Formalities - rev notes

Question 1

ITG - Milroy v Lord - 3 ways for A to benefit B with property

Answer 1

• A makes a gift to B = transfers both legal title and EI to B
• A transfers to C to hold on trust for B = C gets legal title, B gets EI
• A declares he holds on trust for B = A keeps legal title, B gets EI

Question 2

ITG - Starting point

Answer 2

= Milroy v Lord : equity will not (generally) intervene to assist a volunteer / imply a trust to perfect an imperfect gift,

Question 3

ITG - exceptions : equity will sometimes intervene to perfect an imperfect transfer (5)

Answer 3

(1) fortuitous vesting
(2) donatio mortis causa
(3) Re Rose
(4) Proprietary Estoppel
(5) Unconscionability

Question 4

ITG - Fortuitous vesting (1)

Answer 4

If A promises to transfer property (or that she will not enforce repayment of a debt) to B, but fails to effect the transfer in her lifetime, gift fails, bcs equity will not assist a volunteer = Milroy v Lord

but if B receives the property in another capacity (eg as executor of A’s estate), the courts consider the transfer to be perfected = Strong v Bird (1874)

Question 5

ITG - Fortuitous vesting (2) - requirements

Answer 5

Set out in Strong v Bird :
- clear intention to make inter-vivos gift to transferee, unchanged until death
- intended transferee obtains legal ownership by appointment as executor or personal representative

Question 6

ITG - donatio mortis causa

Answer 6

= deathbed request superseding a will (DMC)

Requirements for DMC reaffirmed by CA in *King v Dubery** (2015) :
- bequest must be made in contemplation of imminent death (for a specific reason)
- bequest must be conditional on death
- A must deliver ‘dominion’ of the property to B = give B physical possession or means of accessing it or documents evidencing entitlement to possession (eg deeds)

Question 7

ITG - Transferor did everything in his power*

Answer 7

= Re Rose : where A has done everything he could to perfect transfer to B, and the reason that the gift has failed is beyond B’s control, equity considers done that which ought to be done = will perfect the gift by implying a CT in favour of B

Question 8

ITG - Estoppel (1) - 4 elements

Answer 8

1) A representation (as to facts or law, claimed to give rise to the estoppel)
2) Reliance by C on the representation
3) Detriment to C
4) unconscionability in D’s behaviour

Question 9

ITG - Estoppel (2) - authorities

Answer 9

Three main elements in Thorner v Major : representation, reliance and detriment
+ Unconscionability = Cobbes v Yeowman’s Row : ‘if the other elements are present but the result does not shock the conscience of the court, the analysis must be looked at again’ (Lord Walker)

Question 10

ITG - Estoppel (3) - the remedy

Answer 10

Remedy / how to ‘satisfy the equity’ is in the hands of the court = will not always be full performance

=> holding promisor to his promise = starting point, but if promisor can show that is disproportionate, court can give smth ≠ = Lord Briggs in Guest v Guest

Question 11

s53(1)(c) - the rule

Answer 11

disposition of a subsisting equitable interest must be in signed writing (or else is void)

Question 12

s53(1)(c) - the statute

Answer 12

LPA 1925, s53(1)(c) : “A disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.”

/!\ subject to s53(2) : “This section does not affect the creation or operation of resulting, implied or constructive trusts.”

Question 13

s53(1)(c) - 1st creation of a trust

Answer 13

Arden LJ in Kinane v Mackie Konteh, relying on Lord BW in Westdeutsche (no EI in absolute O)
=> Engraftments view : creation of trust not a ‘disposition’ of a ‘subsisting’ EI bcs no separate equitable interest in property until the legal and equitable estates have been divided

= EI didn’t exist until creation so not subsisting

/!\ ≠ on division of rights view : creation would be disposition so all trusts would have to be created in writing – doesn’t make sense

Question 14

s53(1)(c) - creation of express sub-trust

Answer 14

doesn’t apply : creating sub trust same as creating new trust, B2’s rights are engrafted on B1’s, B1’s rights don’t technically pass to B2 (although in practice B1 sometimes ignored) so what B2 gets is smth new = Nelson v Greening & Sky

Question 15

s53(1)(c) - direction to T to hold on trust for X

Answer 15

generally, is a disposition (‘natural meaning’) = Grey v IRC

Question 16

s53(1)(c) - direction to T to transfer outright

Answer 16

not a disposition = Vandervell v IRC, per Lord Upjohn: when B has whole BO, such that can direct T as to LO as well as BO, outside mischief statute of fraud (and successor LPA) aims to prevent

/!\ questionable whether really outside mischief

Question 17

s53(1)(c) - direction to T transfer to X on trust for Y

Answer 17

trust = somewhere btw Grey and Vandervell – no authority yet

=> Plausible that reasoning in Vandervell wide enough to encompass this type of case: Lord Upjohn seems to treat “giv[ing] directions to his bare trustee with regard to the legal […] estate” as a sufficient condition for the disapplication of s.53(1)(c)

Question 18

s53(1)(c) - disclaimer

Answer 18

= refusing to be a B : refusing an EI not a ‘disposition’ of that EI = Re Paradise Motor Co, per Danckwerts LJ

Question 19

s53(1)(b) - the rule

Answer 19

** = signed writing is required to evidence the DOT**

Question 20

s53(1)(b) - the statute

Answer 20

“A declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will”

/!\ subj to s53(2) exception = RTs, ITs & CTs

Question 21

s53(1)(b) - abt evidence ?

