Topic 1 - Gifts Flashcards
Reasons for formalities
- Fuller
1. Evidence
o In writing, witness statements etc
o Probative value is what matters
2. Caution
o Acts as a check for the donor against rash or hasty action
o Forces donor to think about what they are doing
3. Channelling
o Formalities bring it all together into a signal for everyone to see and understand
Statutory rules
- Land
o Law of Property Act, ss52-54 – Must be signed and in writing
o Land Registration Act 2002
o Law of Property (Miscellaneous Provisions) Act 1989, ss1, 2 – signed, writing, and witnessed - Wills
o Wills Act 1837, s9 – must be in writing, signed and witnessed - Debt
o Law of Property Act 1925, s136 – in writing, signed and witnessed - Shares
o Stock Transfer Act 1963 – Stock Transfer Form needs to be signed and delivered to company receiving shares - Personal property
o Law of property (Miscellaneous Provisions) Act 1989, s1 –
Delivery (in legally recognised form)
Intention to give (by donor)
Acceptance (by donee)
Intention (2 cases)
- Must be intention to make an immediate gift
- Have opportunity to resile from gift up until point of delivery
- Re Ridgway
o Colonel Ridgway went bankrupt – trustee is appointed to sell off property to pay off debts. If Ridgway had gifted his property to his son and daughter, they would not be owned by him and therefore the trustee could not take them away from him.
o Ridgway bought barrel of port for son Thomas when he was 18 months old. Family sell it and refer to it as Tom’s port. Ridgway also ‘gave’ some of it to daughter Alice.
o Bankruptcy happened when Tom was 21 and legally allowed to drink. Tom and Alice claimed the port as their own. Requirement for giving a gift was an immediate intention to give.
o Keeping port in cellar did not rule out immediate intention to give. However, the family occasionally dipped into port ‘to see if it was ready to drink’ – Tom only 1 ½ at time so the inference is that it was a future gift. Immediate action meant there was no gift as gift giving happens immediately if there is an immediate intention to give. For Alice’s port, Colonel had been dipping into hers too so the court decided it was still the Colonel’s port and therefore no intention to give - Day v Royal College of Music
o Composer sent some manuscripts of his compositions to his daughter’s house. Composer sent postcard to son stating ‘all books, pictures, sculptures etc were for son and daughter to share and keep or sell’ – no mention of manuscripts. Was there a gift or a loan of the manuscript? It boiled down to what etc meant.
o CofA held etc did extend to the manuscripts. CofA stated that what mattered was an objective interpretation of the outward appearance of the donor’s intention, not what he was actually thinking - the list plus etc infers it would be an expansive list and therefore a reasonable person would think he gifted everything that was posted to them including the manuscripts. CofA said that the reasonable person was infer that the words and deeds of posting the boxes would show an intention to give a gift not a loan.
Delivery - actual delivery
- Actual Delivery
o Physically handing over the property
o Re Cole
Mr Cole bought large house in London and furnished it. Later his wife came to the house – he said look its all yours. Clearly the land could not be passed in this way as there must be legal formalities of a deed etc but could the furniture be passed this way through intention and delivery? CofA said nothing had been done to transfer, even symbolically, the possession of anything – there must be a symbolic act.
o Cochrane v Moore
Intended gift was ¼ of a horse – was actually declaration of trust rather than gift
Gift must be able to be physically handed over
Delivery - symbolic delivery
- Symbolic Delivery
o Delivering part of the property that symbolises the whole of it
o Lock v Heath
Mr Heath purported to give all of his furniture to his wife. Made symbolic delivery of one chair. He said he would give all good mentioned in the inventory and showed his wife the inventory – court held this was a good gift.
The inventory was vital to indicate that the gift was not just of one chair in these facts.
The gift of one chair for a table and dining chair set would be symbolic of the gift of the whole set as a reasonable person would not assume the gift would be just one chair – have to look at intention of the party
o Rawlinson v Mort
Owner of church organ wanted to give it away. The organ was installed in the church. He took hand of organist and placed it on the organ and said words of gift.
Court satisfied that this was symbolic delivery and an effective gift. This was sufficient intention as it was impossible to deliver the organ
Delivery - constructive delivery
o No physical delivery of any subject matter of the gift – instead putting donee in suitable starting point so they can take possession of the property themselves
o Wrightson v McArthur and Hutchinson
Donor locked up the pledged goods in two rooms in their premises and handed over keys and a letter to explain what was going on which was enough to evince the intention. Defendant went insolvent and so was there a valid transfer to the claimant that they took the goods because they owned them and the trustee in bankruptcy did not?
The outside key was not provided to the claimants but because claimants had right of access to the premises, passing the room keys to where the goods were kept was sufficient to constructively pass possession.
They have keys, have right to get in, have ability to take the goods – this all amounted to constructive delivery.
o Thomas v Times Book Company
Poet told BBC producer that he could keep the manuscript of poem if he found it (he had lost it) and he furnished BBC producer with number of likely locations – BBC employee found the manuscript and kept it. Poet later dies and his widow wanted the manuscript back. Ownership is durable, and you get to keep it unless something else intervenes. His widow wanted it back, but she was unable to get it back because the poet had given away title to it.
By giving away the likely location was enough to put the BBC producer in the position he needed to take possession of the manuscript. – this coupled with words of gift (clear intention to gift) was enough.
