Equity and Trusts - Intention, Subject Matter and Formalities

Question 1

For a gift to be validly created, what declaration is required?

Answer 1

Three certainties of:
1- Intention
2- Subject Matter
3- Object

Question 2

What must be present for a declaration of trust to be validly created?

Answer 2

1- Three certainties
For intention, there must be a binding obligation on the trustee
2- Beneficiary principle
3- Rules against perpetuities
4- If declaration of self as trustee over land must be evidenced in writing signed by the transferor (53(1)(b) LPA). Otherwise no formalities for declaration

Question 3

Intention is inferred from words or conduct

Answer 3

Paul v Constance

Question 4

Merely precaratory words are not enough to show intention

Answer 4

Adams and Kensington Vestry

Question 5

What is the rule against perpetuity for discretionary trusts?

Answer 5

Rule against remoteness of vesting (max. 125 years)

Question 6

What is the rule against perpetuity for non-charitable purpose trusts?

Answer 6

Rule against inalienability- limited to 21 years or allow trustees to spend all trust capital on purpose

Question 7

If there is a transfer (gift or trust with someone else as trustee set up) there has to be proper constitution. What does this mean?

Answer 7

The trust property has to be transferred using the correct formalities

Question 8

What formality constitutes correct transfer of a chattel?

Answer 8

Simple physical delivery (Re Cole) or deed

Question 9

If physical delivery of a chattel is impossible the item may still be considered transferred

Answer 9

Jaffa v Taylor Gallery

Question 10

What formalities are required for the correct transfer of shares?

Answer 10

1- Fill in STF and Share Certificate
2- Send STF and Share certificate to transferee
3- Transferee sends STF and cert. to company to register them as new owner

Question 11

What formalities are required to transfer an interest in land?

Answer 11

Must be done my deed (s.52 LPA 1925) in accordance with s1 LP(MP)A 1989

Question 12

What formalities are required for the transfer of an equitable interest?

Answer 12

53(1)(c) LPA 1925:
1- Must be in writing (Grey v IRC)
2- Signed by transferor/ authorised agent/ in a will

Question 13

If the transfer (not the declaration) has been defective, will equity perfect any imperfection?

Answer 13

General rule: Milroy v Lord
1- Equity will not perfect an imperfect gift
2- Equity will not benefit a volunteer
3- Equity will not construe a trust from an invalid gift

Question 14

What are the 5 exceptions that allow equity to perfect an imperfect transfer

Answer 14

1- Strong v Bird
2- Re Rose 
3- Pennington v Waine
4- Choitram v Pagarani
5- Vandervell v IRC

Question 15

What is the rule in Strong v Bird?

Answer 15

On the death of the donor, donee can claim legal title if:
1- Donee becomes executor/ PR/ Administrator of donor
2- Transfer does not meet FORMALITIES for transfer
3- INTENTION to make IMMEDIATE GIFT by donor
4- Intention continues UNTIL DEATH

Question 16

What is the rule in Re Rose?

Answer 16

If every effort has been made to complete the gift equity will see it as effectively transferred

Question 17

What is the rule in Pennington v Waine?

Answer 17

Extends Re Rose to cover imperfectly completed gifts but only if it would be unconscionable to invalidate the disposition

Question 18

What is the rule in Choithram v Pagarani

Answer 18

Equity may interpret an imperfect gift as a trust if the settlor appoints himself as one of a number of trustees. Equity will not officiously strive to defeat a gift

Question 19

What is the rule in Vandervell v IRC?

Answer 19

1- Equitable interest is under a bare trust
2- Beneficiary directs trustee to transfer the equitable estate with the intention of also transferring the legal estate
3- s53(1)(b) will not apply and oral instruction will be sufficient
4- Only applies if the legal estate is being transferred (Zeital v Kaye)

Question 20

What is the rule in Curtis v Pulbrook?

Answer 20

Pennington is a case of proprietary estoppel

Question 21

What is the doctrine of proprietary estoppel?

Answer 21

If donee acted to their detriment in reliance on a promise made by the donor, the donor cannot withdraw