Constitution of Trusts Flashcards
“Constitution”
It is necessary to declare the trust and convey the property to the trustee
Milroy v Lord
Creation of a valid express trust:
1) transfer of title to a trustee for a beneficiary
2) self-declaration of trust
Turner LJ’s axiom: equity will not perfect an imperfect gift –> equity requires for a gift or trust to be validly enacted, subject matter must be transferred to donee or trustee respectively
“Everything necessary” has to be done
Jones v Lock
Invalid transfer will not be construed as a declaration of trust: father, having forgotten a present for his baby, produced a £900 cheque saying that it was to be given to son. Father died
Stuart VC: valid declaration of trust vs. Lord Cranworth(allowing appeal): failed gift
No evidence that father intended to make himself trustee - AND to burden himself with responsibilities
Scott v Southern Pacific Mortgages || Chang v Registrar of Titles
Equity will intervene when there has been consideration and where damages would be an inappropriate remedy
Re Fry
Confirmed Milroy: statute required HM Treasury consent for transfer of shares. Donor applied, but died.
–> everything necessary NOT done, although donor had done everything in his power
Re Rose 52
“Equity sees as done what ought to be done” –> diluting Milroy approach
Extension of Re Rose 49
Lord Evershed: constructive trust when donor has done all in their power and a successful transfer is no longer in their power - here, settlor had done everything possible to divest himself of the property (executing the instrument and delivering it to the company
Mascall v Mascall
Applied Re Rose 52: gift from father to son was held complete (son was not yet registered proprietor as he had not send documents so Land Registry and father sought a declaration because they had fallen out)
Pennington v Wade
Applied T Choithram v Pagarani
Arden LJ: “the rule against imperfectly constituted gifts [in Milroy v Lord] has led to harsh and paradoxical results” thus equity “tempered the wind to the shorn lamb”by utilising the constructive trust
–> unconscionability as underlying principle
Curtis v Pullbrook
Briggs J [and Arden LJ in Pennington] - the manner in which equity has softened Milroy is clear-cut summary of developments, equity’s intervention taking one of three forms:
(1) Re Rose principle: imperfect gif is valid when donor has performed all actions required of them
(2) Pennington ratio: gifts shall be perfected if it would be unconscionable not to do so
(3) T Choitram v Pagarani International: benevolent construction of the donor’s words can construe a failed gift as a self-declared trust
Haliwell on Pennington
Given that the donor’s agent represented that the donee need not take further action and that the donee then accepted appointment as director (detrimental reliance) - maybe it should be considered a case of estoppel and not imperfect gift
Zeital v Kaye
Pennington has not been widely applied - here, the court took a more orthodox approach –> relied on Re Rose ration but it did not apply because not everything done that could have been done
Angus on Pennington
Pennington’s invocation of “unconscionability” appears an application of an updated doctrine of proprietary estoppel that mirrors developments in its promissory counterpart: Requiring a mere change of position rather than detrimental reliance on behalf of donee
Paul v Constance
Application of Milroy:
“The money is just as much yours as mine” –> Mr Constance held the bank account on trust for himself and Ms Paul
(likely that the court will require evidence of intention - here the bank manager provided such)
Applications of Milroy
Jones v Lock
Re Fry
Paul v Constance
Relaxation to the Milroy rule?
Re Rose 49
Re Rose 52
