Equity and Trusts- Constitution Flashcards

Question 1

Q

what is consitution a way of?

before constituon what must we do?

Answer

A

Consitution of trusts this topic partic rel to establishin an express trust

Once an intention to make an outright gift or create a trust is declared it must be determined whether the gift or trust is completely constituted.

Question 2

Q

what have we done so far?

Answer

A

Now thus far looked at rules need to be satsifed in order to establish valid express trusts= 3 certainites, the rules on certainty relating diff types of trusts = cert I /subject matter and certainity object for fixed and discretionary trust

Last week looked at next item which had /hurdle had to be crossed in terms of establishing valid express trusts whether fixed or discretionary and looked at rule on formailites said type of expressed trusts apart from 3 certainties there additionally had to be satsifed certain rules of formaility/writing e.g express trust of land need to have trust evidenced or manifested and proved in some writing signed by person declaring trust. This rule set out s.53 1 b of LPA so land is very improtnnt.To have expressed trust of land need written evidene ohterise trust unenforceable – series of letters or 1 signed doc- trust of land expressly created need to be evidenced in writing. Resulting and constructive trusts= no writing. Resulting and construitng arise generally in context of any prop by operation of law but to create express trust of land need to be in signed writing to be enforceable for beneficiares to sue. If not cant sue uneforcable – cant sue une saunders v vautier to collapse trust and demand transfer of legal title to them and cannto assert their right to occupy land cos would be governed by tolota would be trusts of land.
Also looked at last week rules set in s.53 1 c- not declaring trust but disposing equit interest under pre existing trust- s.53 technical rule saying if want to expose equit int under existing trust- the disposle or disposition needs to be in signed writing. Rule in s.53 1 c about beneficaires who have equitable interest under existing trusts who want to dispose of inte. This rule of formality only take effect if effectd by signed written doc by ben disposing interest or agent. Cases on that = grey v irc , vandervell cases and looked at also case of ourteghd, jelly and inspector of taxes which said if you have contrsct to sell equit interest under trust and subject matter of contract unique prop. Or got equit share under trust say something unique to dispose equit in unqiue prop if you contract tos ell your equit int to purchaser, that contract is specifically performale bc unique nature of prop in rlation to which equit int subsists. And that contract engrafted on it at time contract is agreed is a constructive trust and you don’t need to have signed writing. The equit interest passes under constructive trust. The vendor purchaser constructive trust

This week were looking at law relating to constitution.

Question 3

Q

what did we do last week in relation to formalities

Answer

A

Last week looked at next item which had /hurdle had to be crossed in terms of establishing valid express trusts whether fixed or discretionary and looked at rule on formailites said type of expressed trusts apart from 3 certainties there additionally had to be satsifed certain rules of formaility/writing e.g express trust of land need to have trust evidenced or manifested and proved in some writing signed by person declaring trust.

Question 4

Q

s.53 1 b formalities?

Answer

A

This rule set out s.53 1 b of LPA so land is very improtnnt.To have expressed trust of land need written evidene ohterise trust unenforceable – series of letters or 1 signed doc- trust of land expressly created need to be evidenced in writing. Resulting and constructive trusts= no writing. Resulting and construitng arise generally in context of any prop by operation of law but to create express trust of land need to be in signed writing to be enforceable for beneficiares to sue. If not cant sue uneforcable – cant sue une saunders v vautier to collapse trust and demand transfer of legal title to them and cannto assert their right to occupy land cos would be governed by tolota would be trusts of land.

Question 5

Q

s.53 1 c formalities?

Answer

A

Also looked at last week rules set in s.53 1 c- not declaring trust but disposing equit interest under pre existing trust- s.53 technical rule saying if want to expose equit int under existing trust- the disposle or disposition needs to be in signed writing. Rule in s.53 1 c about beneficaires who have equitable interest under existing trusts who want to dispose of inte. This rule of formality only take effect if effectd by signed written doc by ben disposing interest or agent. Cases on that = grey v irc , vandervell cases and looked at also case of ourteghd, jelly and inspector of taxes which said if you have contrsct to sell equit interest under trust and subject matter of contract unique prop. Or got equit share under trust say something unique to dispose equit in unqiue prop if you contract tos ell your equit int to purchaser, that contract is specifically performale bc unique nature of prop in rlation to which equit int subsists. And that contract engrafted on it at time contract is agreed is a constructive trust and you don’t need to have signed writing. The equit interest passes under constructive trust. The vendor purchaser constructive trust

Question 6

Q

this week what are we looking at?

Answer

A

This week were looking at law relating to constitution.

Question 7

Q

what is consitution all about?

Answer

A

Consitution is about consittuition either gift of prop or more rel to our context HOW TO CONSITTUTE A TRUST IN RELATION TO THAT PROP AND EXPRESSED TRUSTS

Question 8

Q

what is the person that is giving away essentially doing?

Answer

A

Talking about person who is settling trust or giving away prop, has to divest himself or herself of legal title of that property and in the context of establishing trust in relation to that prop the settlor has to divest himself or herself of legal title of that prop and properly invest that legal title in the people whom declaring being trustees.

Question 9

Q

what about whether its fixed or discretionary?

Answer

A

Where fixed or discretionary trust it doesn’t matter. The trustees must get and recive the legal title to the prop in question in relation to which the trust is being set up. It’s the settlor.

Question 10

Q

e.g of consitution of trusts?

Answer

A

e.G so if I say owner of ming vase, I want to give it to x to hold on trust for y but most simply constitution of trust means the settlor,person settling trust establishing trust during lifetime must divest himself or herself of legal title to that vase and pass transfer and invest legal title into the trustees. So if I want to have ming vase declare trust of it by giving x x hold ming vase on trust for y or abc equal shares etc, to properly constitute trust, me as settlor must divest myself legal ownership of that vase and invest into trustee. Once that happens x gets legal title and becomes proper trustee. And equit title under trust ming vase breaks off and invests in to ben.

Question 11

Q

what about consitution of personal prop?

