Express Trusts - Basics Flashcards
What is a trust?
Separation of legal and equitable title
What is a settlor?
Where the property begins
- can either declare themselves trustee or transfer legal title to others (would lose control)
What formalities does Law of property act 1925 s53 create?
Signed writing required for:
- Creation of interests in land - Declaration of trust over land - Transfer of pre-existing equitable interests
Distinction of 3 cateogies - what happened in jones v lock 1865?
○ A cheque handed to a baby
○ Jones didn’t make provisions for one of his children so he sued saying he was given cheque of £900 when he was a baby
○ Put cheque in safe and died 6 days later
○ Words show there was an intention to give baby the cheque as gift
○ But formality for giving cheque is it has to be endorsed so its failed here, cant be category 1 transfer as gift
○ Equity then argues this was a cheque held on trust for the child, which would get around formalities as self declaration of trust doesn’t require transfer - but court said the words couldn’t be construed as self declaration of trust, it was intended as a gift, so harsh outcome here
Distinction of 3 categories - Richards v Delbridge case
○ Transfer and declaration did not match
○ Delbridge shortly before death tried to transfer business to grandson, so created memo trying to give lease of trade and business to grandson - but he delivered it to his daughter, the grandsons mother (could be considered agent of grandchild) - but there are formalities needed for this like a deed
○ Grandson tries same argument (jones v lock) saying it looked like gift but wanted to construe it as trust
○ Court again said no as it was plainly meant to be a gift that had been done wrong
Distinction of 3 categories - Paul v Constance 1977
the money is as much yours as mine’
○ Constance parted with wife and met new woman Doreen Paul, moved in with her
○ Had industrial accident and awarded money, invested it in bank account in his own name
○ He died with no will
○ The beneficiary of the deceased wasn’t Paul but his estranged wife
○ Dennis had repeated the above phrase all the time, and they treated the account as if it was both theirs as both deposited into it
○ Words and acts supported meaning contended for by Paul
○ Seen as vague but discernible declaration of a trust
○ So account was a trust with Paul and Constance as equal beneficiaries, so Paul got half of the money in the end
○ Shows court isn’t looking for technical words, just the words and actions to support the concept of a trust
Type 3 - Choithram v Pagarani 2001
○ Settlor Self declaration by one of several trustees
○ Donor P made lot of money in supermarkets in Africa, close to death and created philanthropic foundation - said he was going to give all money to the foundation but died before transfer completed
○ So normally if this happens its game over for the trust (So large family get the money instead of the foundation)
○ Council fudged it and treated it more like type 2 self declaration case when it was plainly more of a type 3 case
○ Lord Browne Wilkinson ‘equity will not strive… to defeat a gift’
○ Adopted benevolent construction of P words, extended what P meant by the words and basically blurred together type 2 and 3 - goes against Milroy v lord
○ So is equity becoming less strict and finally coming to the rescue now?equitable aids
Equitable aids - strong v bird 1874
○ Fortuitous vesting on death of property owner
○ In common law got to be delivery of gifts
○ But in this case the receiver was the executor, so delivery not necessary and they got it
Equitable aids - application of strong in re rallis WT 1964
○ Settlor died and will transferred the property to the intended trustee
○ Rallies trustee was also the executor of his will so when he died entire estate was vested in the executor who just so happened to be the trustee as well
○ So now executor who is also trustee has fully fledged trust with trust deed and legal title to property, so can now start managing the trust the way the decreased intended
Re rose 1952 is another example of this
What are certainties?
Requirements for trust to be effective once constitution has been established
Can be applied to gifts and trusts but more often to trusts
(these are for express trusts and gifts, not implied trusts)
Which case gives us the 3 certainties?
Knight v knight 1840, 68
What is the first certainty?
- if the words are so used, that upon the whole, they ought to be construed as imperative
○ Words must be clear
What is the second certainty?
if the subject of the recommendation or wish be certain
○ Subject matter of the property must be certain, like clear sum of money or whatever
What is the third certainty?
- if the objects or persons intended to have the benefit of the recommendation or wish be also certain
Got to know who to give it to and who to not
What is the more modern approach of Re Hays 1982?
- Court looking to uphold trusts, not to send people away with nothing
- How far can this go?
