Equity Will Not Perfect An Imperfect Gift

Question 1

In which case was the principle‘equity will not perfect an imperfect gift’ made into law?

Answer 1

Milroy v Lord, where it was held that if shares are not formally vested, there is no trust. The settlor must have done everything necessary to be done

Question 2

If consideration has been given, an incompletely constituted trust may be enforced. Under which equitable maxim?

Answer 2

Equity deems as done that which ought to be done

Question 3

Which statute tells the formalities for disposing of an equitable interest?

Answer 3

S53(1) LPA 1925 specifies that this must be done in writing and signed by the person disposing of it, or it will be void

Question 4

Which case shows that if unendorsed, a cheque from a third party is an ineffectual transfer?

Answer 4

Jones v Lock (1865)

Question 5

Which case establishes the four methods of disposition of equitable interests in favour of a third party?

Answer 5

Timpson’s Executors v Yerbury:

1. Assign to third party directly
2. Direct trustees to hold property on trust for a third party
3. Contract for valuable consideration to assign equitable interest
4. Declare himself a trustee of such an interest

Question 6

The disposition of an equitable interest in favour of a third party is usually an attempt to do what?

Answer 6

Avoid tax, i.e. Vanderwell v IRC

Question 7

What was ruled in Oughtred v IRC?

Answer 7

That the deed was the completion of an oral contract, and where there is a contract enforceable by SP, a constructive trusts arises in favour of the transferee

Question 8

What does disclaimed mean?

Answer 8

When a trustee declares that he does not wish to be a beneficiary. This is not considered a disposition (Re Paradise Motor Co)

Question 9

What are the formalities required for creation of a will?

Answer 9

Under s9 of the Wills Act 1837, dispositions must be in writing, signed by the testator, and attested by two independent witnesses

Question 10

What are the four primary exceptions to the maxim that equity does not perfect an imperfect gift?

Answer 10

1. Rule in Re Rose
2. Rule in Strong v Bird
3. Donatio mortis causa
4. Estoppel

Question 11

What is the rule in Re Rose?

Answer 11

If the transferor has done everything in his power to transfer title to property but is waiting on the actions of a third party, equity will regard the transfer as effective.

I.e. if someone has sent share transfer forms to the company registrar, but these have not yet been registered

Question 12

What are two cases where the rule in Re Rose applies?

Answer 12

Mascall v Mascall (gift could not be retracted)

Re Fry (transferor had not done everything in his power)

Pennington v Waine (transfer had been made)

Question 13

What is the rule in Strong v Bird?

Answer 13

If a donor makes an imperfect lifetime gift and the intended donee becomes the donor’s executor/administrator upon death, then the gift will be perfected (provided there’s no evidence to refute continuing intention)

Question 14

In the case of Re Wale does the rule in Strong v Bird apply?

Answer 14

No, because even though the testatrix declared a trust, she never transferred legal title to the trustees and then continued to treat the property as her own (indicating a lack of continuing intention)

Question 15

Which case extended the rule in Strong v Bird?

Answer 15

Re Ralli’s WT: where it was held that equity can perfect a settlement for land if the property becomes vested in the trustees in some different way, so that it’s irrelevant how the trustee became the legal owner

Question 16

What is donatio mortis causa (dmc)?

Answer 16

A special type of gift made inter vivos, but that does not take effect until and unless he dies

Question 17

Which case shows that gifts of dmc must be made in contemplation of death, but that the precise cause of death need not be expected?

Answer 17

Wilkes v Allington, where a person died of pneumonia rather than cancer

Question 18

Does giving the key to safe where an object is kept satisfy the requirements of dmc?

Answer 18

Yes, under Re Lillingston

Question 19

Does giving the means to obtain the essential evidence of title (i.e. for a house) satisfy dmc?

Answer 19

Yes, under Sen v Headley

Question 20

What happens if someone who gives under dmc recovers?

Answer 20

The gift is automatically revoked on recovery

Question 21

Is a cheque capable of passing under dmc?

Answer 21

Under Re Beaumont, If the cheque has been drawn from the donor’s own account it is not capable of passing under dmc, because it is an instruction to the bank that is revoked on death

But under Re Dillon, if the cheque is from a third party, it can pass under dmc

Question 22

“The whole point of estoppel…is that if a man has been induced to act to his detriment, he ought to be protected” What case is this from?

Answer 22

Norfolk CC v Secretary of State for the Environment [1973]

Question 23

If someone has:

1. Incurred expenditure on a property
2. Has acted in a belief that he was encouraged in that he had a sufficient interest in the property to justify expenditure
3. The person holding title has stood by knowing of his mistaken belief and allowed him to incur expenditure

Then what may be available?

Answer 23

Proprietary estoppel

Question 24

What are some cases where proprietary estoppel has been used successfully?

Answer 24

Dillwyn v Llewellyn (1862)

Inwards v Baker [1965]

Pascoe v Turner [1979]

Wayling v Jones [1993]

Question 25

Which case established how remedies ought to be awarded in cases of proprietary estoppel?

Answer 25

Plimmer v Wellington Corporation held that the court must examine all circumstances in a case to determine how equity can be satisfied

Question 26

If a settlor has covenanted to transfer property to trustees but hasn’t, can the terms of the covenant be enforced?

Answer 26

If beneficiaries have given consideration, i.e. through marriage, then it is enforceable (Pullan v Koe)

If beneficiaries are parties to the covenant, they may be able to sue for damages (Cannon Hartley)