Answer

A

So if im giving ming vase to x hold on trust for y- consittuon that trusts means self as settlor must pass legal title to x – once x gets legal title and theres a trust – 3 cert etc e.g theres no formaliltes its personal prop- x gets legal title and that point equit breaks off invisibly and invests in y beneficiary. The trust is constituted.

Question 12

Q

what about consitution when it comes to self declaration of trust?

Answer

A

Obviously constitution of trust is easier. If I simply say I simply say I hold ming vase on trust for y – self declare trustee ship settlor doing it self- equit breaks off when id eclare of course legal title already with me and saw that in paulv vconstance.

Question 13

Q

what about consitution in terms of a gift?

Answer

A

In terms of outright gift. If I simply want to give vase x as absolute gift. To constitute gift have to pass over full and equitable title to x. and as well see do that normally with goods simply by delivery handing them over or executing a deed of delivery so if haven’t parted with physical possestion youd do it of constructive delivery by deed.
constituting a deed of delvi.

Question 14

Q

what is more rel for us with consitution?

Answer

A

So consittuon is idea that certainitly gifts but more partic rel for us with trust and express trust we got over 3 cert and fromailites final stage is to constitute the express trust. The settlor must divest himself of legal title of prop and invest the trustee with legal title prop which point equit title breaks off and vested in beneficiares in accordance of trust. Paul v constance bingo wings case.

Question 15

Q

book- so what is consitition?

Answer

A

when a person transfers legal title to another the legal title is said to vest in the other person.

Question 16

Q

book- so what have we essentially said we are doing here?

Answer

A

we will consider rules for teh transfer of ttle (ownership) in property in rels to diff types of prop - so gifts, trust etc

Question 17

Q

book- what is general principle of constitution of trusts?

Answer

A

unless the prop has been transferred by the correct legal rules then the transfer fails- said to be imperfect

Question 18

Q

book- what would be the starting point for cts?

Answer

A

te equitable maxim that ‘equity will not perfect an imperfect title’.

Question 19

Q

so when will a trust be properly consituted?

Answer

A

It will be completely constituted when the property is transferred to and becomes vested in the donee or trustee. Where there has been a declaration but no vesting, the gift or trust is incompletely constituted.

Question 20

Q

book- what is another rule under this?

Answer

A

if person whom the transfer is intended to be made has not given valuable consideration, that person is said to be a volunteer- failing to valdily ‘vest’ in title in the volunteer means that the volunteer has no enforceable legal rights.

this is reflected in the equit maxim that ‘EQUITY WILL NOT ASSIST A VOLUNTERR’.

Question 21

Q

book-what if transferee has given valuable consideration?

Answer

A

may be able to have the contract specifically enforced.

Question 22

Q

book-tip to do here?

Answer

A

understand terminonly of
absolute owner= legal and beneficial (equit )title
donor= person who gives lifetime gift
settlor= person creating a trust of the same property
testator/trix= if same trasnactions were being created by a will
donee= person who recieves gift
beenficiary- person reciveing an interest under a trust
legatee/devisee= person who is given prop under a will
transferor= person giving the property
transferee= person who is intended to get the prop

maxim ‘ equity will not perfect an imperfect gift’ refers to perfect gifts and also applies to transfer of lefal title to 3rd party to hold on trust

Question 23

Q

book-what is also considered with consititution?

Answer

A

also deals with equit rules that have developed to overcome strict application of legal rules of vesting. (contradictory to maxim) hw equit maxims are guding principles of equit rules and in certain circum - equity looks upon as done that which ought to be done’ or equity looks at substance rather than form’

Question 24

Q

extra from book.

Answer

A

last line afet that para

Question 25

Q

book- benefitting another with prop?

Answer

A

milroy v lord - identifed three ways in which absolute owner of property could benefit another with his orher prop?

Question 26

Q

3 ways?

Answer

A

outright gift
transfer of legal title to a third person to hold on trust for the beenfit of another
declaring that the absolute owner now holds that prop on trust for another

Question 27

Q

gift?

Answer

A

legal equit title to NEW ABOLSUTE OWNER TRANSFERREE

Question 28

Q

transfer to third person to hold on trust?

Answer

A

absolute owner transferor - TRUSTEE RECIEVES LEGAL TITLE & BENEFICAIRY RECIVES EQUIT TITLE

Question 29

Q

absolute owner now holds that prop on trust for another?

Answer

A

absolute owner transferor- ABSOLUTE OWNER NOW ONLY HOLDS LEGAL TITLE AS TRUSTEE. NO NEED TO TRANSFER LEGAL TITLE AS TRANSFEREE ALREADY HAS LEGAL TITLE & BENEFICARY RECIEVES EQUIT TITLE

Question 30

Q

Extra marks for this?

Answer

A

keep distinct the legal req for consituion the transfer of an interest in prop and the formalites for creating and dealing iwth a trust INTEREST

need good plan for this.

Question 31

Q

book- revision tip

Answer

A

when answering q- focus will be on how equity steps in to modify the legal rules- do not wander into long exp of legal rules- brifely explain how the legal rules for transfer of title fasiled - then explain the equitable rules which may apply

Question 32

Q

book- what abotu when lawyers talk abotu trasnfer?

Answer

A

when lawyers talk of a transfer- it is said to be perfect if all legal req for valid transfer have been complied with - if not then trasnfer said to be imperfect

Question 33

Q

book-what about the diff legal rules?

Answer

A

diff legal rules apply to diff types of prop- rememebr that prop includes anything tangible or intangible that is capable of being owneed- the following sections set out the rules for the valid transfer of the most common types of prop trasnfer

Question 34

Q

The Significance of Vesting- what about this?

Answer

A

Where vesting has occurred, i.e the Donor/Settlor has divested himself of the legal title to the property and vested it in the donee or trustee, the donor /settlor cannot change his mind and reclaim the property,
Re Bowden [1936].

Question 35

Q

The Significance of Vesting- intro to this in other words?

