Defective Transfers Flashcards
Three Certainties
Intention
Subject
Object
Re Beaney
Necessary mental capacity increases with value/size of gift
‘Bulk of’ is unclear for certainty of subject
Palmer v Simmonds
Subject matter is certain if the settlor provides a workable formula
Re Golay
For certainty of subject, must segregate tangible items of trust property from like items
Re London Wine Company
For certainty of subject, need not segregate intangible items if items are indistinguishable, ie identical shares
Hunter v Moss
For a trust, intention is ascertained by words or conduct
Paul v Constance
Beneficiary Principle
There must be identifiable human beneficiaries who can enforce the trust
Rule against perpetuity for a discretionary trust
Rule against remoteness of vesting
Max 125 years
Rule against perpetuity for non-charitable purpose trusts
Rule against alienability
Limited to 21 years, or allow trustees to spend all trust capital on the purpose
Formalities required for declaration of land transferred for trust
Evidenced in writing, signed by the transferor
Formalities for declaration for a trust of items other than land
None needed (writing desirable)
Formalities for transfer of chattels
Physical delivery (Re Cole); or Deed
Jaffa v Taylor Gallery
If physical delivery is impossible, the item may still be considered transferred
Formalities for transfer of shares
- Complete and sign stock transfer form (STF)
- Send STF and share certificate to transferee
- Transferee must send documents to company to register new owner
Formalities for transfer of land
Must be done by deed
s. 52(1) LPA - need to send deed to Land Registry and notify as new legal owner
s. 1 LP(MP)A - deed in writing, signed, witnessed and delivered as a deed
Formalities for transfer of equitable interests
s.53(1)(c) LPA
Can be done by:
Assigning equitable interest to the other person directly; or
Beneficiary can direct trustee from now on to hold trust property for other person
Grey v IRC
Transfer of equitable interests must be declared in writing
It must be signed by person disposing of the interest/an authorised agent or in will
Milroy v Lord
General rule: No equity to protect an imperfect gift; equity will not benefit a volunteer; equity will not construe a trust from an invalid gift
Strong v Bird
On the death of a donor, donee can claim legal title if:
a. Transfer fails due to not satisfying formalities;
b. Intention to make immediate gift by donor;
c. Intention continues until death; and
d. Donee becomes executor/PR/administrator of donor
Re Rose
A gift is complete in equity if the donor has done everything they can
Pennington v Waine
Extends Re Rose principle to gifts, even when they don’t meet every effort threshold.
Must be unconscionable to invalidate disposition
Cholthram International v Pagarani
If transfer is defective, equity will not strive officiously to defeat a gift. Rather, may interpret gift as a trust if the settlor is a trustee.
Exception for transfer of equitable interests
Vandervell v IRC
If interest is under a bare trust, and beneficiary directs trustees to transfer equitable state with intention of transferring legal estate too.
s.53(1)(c) LPA will not apply