Answer 21

about evidence rather than enforceability / validity = Ong v Ping

Question 22

s53(1)(b) - Ong v Ping

Answer 22

• 3P purchases title to a house, intending to hold it on trust for one of her sons and his children, executes a trust deed to that effect but forgets to specify what she is holding on trust
• 2 signed letters by 3P that actually refer to the property, w/ the address – letter purporting to cancel the trust – Q = was there a trust ?
• Court held that letter to cancel the trust was sufficient to cancel it => must mean that there was a trust before that, bcs letter can’t cancel it if not existing yet => letter only evidence of a prior oral understanding

Question 23

s53(1)(b) - Rochefoucauld v Boustead - the decision

Answer 23

Situation:
* C held titles to coffee estates, mortgaged them to Dutch company = transferred titles in exchange for equitable right to repurchase upon repaying debt
* C arranged for manager = D to repurchase the title (owed money to him instead) – C wanted to conceal her interest in the land bcs divorce proceedings, D meant to hold on trust for her but no writing
* D immediately re-mortgaged title
* Years later, C asked D to account as T – but didn’t have signed writing to prove the trust

Lindley LJ (CA) :
* Signed writing not needed to create a trust, only to prove its existence : rule in s53(1)(b) (then s7 of the Statute of Frauds 1677) is a rule of evidence
* That evidentiary rule cannot be relied on to commit fraud: party trying to deny the existence of a trust which in fact exists will not be allowed to do so bcs whole point of the statute = prevent frauds, not facilitate them

=> s7 disapplied bcs trying to use it to commit fraud, therefore there was a trust recognised by the court

Question 24

s53(1)(b) - Rochefoucauld v Boustead - what kind of trust ? (1a) Express

Answer 24

= Lindley LJ in Rochefoucauld itself an express trust, declared orally but still enforceable despite lack of formality bcs T was trying to use lack of formality to defraud B

Question 25

s53(1)(b) - Rochefoucauld v Boustead - what kind of trust ? (1b) pb w/ ET analysis (3)

Answer 25

1. Should’ve been void / unenforceable (dep whether s53(1)(b) substantive or evidential) – but that’s the whole point of the case (disapplying the statute to prevent fraud)
2. Disapplication of statute = Parliamentary Sovereignty problem (Penner)
   => but court trying to protect the purpose of the statute (prevent fraud)
   /!\ preventing one kind of fraud but could be facilitating another
3. No settlor w/ unencumbered title who could declare the trust = Mitchell & Mitchell
   - Comtesse didn’t have title, only equity of redemption (mortgage)
   - Mortgage company didn’t have unencumbered title (subj to C’s equity of redemption)
   - Boustead : financed the transaction by mortgaging the properties = no point in time where he has unencumbered title either

Question 26

s53(1)(b) - Rochefoucauld v Boustead - what kind of trust ? (2) Constructive

Answer 26

Alternative solution = a constructive trust // that imposed in Bannister v Bannister  based on receipt subject to condition (and unconscionability of ignoring condition)

Bannister v Bannister : D owned 2 cottages, sold them to C below mk price, orally ag that C would let her live there rent free until her death  C sought to evict D, CA held that D held cottages on CT for D, bcs unconscionable to allow him to go back on ag = what enabled him to get cottages below mk price

Question 27

s53(1)(b) - Rochefoucauld v Boustead - what kind of trust ? (3) Resulting

Answer 27

= Hodgson v Marks : C transferred home to lodger (L), orally ag that she retained BI, L sold to D1 who mortgaged to D2 => CA found that house held on RT trust for C, bound D1&D2

=> Russel LJ : “If an attempted express trust fails, that seems to me just the occasion for implication of a resulting trust, whether the failure be due to uncertainty, or perpetuity, or lack of form”

Question 28

s53(1)(b) - is it useless ? - meaning of fraud

Answer 28

Lindley LJ in Rochefoucauld: “[I]t is a fraud on the part of a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land himself”

=> if ‘fraud’ = denying there is a trust bcs not evidenced in writing, where in fact there is one : makes s53(1)(b) completely useless, bcs disapplied precisely when being any use

Question 29

s53(1)(b) - is it useless ? - short answer

Answer 29

Yes bcs disapplied or circumvented in almost every situation where it could have effect

Question 30

s53(1)(b) - is it useless ? - the 4 situations

Answer 30

• B conveys rights to T, understanding btw T & B that T is to hold on trust for B = Bannister
• X conveys rights to T, understanding btw T & B that T is to hold on trust for B = Rochefoucauld
• X conveys rights to T, understanding btw X & T that T is to hold on trust for B = Solomon v McCarthy
• T declares that T holds rights on trust for B = self declaration (no authority)

Question 31

s53(1)(b) - is it useless ? - Solomon v McCarthy

Answer 31

Situation : D buys title to house, transfers to C, C ag that holds title for her and D as TIC, D ag that when transferred, oral unerstanding that C holding on trust for D’s children = X

=> Court held that T didn’t hold on tryst for X => statute can be dissaplied in 2 party situaitons but dissaplying it in 3 party situations leaves it ‘witohout effective scope’

=> Giving effect to trust in favour of 3P not necessary to prevent fraud (by T) : C not intended to take beneficially so RT in favour of D

Question 32

s53(1)(b) - is it useless ? - csq of Solomon

Answer 32

• where A conveys to B, w/ oral ag that B holds on trust for A, court disapplies statute and allows this to be proved without signed writing (Rochefoucauld, Bannister)
• where A conveys to B w/ oral ag that B holds on trust for C, trust cannot be established without compliance w/ the statute (not disapplied) bcs otherwise statute is left without scope => sufficient to prevent fraud that B holds on trust for A (= Solomon) = still circumvented

Question 33

s53(1)(b) - is it useless ? - Georgiou’s criticism of Solomon

Answer 33

• rule protects C from being defrauded by B, doesn’t protect C if A is acting together w/ B
• trust for C is unproved, not void (rule of evidence)
• so B is holding on trust simultaneously for A and C
• trust unenforceable by C => so B gets power to choose who to favour