Answer

A

So vesting – where this occure r.a.w-

Vesting legal title occurred- left the setrtlor and become invested in done (gift ) or the trustee if holding on trust and theres no going back- re bowden

Question 36

Q

The Significance of Vesting- so what has it ultimately done

Answer

A

It has passed from him completely and the donee/trustee has an enforceable interest in the property even though he may have given no consideration, Jeffreys v Jeffreys [1841]; Paul v Paul [1882].

Question 37

Q

The Significance of Vesting- so what has it ultimately done in other words?

Answer

A

The legal tile has passed over completely and the consituion of gift/trust is essentialy made out Jeffery Jeffery- paul v paul

Question 38

Q

The Significance of Vesting- what is the key thing here?

Answer

A

The key thing is – getting that divesting of legal title from settlor in case of trust- and getting it invested into the trustee

Question 39

Q

The Significance of Vesting- what about where there has been no vesting

Answer

A

Where there has been no vesting, unless a donee/beneficiary has furnished consideration, he has no basis in equity for enforcing the trust against the donor/trustee.

Question 40

Q

The Significance of Vesting- example of no vesting

Answer

A

1- r.a.w so if I promised x that im going to pass legal title to him and then x wil then hold to my ming vase wil then hold ming vase on trust for y’s beneficiary but I don’t do anything –

Question 41

Q

The Significance of Vesting- what about the trust with no vesting

Answer

A

the trust is not properly constituted- the legal title is not passed to x- the equitable title cannot break off and vest in y – x and y cannot seek to enforce the trust or assert trust bc it has not been properly constituted.

Question 42

Q

The Significance of Vesting- what do you have to feed

Answer

A

You got to feed through that legal title from settlor and invest the trustee with that legal title = key to it- at which point equit title when that has happened breaks off and trust is constituted and benficary can call for transfer of prop potentially under rule saunders v vautier.

Question 43

Q

The Significance of Vesting- in that sit if youre promised what

Answer

A

In that sit if ive promised to transfer the legal title to my ming vase to x as trustee on behalf of y but don’t do it- x and y are volunteers they’ve given no consideration

Question 44

Q

The Significance of Vesting- what can they not do

Answer

A

They cannot take any action to enforce my promise to transfer the prop to them and constitute the trust- so as trustee x will get legal title and more improtan ben y wil get equit title

Question 45

Q

The Significance of Vesting- what is teh general rule?

Answer

A

The general rule which epitomises this position is the rule: ‘Equity will not assist a volunteer’ (one who has not given consideration), or putting the same thing a different way round ‘Equity will not perfect an imperfect gift’, Milroy v Lord [1862].

Question 46

Q

The Significance of Vesting- e.g of this general rule

Answer

A

If ive promised transfer vase but haven’t done it as outright gift to x or x hold on trust for y – x and y volunteers cant do anything for me to compel me to transfer its for me to do that, teyve given no consideration, theyre just people who haven’t furnished cons= volunteers

look at case milroy

Question 47

Q

Constitution where Settlor Declares himself a Trustee- what about this

Answer

A

So if I declare I now hold this new vase on trust for hema that would be a self decl trust= paul v constance

Question 48

Q

Constitution where Settlor Declares himself a Trustee- E.g of this paul v const

Answer

A

Boyfriend said money as much urs as mine- joint winnings- 3 cert sats fixed trusts – c.s.m money in account cert of int- lang uses enough to show trust joint benefit or on trust – formalites – no prob- money of personalty – can have oral trust of personal property – its only land when you declare a trust have this 53 1 b rule-

Question 49

Q

Constitution where Settlor Declares himself a Trustee- so what is const an e.g of how this works

Answer

A

So final stage to estab expressed private trust is constitution and if chap already owns money in bank account – he already has legal tile e.g paul v constance money on bank book id eclare much urs as mine= self decl trust- the equit title breaks off that point- trust is constituted

Question 50

Q

Constitution where Settlor Declares himself a Trustee- what is this because of

Answer

A

Why- cause already got legal title- declare for joint ben or whatever

Question 51

Q

Constitution where Settlor Declares himself a Trustee- so consittion self on slide

Answer

A

Where a person declares himself a trustee of his own property for the benefit of another, the trust will be constituted when the declaration is made since the property will already be vested in the settlor, even where the intended beneficiary is unaware of the declaration: Middleton v. Pollock [1876]; Standing v Bowring [1885].

Question 52

Q

Constitution where Settlor Declares himself a Trustee- self decl in other words

Answer

A

So where we have self decl trust trustee already owns legal title – so const not really big prob – equit title breaks off and trust is established – paul v constance

Question 53

Q

Points on Self-Constitution of Trusteeship- where the s.jm is land?

Answer

A

Where the subject matter of such a trust is land, the declaration must be evidenced in writing and signed by the self-declaring trustee, S.53(1)(b) LPA.

Question 54

Q

Points on Self-Constitution of Trusteeship - without writing what is the prob?

Answer

A

without it there is a trust but it is unenforceable if not in writing

Question 55

Q

Points on Self-Constitution of Trusteeship- what about where self decl trustee owns equit int himself?

Answer

A

Where the self-declaring trustee owns an equitable interest himself, this must be in writing where a disposition under S.53(1)(c) (above).

Question 56

Q

Points on Self-Constitution of Trusteeship- more about this?

Answer

A

might about to dispos is it a valid sub trust is it a disposable- active non active did that last week

Question 57

Q

Points on Self-Constitution of Trusteeship - if a donor sets out to make an outright gift but does not vest prop what wil happened?

Answer

A

If a donor sets out to make an outright gift (e.g ming vase) but does not vest the property in the donee, the gift will not be enforced on the basis that the donor declared himself a trustee: Jones v Lock [1865]; Richards v Delbridge [1874]; Hemmens v Wilson Browne [1993].

Question 58

Q

Points on Self-Constitution of Trusteeship - so what are we tring to say here?

Answer

A

Saying is – if im promising transfer ming vase to x – promise in writing as outight gift but don’t do it- x cant sue me cos no contract hes a volunteer- he cant compel a transfer of legal tile and what jones

Question 59

Q

Points on Self-Constitution of Trusteeship- what was said in jones v lock

Answer

A

And what jones v lock says- you cannot out of promise like that – cts wil not sort of through twisted consitruction treat that promise of outright goft- wont treat of self decl of trust bc that weren’t the intention to create trust- intention was to hand over full title ming vase- but guy never did it-

Question 60

Q

Points on Self-Constitution of Trusteeship- what can you not do?

