Formalities Flashcards
Lifetime trusts can be declared informally (exc. trusts of land)
Paul v Constance
Trusts by will
s9 Wills Act 1837 - in writing, signed by testator in presence of 2 witnesses present at same time who attest their witnessing of the signature
Declaration of a trust of land
s53(1)(b) LPA 1925 - must be proved by some writing, signed by some person able to declare the trust or by his will.
Failure to comply renders declaration unenforceable, not void
Where an express trust fails for lack of form, it will become a resulting trust (no formalities -s53(2) LPA)
Hodgson v Marks
Dispositions of subsisting equitable interests
s53(1)(c) LPA - in writing, signed by person disposing of interest/his agent lawfully authorised in writing or will
Failure to comply makes disposition void
Disposition = sale, gift, assignment or declaration of trust
Timpson’s Executor’s v Yerbury
Court will not construe an imperfect transfer of legal title as an assignment of the equitable interest
Zeital v Kaye
Disposition in s53(1)(c) covers all means whereby an equitable owner effectively transfers an interest to someone else - includes a direction
Grey v IRC - implied that writing evidencing an earlier void disposition of an equitable interest, will make the disposition valid but this is unlikely to be followed
Where the absolute beneficial owner gives oral instructions to the bare legal owner to transfer property absolutely, intending his beneficial interest to pass to the same third party (i.e. an absolutely entitled beneficiary instructs the trustee to make a third party the absolute owner of the property), the passing of the beneficial interest need not be in writing
Vandervell v IRC
Contract to assign an existing equitable interest to another - if contract is specifically enforceable, the equitable interest passes under a constructive trust (no formalities)
Neville v Wilson
Subtrust - Hayton Theory
s53(1)(c) should apply where whole interest transferred (bare subtrust) but not where only part is transferred (non-bare subtrust)
BUT uses 19th century cases - Grainge v Williams; Re Lashmar - to back up 20th century statute
Subtrust - Penner Theory
s53(1)(c) never applies as the original beneficiary never disappears completely
- there is no relationship between the original trustee and the new beneficiary
- the trustee needs the consent of both to collapse the trust
Subtrust - Green Theory
s53(1)(c) always applies as statute does not require the entire disposition (weak argument)