Dispositions Of Property Flashcards
The rule in Re Rose
The court extended Milroy v Lord ; Where settlor/donor has done everything necessary and within his power to transfer title to trustee or donee, and the donee could complete the process without further aid from the the donor, the maxim that Equity will treat as done that which ought to be done will apply. Title will pass in equity but not in law, so that the settlor/donor holds the property on constructive trust for the trustee/donee. It must be unrevokable, otherwise the settlor has not done ‘everything necessary’.
Re Rose (1952)
Case: Transferor purported to both gift some shares to his wife and to put some shares on trust by transfering to trustee in March. He completed the necessary documents and delivered them to the company where shares were held. Transfer registered by company in June. Transferor had by then died.
If transfer had been effective in March estate duty would not have been payable on the transfers by the transferor’s estate, but duty would have been payable by the estate if the transfers were effective in June.
Decision:
- Loosened the strict rule in Milroy v Lord that all that is necessary to transfer the property must be done.
- Though the transfers were not legal until June, it was effective in equity in March, because the transferor had done everything in his power to effect a transfer by that date.
- The fact that an intention to make a gift could not be interpreted as an intention to declare a trust did not prevent the court recognising that that shares were held on CT for wife because this rule applies to express trusts.
Milroy v Lord (1862)
Historical rule relating to incomplete dispositions of voluntary settlements: Equity will not enforce an imperfect gift or an incompletely constituted trust as equity will not assist a volunteer.
◦ For a voluntary settlement to be valid, the settlor must have done everything which, according to the nature of the property, is necessary to be done in order to transfer the property and render the settlement binding.
‣ It may be by transferring the property to either the intended beneficiary, conveyed to trustees for the benefit of the beneficiary, or by declaration that the property is held by the settlor on trust for the beneficiary.
◦ Equity will not treat a failed gift as a declaration of trust. The dynamics of each are different. A gift divests the interests from one party to another. A declaration of self trust retains the interest in the property (and the property itself).
Scoones v Galvin (1934) NZ
Applied Milroy v Lord in NZ. Equitable ownership can transfer only if the donor has done everything necessary to effect the transfer.
Kennedy v Tickner [1950] NZ
Applied similar principles to Re Rose in NZ, softening Scoones v Galvin. A father executed a memorandum of lease transfer to his son via a common solicitor but died before registration. At the time of death, it was found that the solicitor was acting for the son and the father did not have an ability to revoke the gift. Therefore the gift was complete.
T Choithram International v Pagarani [2001] 1 WLR 1 UK
Self declaration where settlor one of a number of trustees. Although equity will not aid a volunteer, it will not strive officiously to defeat a gift’
Held that it would be unconscionable if charity could not acquire gift
The settlor clearly declared on his deathbed that he henceforth transferred ‘all of his wealth’ to a charitable trust of which he was also one of the trustees.
Informal creation of trust with respect to intangeable personal property ok (Hunter v Moss).
Effectively the assets were immediately vested in him in his capacity as a trustee, meaning the equitable disposition must have been completed. His estate sought to undo this gift.
In this case unconscionability therefore means ‘breach of trust’ ie. once the trust has been declared by the settlor (who is also one of the trustees), it would be unconscionable for him to revoke the trust and reclaim the subject matter.
Restraint on taking back trust assets and claiming them.