Answer

A

you cannout out of an outright promise of transfer of ownership of prop – extrapolate and twist into self decl of trust – paul v cosntance sit cos intention not there to support it- theres just no gift – jones v lock and Richards v delbr= main cases

Question 61

Q

Constitution where Settlor seeks to vest property in another as trustee - so example of this

Answer

A

So I want to transfer my ming vase to x and for him to hold it on trust for y or abc equal shares whatever you can do what you want with equity

But to get that trust estab – constituted- we have to show legal title passed from me settlor and over to and becomes invested to x- once that happens equit breaks off and vest equit interest in ben under fixed or discretionary trusts if you like

Question 62

Q

Constitution where Settlor seeks to vest property in another as trustee - so what is this about?

Answer

A

Where S opts to create a trust with someone else as trustee (or an outright gift is made) it is completely constituted when the property is transferred to the trustee (or donee).

Question 63

Q

Constitution where Settlor seeks to vest property in another as trustee - - what is the key for const in al?

Answer

A

So key for constitution for passing of legal title from settlor so as to invest that legal title prop in q shares, ming vase, bicycle , the key is investing legal title or divesting it from settlor and investing transferring to trustee – that’s key to estab constituting trust

Question 64

Q

Constitution where Settlor seeks to vest property in another as trustee - what is the real key for const?

Answer

A

Real key is to understand diff legal rules which apply for assigning or transferring legal title from settlor and investing legal title in trustee

Answer 65

A

The law lays down different required modes of transfer.

Answer 66

A

2nd point r.a.w – on how to do this depeing on prop in q.

Answer 67

A

(i) Legal Estates in Land -

land- s.52 lpa

Answer 68

A

(i) Legal Estates in Land -

By Deed, S.52(1)LPA

(Freeholds/Leaseholds) - transfer is completed by reg at the land reg s. 27 land reg act 2002

Richards v Delbridge (above)

Answer 69

A

Gives us absolute rule- to convey or transfer land , to convey land you need a DEED

Answer 70

A

And formalities for a deed – set out in s.1 (2) LPMPA 1979 – need other bits req for deed- doc deed at top deed at bottom- parties to trasnsaction set out in it- both parties who assign it all set out in deed- boths sign it and witnessed – secre – someone unconnected witnessed signatures= deed

Answer 71

A

Check to see whether land interes 1 that need substantive reg and its only by then sending out deed tr1 sending that off to land reg who then take person whos assigning land – takes his name off reg or her name and put on the transferres name whos recieveing it – its only when the reg is changed where the interest is subst registrable the legal title is then invested

Answer 72

A

So you need deed and update land reg- if something that attract substantive reg – e.g freehold house and give to x to hold on trust for y – need to execute the deed s.52 1 2 – doc tr1just giving free hold title to him trasfor transferre- trasnferre have to notify ladn reg and they would update reg- at that point x then becomes legal owner of land when put on reg and im taken off-

Answer 73

A

If unreg freehold giving away to x youd used form fr1 – again a deed – signed and witnees sent to land reg create 1st reg and x hold trust depending on whats been set out on transfer deed- point is you need deed plus you nee to alter reg if its freehold

Answer 74

A

If its leasehold and more than 7 years created – 7 years run- someone hold on trust- again you need deed but need to said to land reg to alter propertieship of land reg to show change in ownership-

Answer 75

A

obvs if lease under 7 years e.g 5 year lease granting to someone to hold on trust for someone else then just need deed conveyance – s.52 – Richards v delbridge- don’t have to notify land reg cos under 7 years

Answer 76

A

So deed itself transfer legal title – but just remember lease over 7 years freeholds you need deed plus alter reg at that point you get change in legal ownership –

Answer 77

A

So for our purposes if I give my house to x for free- freehold tilte and ask to hold on trust for y set it out transfer use tr1 cosign witness sent to land reg – reg updated to show x trustee is now legal owner- and of course you don’t know y isn’t on reg curtain principle – equit own kicks in.

Answer 78

A

So what im saying to transfer legal title to freehold land even if unreg = trigger 1st reg – so freehold need deed plus sort land reg – get name on reg- that would invest transferee with legal title

Leases- again have to alter reg lik freehold except leases under 7 years in which case just deed transferring legal title to recpeit trustee outright will do it.

So transferring legal title land you need need and prob need to change ladn reg unless fall within exception

Answer 79

A

Chattels – go back to ming vase- I give my ming vase to x and ask to hold on trust for y- elgal title pass from me divest from me and invested to x when I handover vase –
this thing includes such things as paintings, jewlerry etc

Answer 80

A

By Physical Delivery (e.g a painting)
Re Cole [1964]

compliance with re cole

delivery
intention that legal ownership is trasnffered

Answer 81

A

Re cole- physical del- will suggest transfer of elgal own-

or if im in Australia and x is in London and I tell x want him to have ming vase, cant physically cos 12,000 miles away but what can do is eecute deed of deliv and have call construtctive deliv- that deed will suggest even though physically hasn’t got vase he is now vested in legal title to it and if holding on trust that will constite trust or outright gift it will constitute the outright ownership of gift with legal and eq title passing

Answer 82

A

By Deed of Delivery

Jaffa v Taylor Galleries [1990]

Answer 83

A

glaister-carlisle v glaister carlisle

Answer 84

A

req for deliv can be actual deliv or constructive. this may include for e.g deliv of cary keys, represtning the deliv of car itself. it may also be informing the intended donee where he or she can find the chatel - thomas v times book co

Answer 85

A

Company shares – how transfer legal title to company shares

Answer 86

A

By memorandum of transfer in the form contemplated by S1. Stock Transfer Act 1963, S.770-771 Companies Act 2006 coupled with Registration of the shares,

Answer 87

A

Milroy v Lord [1862]

Trustee of Pehrsson’s Property v Van Greyerz [1999], Re Rose [1952].

