Formalities and Constitution Flashcards
What three types of disposition are there? What is the authority?
- Gift
- Trust
- Self-declaration of trust
(Milroy v Lord)
What steps are required to make a valid gift?
- Intention
2. Transfer of legal title
What steps are required to make a valid trust?
- Three certainties (Knight v Knight)
- Formalities (Paul v Constance, s53(1)(b) and (c) LPA 1925 or s9 Wills Act 1837)
- Constitution
If the gift/trust is invalid what is the general rule?
“Equity will not assist a volunteer”, “Equity will not perfect an imperfect gift” (Milroy v Lord).
What are the exceptions to the general rule “Equity will not perfect an imperfect gift”?
- Re Rose and Pennington v Waine
- Choithram v Pagarani
- Strong v Bird and Re Ralli
- Donatio Mortis Causa (Cain v Moon)
- Proprietary Estoppel (Gillet v Holt)
- Vandervell v IRC
What does s53(1)(b) LPA 1925 relate to and what does it require?
Creations of trusts of land must be manifested in signed writing.
What does s9 Wills Act 1937 require for the creation of a testamentary trust?
Signed writing witnessed by two others.
What does s53(1)(c) LPA 1925 relate to and what does it require?
Dispositions of an equitable interest must be made in signed writing at the time of disposition.
What rule applies to the creation of trusts of property other than land?
There must be intention on the part of the settlor which may be found in writing or by oral declaration or even conduct (Paul v Constance).
What ways are there of disposing of an equitable interest?
Timpson’s Executors v Yerbury says there are four ways of disposing of an equitable interest:
- B assigns to X
- B directs TT to hold for X (Grey v IRC)
- B contracts to assign to X (Neville v Wilson)
- B holds on sub-trust (Re Lashmar)
What exception is there to the rule that dispositions of an equitable interest must be made in writing? What is the rationale for this exception?
If the beneficiary is the absolute owner of an equitable interest and he directs TT to transfer legal title, intending to transfer equitable title with it, then the equitable will go along (Vandervell v IRC). This is because the beneficiary is trying to make a gift and under Saunders v Vautier the beneficiary could collapse the trust and make that gift without complying with s53(1)(c).
What is meant by ‘constitution’?
Vesting legal title in the trustees.
What are the appropriate methods of constitution for the following:
- Land
- Chattels
- Shares
- Bills of exchange
- Money
- Choses in action
- Equitable interests?
- Freehold or leaseholds more than three years should be transferred by deed (s52 LPA 1925) and registered (s27 LRA 2002).
- Chattels should be delivered (Re Cole) or transferred by deed of gift.
- Shares should be transferred by way of signing a stock transfer form and sending the form with the share certificates to the company registrar for registration.
- Cheques should be ‘endorsed’ by signing the back (Jones v Lock).
- Money needs to be delivered.
- Choses in action are transferred by writing to the transferee and to the debtor (s136 LPA 1925).
- Equitable interests should be disposed by signed writing at the time of disposition (s53(1)(c) LPA 1925).
If a gift fails is it possible for it to become a self-declaration of trust?
No (Jones v Lock and Richards v Delbridge).
How does the exception in Re Rose work?
If the donor or settlor has done everything in his power but the gift/trust has failed because either a third party (Re Rose) or the donee (Mascall v Mascall) has not done their part, then the court will perfect the gift/trust. If there is still something the donor/settlor should do the exception will not work (Re Fry and Zeital v Kaye).
