Formalities Flashcards
s53(1) LPA 1925
The need for a trust respecting any land to be in a deed
Gardner v Rowe 1828
Failure to comply with formalities makes the trust unenforceable
Equity maxim relevant to formalities
Equity will not allow a statute to be used as an engine of fraud
Rochefoucauld v Boustead 1897
F: D orally agreed to hold land for R, R sold land
I: Is it unconscionable?
H: D could not take advantage of the lack of formality to deny the trust, so D held proceeds on trust for R
Bannister v Bannister 1948
H: A agreed to convey a house to B, with A to live there rent-free for life, B sought possession
I: Is it unconscionable?
H: Yes, so court enforced trust for A despite lack of formality
What is the nature of the s53(1)(b) trust?
First considered to be express, but then constructive so that it would fall within s53(2) - no formalities required
s53(1)(c) LPA 1925
Dispositions of equitable interests
Methods of disposal of equitable interests
- Assignment
- Direction to trustees
- Contracting to assign
- Declaration of trust of equitable interest
Failure to comply with requirements of disposition of equitable interests
Makes the disposition void
Key features of s53(1)(c) transactions
- Equitable interest moves to someone else
- Equitable interest is subsisting
- Equitable interest is not extinguished
Is assignment of B’s equitable interest to A a disposition?
Yes, see Re Danish Bacon 1971
Is a declaration of a new trust a disposition?
Not a disposition as no subsisting equitable interest
Is a disclaimer of interest a disposition?
No, see Re Paradise Motor Co 1968
Is a direction to a trustee a disposition?
Yes, see Grey v IRC 1960
Is transferring legal and equitable interests together a disposition?
No, but see Vandervell v IRC 1967 - if an option to buy back retained, then RT and then it is
Are specifically enforceable contracts to assign the equitable interest a disposition only when the assignment takes place?
No, equity treats as done what needs to be done, so if contract specifically enforceable, equity treats transfer as complete at time of contract
Oughtred v IRC 1960
F: Shares held on trust for O for life, and then for P, oral agreement for consideration that P would release remainder interest to O, deed then confirmed shares held on trust for O absolutely
I: Was there a need for writing?
H: No, as it was CT, no need for writing
s8 Wills Act 1837
Formalities for a will
Failure to comply with formalities in a will for trusts
The trust will fail
Where do secret trusts operate?
Outside the testamentary formality requirement
Fully secret trust
Testator leaves property to a named individual in will, intends will to hold on trust for benefit of another, the will makes no indication of the intention that there should be trust
Half-secret trust
Same as fully secret, but existence of the trust mentioned, just not the beneficiary
Requirements for a secret trust
- Intention to create a trust
- Communication of the trust to the legatee
- Acceptance of the trust by the legatee
In fully secret trusts, when does the testator have to communicate the terms to the legatee?
Testator must communicate terms to the legatee and by accepted by him before testator’s death
Re Boyes 1884
F: Existence of a FS trust communicated and accepted prior to death, but beneficiaries only revealed in letters found after death
I: Was there a secret trust?
H: No
Re Colin Cooper 1939
Changes to terms of FS trusts also must be communicated
In FS trusts, does the communication have to be before or after the will is made?
Doesn’t matter
In HS trusts, when do the terms have to be communicated to the legatee?
Before, or at same time as execution of the will, see e.g. Blackwell, Re Keen
Re Keen 1937
F: Communication to ST prior to execution of the will, but will referred to “such persons as may be notified by me”
I: Was there a HS trust?
H: No, as this inconsistent with prior notification
Consequences of a failed FS trust
Usually, the legatee will take absolutely, unless secret trust accepted by legatee but testator adds further property, in which case only the further property is taken absolutely, see Re Colin Cooper
Consequences of a failed HS trust
Legatee holds on RT for the testator’s estate
How does dehors the will theory view secret trusts?
As express trusts