Answer 88

A

In nut shell need to sign transfer form bit like tr1 and that needs to be sent to company who has register of shares who will update reg to show change in lawful owner of those shares, its again 2 together which will bring about change in legal title

Answer 89

A

So if I want to give my 5000 in xyz limited to A to hold on trust for b- I need to sign a stock transfer form and have that sent to company officers who will change reg, the share reg, the reg of shareholders

Answer 90

A

to show that A as trustees now lawful owner of those batch of shares-

Answer 91

A

At that point the legal title in A – the equit title breaks of and trust of shares is constituted.

Answer 92

A

Milroy v Lord- only way change legal title to constitute absolure gift of shares given them away or given them away on trust to cosnittue trust – is to make sure the ransfe form gets through and the reg shows change in ownership if you alter the reg.

Answer 93

A

If you haven’t done that the gift absolutely on trust is not cosnittued- theres been no divesting of legal title to the intended recipient absolutely as gift or as trustee.

Answer 94

A

That strict rule is mitigated quite considerably by doctrine what we call case re rose

Answer 95

A

Re rose shows equity at its most flex and talks about doctrine whats called every effort.

Answer 96

A

Re rose says is transferor of shares has made every effort to transfer the legal ownership of shares and put control of those shares put custody in control of those shares out of his power i.e he she made every effort to effect transfer but some reason hasn’t happened, equity will treat transfer as something happened, and effectively transferor will be treated as constructive trustee of the shares for and on behalf the intended transferee. So the equit ownership shifts.

Answer 97

A

So a wants to transfer shares to b – haven’t been any cases where the tranfers been a to b on trust- its just been from a to b as absolute gift which hasn’t happened for some reason,

Answer 98

A

So like a may have signed transfer form but in share certify ownership with form – posted –recorded deliv to companies registered offices to have registers shifted but the letters been lost or destroyed in post. If a can show he made every effort like that to transfer legal own shares in favour of b- but for some reason didn’t get through- re rose says-

Answer 99

A

Equity will forgive lack of formal transfer and treat there has been a shift in intended real ownership the economic value of shares in equity in favour of recipeient. And that’s done through device of treating transferor as a constructive trustee bc hes still on the reg, hes still technically legal owner holding shares on cosnturctive trust for b

Answer 100

A

We impose constructive trusts whereve justice and good conscience require it- so shift in equitable ownership the economic real important value of shares takes place behind a constructive trust where you can show transferor made evry effort to transfer legal title to shares even though the transfer was never formally effectuated by altering register.

Answer 101

A

So for that to work the transferor has to really not put off/sign share certify- sign off shared transferred form- say to b look oh im gonna transfer to you and put in draw- every effort wouldn’t work there bc he still has custody and dominon over share certify of form and man can always change his mind.

Answer 102

A

But if hes gone further and put it in post-ordinary post or recorded deliv and prove he done that to witnesses. Then hes put it pout of his power, hes given up physical control and hes made every effort, then its down to post-

Answer 103

A

If all this can be proved the intended recipeitn shares to receive them as trustee on trust for x or as outright gift which cases tend to relate to, can say well hes made every effort to transfer the shares and equity will forgive lack of formal transfer hes still on reg and treat him as legal owner shares, but under constructive trust kicks in in favour fo intended recpeit and they recive transfer of beneficial title.

Answer 104

A

But to do that as an exception you have to show DOCTRINE OF EVERY EFFORT HAS BEEN MADE by trasnferer to divest himself of legal ownership which for some reason hasn’t happened , so out of his custofy ad power, hes given up control of the documents and put process in train

Answer 105

A

So is this every effort- exception rule in re rose must be aware of.

Answer 106

A

Also relevance here pennigton v wayne again involving shares – which purport transfer shares- the cts tried to further bend and extend the elasticity of law here but didn’t really touch every effort doctrine but well see at back of doctrine of properiretay estoppel they tried to further loosen up the rules on incomplete trasnfers, so as to allow for shift in real equitable own of shares where transfer has been unsuccessful, well come to that in a moment.

Answer 107

A

Re rose and Paddington v wayne are very much cases which stand as exceptions to strict rule in milroy v lord which says that until shift legal title on share reg theres no change in ownership.

Answer 108

A

So there are exceptions that doctrine in equity wont perfect imperfect gift. Re rose says it can every effort and Paddington can be done through prop estoppel if show it would be unconscionable to deny that theres been a transfer in equitable owner detrimental rwliance, shares then this can be used to constitute .. Come on that more detail soon.

Answer 109

A

memorandum of transfer
registration of shares
stock transfer act 1963 Companies Act 1985

Answer 110

A

if there has ben compliance with the electronic crest system then the correct instruction will be adequate

milroy v lord

Answer 111

A

Just on shared trasnfers, old fashioned way is to signt he stock share transfer form share certify and post toc ompany offices udpoate share reg when that’s done legal title shares shifts to outright done or person taken as trustee

Answer 112

A

After 1996 certain Plc’s dispensed with share transfer forms and relied just on registration due to the introduction of Electronic share transfer CREST system.

Answer 113

A

After – r.aw. Where instantoeus t4asnfer of shares take place. Obviously where that has been put into effect it reduces scope for every effot and Paddington exception cos press few buttons its done

Answer 114

A

Choses in action- things in action like copyright, the benefit of a contract,

Answer 115

A

x owes me 100,000 POUNDS AFROEM LAST UEAR to be repaid 1% interest by trofay and hasn’t repaid it by midday as a debt, I can assign the right to sue and collect for that debt to another person, say a bank, who can give me say 50,000 full and finals ettlement, and they pick up exclusively the right then to pursue x for the 100,000, if they can do it they make profit but have risk of enforcement this is sometimes called factoring

Answer 116

A

Factoring=I can assign the benefit of contract, right to sue and collect for debt in this fashion, people claiming debt this is how it happens. The right to sue and collect a debt, the right to sue on the contract toe nforce benefit of contract is property bc its assignable

