Equity And Trusts

Question 1

Milroy v Lord (1862)- Trusts as a disposition of property

Answer 1

If A, the owner of property wants to dispose of it so that it benefits B , there are 3 options as per Turner LJ:

1. A transfers the property to B (the donnee) as an absolute gift
2. A declares her/himself trustee of the property to hold on trust for B( the beneficiary)
3. A transfers the property to C as trustee , to hold on trust for B (the beneficiary)

The trustee must distribute the trust property to the beneficiary by the time the trust comes to and end

Question 2

Knight v Knight - Certainty in creation of trusts

Answer 2

Lord Langdale MR identified these three :

1. Creation of intention - It must be clear tag the person disposing of the property intended to create a trust , rather than making a gift . Language should impose a clear obligation on the trustee (Re Adams and the Kensington Vestry 1884)
2. Certainty of subject matter - it must be clear exactly what property will form the ‘subject matter’ of the trust . For chattels , the trust must be identifiable, if it is part of the larger holding of similar property , it should be segregated from the rest (Re Goldcorp Exchange 1995). For intangible property such are shares , the trust property is certain even if identified by words such as 5% of my shareholding (Hunter v Moss) this precedent has also been applied to a percentage of a portfolio of shares (Re Harvard Securities 1997)
3. Certainty of objects (the beneficiaries of the trust) - It must be certain who the beneficiaries are . Fixed trust - where each beneficiary receives a fixed entitlement , the trustee must be able to draw up a complete list before distributing the trust property( IRC v Broadway Cottages 1954) . Discretionary trust - where the trustee has discretion about how much / when to distribute / to which beneficiaries it must be ascertainable whether someone ‘is or is not’ within the ‘class of objects’ if the trust ( McPhail v Doulton 1970). A trust with a very large class of objects may be invalidated by administrative unworkability (R v District ex parte West Yorkshire Metropolitan CC 1986)

Question 3

Paul v Constance - creation of Will

Answer 3

Trusts can be made orally except for a trust of land , which must be evidenced in writing by the creator of the trust . S53(1( (b) LPA 1925

Question 4

Tinsley v Milligan (1994) - Property law and interests

Answer 4

“English law has one single law of property made up of legal and equitable interests” (Lord Browne-Wilkinson)