Equity and Trusts - Intention, Subject Matter and Formalities Flashcards
For a gift to be validly created, what declaration is required?
Three certainties of:
1- Intention
2- Subject Matter
3- Object
What must be present for a declaration of trust to be validly created?
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
Intention is inferred from words or conduct
Paul v Constance
Merely precaratory words are not enough to show intention
Adams and Kensington Vestry
What is the rule against perpetuity for discretionary trusts?
Rule against remoteness of vesting (max. 125 years)
What is the rule against perpetuity for non-charitable purpose trusts?
Rule against inalienability- limited to 21 years or allow trustees to spend all trust capital on purpose
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?
The trust property has to be transferred using the correct formalities
What formality constitutes correct transfer of a chattel?
Simple physical delivery (Re Cole) or deed
If physical delivery of a chattel is impossible the item may still be considered transferred
Jaffa v Taylor Gallery
What formalities are required for the correct transfer of shares?
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
What formalities are required to transfer an interest in land?
Must be done my deed (s.52 LPA 1925) in accordance with s1 LP(MP)A 1989
What formalities are required for the transfer of an equitable interest?
53(1)(c) LPA 1925:
1- Must be in writing (Grey v IRC)
2- Signed by transferor/ authorised agent/ in a will
If the transfer (not the declaration) has been defective, will equity perfect any imperfection?
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
What are the 5 exceptions that allow equity to perfect an imperfect transfer
1- Strong v Bird 2- Re Rose 3- Pennington v Waine 4- Choitram v Pagarani 5- Vandervell v IRC
What is the rule in Strong v Bird?
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
What is the rule in Re Rose?
If every effort has been made to complete the gift equity will see it as effectively transferred
What is the rule in Pennington v Waine?
Extends Re Rose to cover imperfectly completed gifts but only if it would be unconscionable to invalidate the disposition
What is the rule in Choithram v Pagarani
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
What is the rule in Vandervell v IRC?
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)
What is the rule in Curtis v Pulbrook?
Pennington is a case of proprietary estoppel
What is the doctrine of proprietary estoppel?
If donee acted to their detriment in reliance on a promise made by the donor, the donor cannot withdraw