Answer 117

A

Not burden of contract only the benefit, the right to sue and enforce the benefit is assignable- this is a choses ina ction

Answer 118

A

and you can assign it, you don’t need deed or anything, just simple written notice of assignment with do it. S.136 lpa –

Answer 119

A

assignor assignee to bank- you just simply notify the person who owes money cosent just tell them. And then right to sue and collect that debt passes exclusively to assigne

Answer 120

A

Obvs if they sue for the debt and the other person counterclaim or something, they take the assignment subject to equities . Subject to any defences that person may have had against me but assignment is effected by simple written notice of assignment under s.136 lpa

Answer 121

A

The benefit of contract, right to sue and collect for debt owing is proeperty, that’s why dealth with lpa and that the assignment rule s.136

Answer 122

A

includes things such as debts, or rights under a contract

Answer 123

A

complaince with s.136 law property act 1925 which requires endorsement see jones v lock 1865

Answer 124

A

a valid transfer of money merely requires delivery.

Answer 125

A

Said you can dispose of them transferor transferred needs to be effectuated by a signed written doc.

Answer 126

A

By disposition in writing under S.53(1)(c ) LPA

-A written disposition s.53 1 c

Answer 127

A

another type of prop that can be trasnferred is the owenership of a beneficial interest - legal req to trasnfer this interest s.53 1 c

this applies to ben interest in any type of prop not just interest i land. this type of trasnfer wil be dealt with later,

Answer 128

A

these clear legal rules, from either stat or common law, for the valid trasnfer of prop rights provide the necc certainity in dealing with property ownership.

learn the legal req for each type of prop covered in this chap. explain this first in an exam before moving on to say that equity has devleoped means to overcome of imperfect title transfer

Answer 129

A

As mentioned earlier a where settlor declares himself trustee, we can have self decl of trust.

Answer 130

A

Where a settlor declares himself one of several trustees and manifests an immediate and irrevocable intention to create a trust of specific property, a perfect trust is created.

creates a valid trust

book - where legal title has not vested correctly, equity has estab exceptions to the legal rules outlined earlier. it is improtant to estab legal rules first , then consider which - and there may be more than one- of the equitable rules apply to perfect title.

EQUITABLE PRINCIPLES WHICH PERFECT A TRASNFER

Answer 131

A

So if hes one of several trustees a b c on trust for x y z and a holds legal title to prop and he declares that he holds that prop on such a trust, that will generate a valid trust.

Answer 132

A

This will be the position even though the settlor fails to transfer the property in its entirety to the third party trustees.

Answer 133

A

But if a already owns prop and declares valid trust in favour of x y z in terms that a b c will be trustees. As A already owns legal title that’s enough to do it and constitute others as trustees even though at that juncture they do not actual have legal title. Because a got it that’s enough

Answer 134

A

This comes from tricky case above

-Choitram v Pagrani [2001].

Answer 135

A

The office of trusteeship is joint and several and the retention by the settlor of the property as trustee is equivalent to all the trustees acquiring the property,

– this is the rule – this is the odd rule but nonethlees the rule which is relevant here from this case.

Answer 136

A

Exceptional Situations where Vesting of legal title in Donee/Trustee is deemed to have occurred in equity- even though hasn’t been a official handover of legal title

Answer 137

A

(a) Where donor/settlor has made ‘every effort’ to transfer the property.

1st except – doctrine of every effort- case re rose

Answer 138

A

However equity more flexibly recognises that vesting takes place once a donor/settlor has done ‘everything in his power to divest himself of the property’ even if the law requires some further task such as registration, Re Rose [1952]; Mascall v Mascall [1985] contrast Re Fry [1946].

Answer 139

A

( every effort to transfer legal title – posted etc but some reason letter doesn’t get through if tou can proe happened, re rose for gives lack of transfer lefal title and says the changeover has occurred in equity)

Answer 140

A

So if I wanted to give shares to a , I signed transfer firm, transfer to comp in q – to show a is to be new owner, but the letter destroyed in post, if I can prove all that been done, doctrine of every effort, will kick in and the transferor .

Answer 141

A

The legal title hasn’t changed but in equity, treat equitable ownership as shifting, ill be a constructive trustee, equitable titel breaks off in favour of transferee,

who then under saunders v vautier can call for formal transfer again from me of legal title.

Answer 142

A

Re rose involved shares- trasnfer effectvie, trasnferor did all he could to compelte trasnfer ‘gone beyond the point’ - in effect trasnferor has practically lost dominon of the property

Answer 143

A

Mascall v mascall = same idea involving reg land – father promises son he could have prop, signs tr1 transfer deed sends it to land reg doesn’t quire get through so q is , father changes his mind but after hes reelased doc so has every effofrt been made?

Answer 144

A

re fry - trasnferor had completed forms to trasnfer title and sent the forms to be registered. company needed the consent of the treasury to make the reg. the trasnferor completed all forms to get consent but had died before cosnent given. ct held that the trasnfror still held pwoer of shares and had not done all that was req to trasnfer them

Answer 145

A

if rule can be gleaned from cases. it seems from mascall that cts would perfect the trasnfer when the transferor can no longer change his or her mind and the prop has been taken out of the control of trasnfeor.

Answer 146

A

unconscionability

Answer 147

A

In Pennington v Waine [2002] the CA relaxed the requirements further by holding that a gift of shares was ‘assigned in equity’, by the execution of a share transfer form without delivery to the donee or company or registration of the transfer.
On the facts the donee had relied to his detriment on the transfer going ahead by becoming a company director.

