit - is it proportionate?
Bradbury : moved out of house
Jennings v Rich : promised a house
How was it unconscionable in Pennington?
It would have been unconscionable for the donor to recall the gift once the donee had agreed to become a director. By withdrawing, the donor would have been taking unconscientious advantage of the donee. It would also be equally unconscionable for her personal representative to refuse to hand over the share transfer form to the donee.
Here delivery of share transfer before her death was unnecessary so far as perfection of the gift was concerned.
What are the relevant factors in Pennigton?
Ada made gift of her free will, told Harold and Pennington of intentions, signed a transfer for, and gave it to agent Pennington for him to secure registration. Pennington told Harold he would not need to take any action. Harold had agreed to become director of the company which he could not do without the gift of shares.
What support has Pennington v Waine received?
Jordan v Roberts: where High Court accepted that an otherwise imperfect gift of shares be treated as having completely constituted IF it would be inequitable for the donor to resile from the transaction
What is Donationes Morris Causa
Exception to rule that equity will not assist a volunteer: gift made on donor’s death bed may be perfected even though necessary formalities have not been followed
What can be the subject of DMC?
Following Sen v Headly, any time of property can be subject, even land
What is the first condition of DMC?
Duffield v Elwes: The gift must have been made in contemplation of death. Death must be considered to be imminent and there is required to be more than mere general contemplations.
Re Craven: contemplation of death within the near future.
Vallee v Birchwood: gift made in contemplation of death from an identified source and not necessarily the expectation of death. Donor does not have to be in extremis or at death’s door when gift is made.
Gardner v Parker: contemplation does not have to be expressed but can be inferred.
However: Re Kirkley: gift made by bed ridden donor not in contemplation of death because donor was worn out, was not ill. Reference to death would have needed to be express to create a DMC
Wilkes v Allington: deceased may die of another cause than was anticipated when making DMC
What was held in King v Chiltern Dog Rescue, Red Wings Horse Sanctuary
Donor not suffering from fatal illness, dangerous operation or journey. She had no reason to anticipate death in near future from a known cause. She had opportunity to take advice and make a will.
As the gift lapses If the donor recovers or survives, DMC cannot run on until death inevitably occurs. the gift comes to an end if the donor fails to succumb to death which was anticipated when DMC was made.
What is the second condition of DMC?
Gift must be conditional on the death of he donor.
Cain v Moon: gift must be made so that property reverts to the donor if he/she recovers.
Sen v Headley: gift is absolute only on donor’s death - therefore no DMC if donor intends to make immediate gift
What is the third condition?
Dominion or control/possession must pass from donor to the donee - there must be delivery before death (Ward v Turner)
Words are insufficient (Bunn v Markham)
There must be actual and physical delivery of an item OR constructive delivery by the passing over the means of obtaining the property or some indicia of title to the item. If there is no change of possession, there can be no DMC- Cain v Moon
What was it held in Vallee v Birchwood?
Father passed to donee the deeds of property and key. But donor still lived in property for four months after passing over keys
Not necessary that donee be given exclusive physical possession or control over the land. By handing over titled deeds by gift, donor has put it outside his power to transfer legal title or alter the interests that is subject matter of the gift
What is the rule in Strong v Bird?
Case established rule that an imperfect immediate gift of property will be perfected on the death of the donor if the intended donee is appointed to the executor/administrator under the donor’s will.
This case it was the release of the debt that was the gift
What developments are there on Strong v Bird?
Intention to make the gift has to persist until the death of the donor:
Re Pink: continuing intention that the gift should have been given at the time it was given
Re Wale: testatrix intended to constitute a trust but forgot to transfer all of the property = she clearly didn’t have necessary continuing intention for the rule
What happened in Re Stewart?
Recognised that this rule in Strong v Birdn operates generally in relation to failed gifts, not just to the release of debt
What future examples are there of Strong v Bird?
Re Freeland: promise to give a car at a future date fell outside of the rule because there has to be an intention to make an immediate gift
Re James: if donor dies without a will, donee takes out letters of administration (of estate) legal title to property will be entitled to them