Answer 148

A

Pennigton v waine – idea even more flex introduced by equity in constituting trusts of shares or outright gifts transfers of shares,

Answer 149

A

Held gift of shares assigned in eq where transferor mother and son assigned its shared transfer form (need to do) put shares in envelope but tehyw erent actually deleiverd to the company offices. So no parting of possession or custoday taken place by transferor but, the son on facts of that case. In anticipation of becoming owner of the shares undertook work company sec, relation shares existed so he acted to his DETRIMENT

Answer 150

A

Detriment (change of pos- he said there was assurance hed been given shares and on absis of assurance shares should be ctrasnfgerred to him which weren’t he then acted to his detrim. And basis on that he said UNCONSCIONLE FOR NOW TRASNFEROR, mother to deny the purported transfer od shares

Answer 151

A

So equity steped in and said she held shares as constructive trustee for son. So it loosens the flexible rule even more. It goes beyond every effort and introduces quite controv req

Answer 152

A

Says even if haven’t parted with custody of shares, theres been an assurance, shares would be handed over, a transfer effectuatred through the normal means, on the strength of that assurance youd be given shares, you rely to that detriment

Answer 153

A

Q- at equirties point of view is it now uncocnsioable trasnfere to enag on their promise to transfer shares when then fall out, and here propertiary estoppel effectively kicks in and supports the impostion of constructive trust

Answer 154

A

So transferor would be intended trasnforo would be constructive trustee holidng shares on constructive trust in equity for trasnfeeree. So legal titel stays same but the equit ownership shifts through estoppel, behind device of constructive trust bc to not allow= uncons result all bc trasnferre had acted to his detriment on promise of transfer

Answer 155

A

Pennigton = controversial some people like some people don’t.

Answer 156

A

Its interesting 1 sense cos talks about prop estoppel in relation to personalty not land, pure case involving pure personalty.

Answer 157

A

book- un con

Answer 158

A

This position required him to own the shares.
The court claimed it would be inequitable and unconscionable to permit the donor to recall the gift.

When the donor died it was therefore held that the shares were no longer part of her estate.

Answer 159

A

When transferor died, held shres , part of the state but real ownership and equity had passed to son under this constructive trust and he was entitled to real economic valu of shartes

Answer 160

A

Ct claimed r.a.w cos assurance reliamnet and detriment o permit- he relied on promise to detriment and that’s what made in inequitable for her to enate on promise and c.t kicked in

Answer 161

A

(b) Where vesting occurs by other means

Answer 162

A

(i) Where a donor expresses an intention to make an immediate gift of property but dies not having transferred to the donee/trustee, the gift will ordinarily founder on the principle that equity will not assist the donee to perfect the gift.

Answer 163

A

They wont help somebody whos given no consideration, no contract.

Answer 164

A

legal title vests in another capacity (fortuitous vesting)

Answer 165

A

where the legal owner promises to trasnfer prop (or promsies that he or she will not enforce the repayment of a debt, but fails to do this in hhis or her lifetime, the gift should fail. hw if the prmise prop vests in the potential referree in another capc, the cts have held that the transfer has been perfected - STRONG V BIRD - to be able to rely on the rule stong v bird requirements..

Answer 166

A

Few more exceptional rules developed. 1 strong v bird explain in collier

Answer 167

A

The donee may however rely on the rule in Strong v Bird [1874]. This rule was explained in Collier v Calvert [1994] as:

Answer 168

A

‘Where the donor maintains an intention to make a gift but does not perfect it and dies having appointed the donee personal representative of the estate so that legal title vests on the death of the donor in the donee…

Answer 169

A

..equity’s assistance is no longer required to order the transfer of the legal title to the donee. In view of the continuing wishes of the donor in such circumstances, no one has a better equity than the donee. So equity refuses to intervene against the donee…’

Answer 170

A

Another case if you get legal title through back where didn’t get through front, it doesn’t matter, the fact is you have legal title and that will perfect the gift,

Answer 171

A

That general notion seen from rather complicated case, re rallis wills trust- its another confirmation, basic idea that if you’ve been promised prop- no transfer owenership, if Theres a death, strong v bird- will and person promised the prop is personal rep, continuing intetio, they get legal title by op of law when seized dies, that perfects there gift of ming vase,Same where intestates

Answer 172

A

Re rally just another ccase, extentsion of that idea. If you end up getting legal title by diff route it doesn’t actually matter but that in itself will perfect a gift.

Answer 173

A

there is clear intention to make an intervvos gift to the trasnferree
there is present intention to give ; re freeland
the intention continues unchanged until death - re gonin
the intended transferee obtains legal ownership by appointment as excutor or personal representative - re james

Answer 174

A

when reading the exam ensure that you note who the executors are. this is usally at the end of the q. ensure that u reald the whole q.

Answer 175

A

intention must be clear intention to give immediately and there has only been some practical barrier to teh trasnfer. it must not be an intention to give in the future. the rule orginated in release from debts but it has been extended

to chattels - re stewart and
to an intention to trasnfer the legal title to hold as trustee- re rallis wt.

Answer 176

A

it is not clear whether dec in re rallis wt is an extension of strong v bird or a diff peinxiple all together.

Answer 177

A

propery tranferred under a wil must comply with wills act 1837- s.9 will must be writying, signed by tesr, wit by 2 people who not ben . hw a deathbed bequest can supersede the will if t complies with the requirements of a donation mortis causa

Answer 178

A

as set out in cain v moon & recently reviewd by c o a in king v dubrey i.e

Answer 179

A

iif the bequest is made in contemplation of imminent death
if the bequest is made contingent (conditional) on death; and
there is actual/constructive deliv of prop

Answer 180

A

this si more than contemplation of death which everyone must face. it can be contemplation of hazardorus undertakings, acting service during war or dang trip.

Answer 181

A

it will not matter that death actuallt occurs by diff means in wilkes v allington the donor had terminal cancer bu actually died of pneumonia. this was still held to be valid. it will not comply in contemplation of suicide.

Answer 182

A

if the transferor recovers, the intended gift fails. therefore the gift is revocable if death does nto occur. it can also be expressly revoked or by taking back dominon of the prop

Answer 183

A

this means transferor hand dominon to the transferre, by give tranfee the meants to control prop. this will be depen on nature of prop. where good a re tangible may not be diff but where prop intang e.g money = evidential problems. in the latter sit the cts will look fro rel evidence to indicate the trasnger of dominion.

Answer 184

A

not too sure id examined but they are not voluntteers bc given consid during marriage setllement- look on slides to skin over

Answer 185

A

could connect with marriage settlements

Answer 186

A

a covenent is promsie contained in a deed

Answer 187

A

So if im a settlor and I promise transfer money to a trust trustees or to chattels or painting or something and worth a lot of money and don’t transfer but give a coveneant a promise by deed to transfer that prop to trustees who then if have it would hold legal title on trust economic own for ben – if I don’t follow through my promise what is my pos?

Answer 188

A

A covenant in this context is a promise by Deed to transfer property.

Answer 189

A

Equity will not enforce S’s covenant to transfer property to trustees by decreeing specific performance if it is not supported by consideration, Re D’Angibau [1880].

Answer 190

A

By contrast, the common law will enforce the covenant against the covenantor (me I made a promise) without requiring consideration from the covenantee.

Answer 191

A

There cannot be a trust of ‘future property’ Re Ellenborough [1903] (property expected to be inherited at a future date).

Answer 192

A

Re cook- r.a.w – sometimes you see with these old fam settlemetns and cov to transfer prop to trustees of settlement, the settlor / trasnferr say mng vase to trsutees or paintings= easy

Answer 193

A

but he might promise transfer future prop e.g when grandma dies = future prop and not really prop and it doesn’t count

Answer 194

A

Future prop aka expectancy not really prop from point of view law of trust- re ellen

Answer 195

A

Because grandma might change her mind and leave to secret lover in will and you get nothing – promise to inherent is worth nothing until you get it.

Answer 196

A

A DMC is a lifetime gift which is conditional upon, and takes effect upon, death.

Dmc – exception to equity wont perfect and imperfect or assit volunteer

Means gift of prop which is made in contemplation / conditional on death –

Answer 197

A

so youre going in for really big op in hospital hand over keys ferrair- if I dotn come out alive oyu can have car- will elabes to mistres- if he can show valid dmc- valid gift made in contemplation of death which conditional on death he will win and that trousts the wil

Answer 198

A

Cos treated in sense as intervivos gift and that beats what happened later on when acc dead- that’s when will kicks in – its like a prior equity and that beats will like in those estoppel cases

Answer 199

A

So a dmc not really an outright int gift bc its conditional- you only get car when fies

Answer 200

A

Nor test gift- s.9

Sort of falls btw 2 – it’s a form of intervivos gift – a conditional lifetime gift but the condition is death – made when guyd alive. So it operates in equity really as another exception- equities elasticity. Another except to rule

Answer 201

A

It is neither an inter vivos gift in the strict sense, nor is it a testamentary gift (which need comply with the formalities laid down in the Wills Act 1837). It is another exception to the rule ‘equity will not assist a volunteer’, or ‘equity will not perfect an imperfect gift’.

Answer 202

A

Russell CJ laid down three conditions required for a successful DMC:

Answer 203

A

(i) the gift must be in contemplation of the donor’s death
(ii) the donor must intend the property to revert to him if he does not die;
(iii) the subject matter of the DMC (or the means of gaining ‘control’ over it) must be ‘delivered’ to the donee.e- by handing over car keys

Answer 204

A

If the subject matter is such that delivery would not suffice to constitute a lifetime transfer, title to the property will not vest automatically in the donee/trustee on the donor’s death but will pass to his personal representatives.

Answer 205

A

There isn’t dmc case – saying can u please hold on trust for mary – dmc giving rise for valid trust but theres no cases for it- its basically 1 bloke saying to best mate if I don’t make it can have car- straightforward gift with no trust for somine else

But there is dmc cases that have perefected outright gift

Answer 206

A

Death need not be by the contemplated cause, but gift must be made in contemplation of death generally for a valid DMC, Wilkes v Allington [1931]

doesnt matter that cause of death wasnt death contemplated- its just death generally needss to be conremplated. wilkes v allignton

Answer 207

A

Equity will however ‘perfect the gift’ by compelling the personal representative to complete the transfer if valid dmc- it beats the will, see,

Answer 208

A

Re Mead [1880] (gift of negotiable instrument)’; Birch v Treasury Solicitor [1951] (gift of money in deposit account); Sen v Headley [1991] (gift of donor’s house).

Answer 209

A

so we have to look at diff props here to see how rules play out

Answer 210

A

(i) Where the subject matter is a chattel and it has been delivered to the donee or trustee or he has been given the means of gaining access to it (such as the keys to where it is kept) the donor’s death perfects the gift, Woodward v Woodward [1991] (car keys).
- e.g handing over car keys - amount to sufficent deliv of chattel

Answer 211

A

Re Lillingston [1952] 2 All.ER184

Donor gave donee key to a trunk which contained the key to a safe deposit at Harrods which in turn contained the key to a safe deposit box at the National Safe Deposit and Trustee Co. Held:- There was a valid DMC of the jewellery in the trunk and the contents of the safe deposit boxes.

Answer 212

A

(ii) There must always be an intention on the part of the donor to part with ‘dominion’ over the property.

Answer 213

A

(iii) Where the subject matter is a chose in action e.g painting ming vase or bike, mere delivery of title documents will not suffice. (shares certif/ money in bank) so you need to handover with these choses in actionthese types)

Answer 214

A

Donor must hand over essential indicia of title (doc which demonstrate title), possession of which entitles the donee to the money or property, e.g bank deposit book, Post Office Savings Account Bank-Book, national saving certificates, cheque or promissory note payable to donor.

Answer 215

A

so its a cheque payable to donor- someone owed him moneyh before he died

Answer 216

A

(iv) Since the recent case of Sen v Headley [1991] (CA) land can now be the subject matter of a DMC.

before that case used to say coudnt have dmc with land but you can now

Answer 217

A

In Sen claimant given keys to a steel box containing title deeds, and house was promised to donee. DMC upheld.
It was stated the title deeds were the essential indicia of title (unregd. land) and had been constructively delivered to her by the handing over the keys.

(unreg freehold title house)

the equiv to title deed in reg would be land certif which confirms what is on land reg who wons prop. equiv to indico of title

Answer 218

A

Brainscape's Knowledge GenomeTM

Equity and Trusts- Constitution Flashcards

Brainscape's Knowledge Genome^TM