Acceptance
- Acceptance is presumed and consent is not required
o Standing v Bowring - The donee must express his or her refusal of the gift in order to prevent title passing
o Dewar v Dewar
Equitable interventions - the rule in Strong v Bird
- Exception to the requirement of delivery
- Strong v Bird
o If title vests in the intended donee by another route, you don’t need the requirement of delivery
o Donor owed the donee money. Donor died before giving the money to the donee. Ordinarily this would mean it was not delivered.
o However, the donor had appointed the person he owed money (the donee) as his executor of his will. When you die, all of your property vests in your executor. Court held the continued intention to give is supplied by the need to pay the debt and the delivery is supplied by fortuitous vesting (luck) – however it is an exception to delivery only, an intention to give is still required. - Re James
o Donor promised his daughter a house – failed to follow through on the promise. He did not make a deed of it and fulfil requirements of transfer of land. It was still in his title when he died.
o Died without a will – rather than an executor, an administrator is appointed. The administrator happened to be the donor’s daughter. When someone dies, all property vests in either the executor or the administrator. By sheer chance, the daughter got the house (fortuitous vesting – luck) - Re Gonin
o In cases such as Strong v Bird, the executor is chosen by the donor so it is not entirely luck.
o But appointment of administrator is often pure chance as lots of different people qualify to be administrator and they are not specified by the donor. Applied the rule anyway in this case.
Equitable interventions - Milroy v Lord
‘there is no equity in this court to perfect an imperfect gift’
Settlor must have done everything that was necessary for him to do
Equitable interventions - Re Fry
o Re Fry
Failed to obtain consent of the treasury – therefore testator had not done everything that was required to be done by him
If further action is required from the donor, equity will not perfect an imperfect gift
Equitable interventions - Re Rose (plus academic)
o Re Rose
Last Act Doctrine – donor should have done all that was necessary to be done to complete the gift, short of registration of the transfer. If there is nothing left for the donor to do, equity will perfect what would otherwise be an imperfect gift at common law
Eric Rose transfers 20,000 shares to his wife using stock transfer form – Stock Transfer Act1963 requires this form to be executed, signed and delivered to the company for registration. The forms were delivered to the company. They were stamped for tax on 12th April and registered on books of company on 30th June however the transfer isn’t perfected until those are done. Inland Revenue claimed estate duty from tax rules. The gift was made too late. If made gift before 10th April, it would have been untaxable but because they made the gift after the 10th April deadline, estate duty fell due. Problem of donee (Mrs Rose) being landed with enormous tax bill because the company was tardy at registering the shares. Court applied the last act doctrine – Eric Rose had done everything in his power to transfer the shares to his wife before the deadline so equity intervened and said even though the gift only became perfect at common law later, equitable title moved so Mrs Rose owned the shares in equity before the deadline, which meant the tax wasn’t due.
Sarah Lowrie/Paul Todd – Re Rose ‘allows for the desired result of preventing transfers being frustrated by lack of common law formality, while at the same time not imposing onerous duties on somebody who has not accepted them’
Equitable interventions - Mascall v Mascall
‘equity will not come to the aid of a volunteer’
If the donee has under his control everything necessary to constitute his title, without any further assistance from the donor, the donee needs no assistance from equity and the gift is complete
Equitable interventions - Choithram v Pagarani
‘equity will not strive officiously to defeat a gift’
Attempt to make law less strict and more forgiving – makes last act doctrine have very wide discretion
Would be unconscionable and contrary to the principles of equity to allow him to resile from his gift – donor cannot have to do everything which he can to transfer the property to the donee
Equitable interventions - Pennington v Waine (plus 2 academics)
Clarified Re Rose exception by shifting focus away from formalities of donor completing all steps but rather whether it would be unconscionable to resile from the gift
* No comprehensive list of factors making it unconscionable for the donor to change his/her mind – depends on evaluation of all the relevant considerations (multifactorial approach)
* Not intended to detract from requirement that a donor should comply with any formalities required by the law
Benevolent construction of words of gift
* Equity will construct the words used to the true intention of the parties
FACTS:
* Mrs Ada Crampton sought to transfer 400 shares to her nephew and make him the director of the company. Articles of Association of this company required directors to hold at least one share in it. She executes stock transfer form, that she sends to Mr Pennington (the company’s auditors). Auditors wrote to nephew informing him of his share transfer saying no action is required on his part. They also arranged for his appointment as a director. What they didn’t do was transfer the stock transfer form to the company, they just left it on file. This meant the procedure was not followed and at law there was no gift of the 400 shares. Mrs Crampton died before she could sort the mess out. Was there a valid equitable transfer of shares on the Re Rose principle before her death? Problem was, unlike in Re Rose, the transfer form hadn’t been sent to the company so the donor and her agents (Mr Pennington) had not done everything within their power. CofA said it was transferred in equity under Re Rose doctrine
* In Pennington v Waine, the gift was made of Ada’s free will. Nephew knew this and had signed the form and had been told no further action was necessary. He’d agreed to become a director. Court said it was too late for Ada to resile from the gift at this point.
Jonathan Garton
* Pennington should not be seen as introducing a new exception to the rule against perfecting imperfect gifts; rather it is an opportunity to recast Re Rose in a theoretically sound fashion by shifting focus away from extent of formalities and onto the conscience of the transferor
Margaret Halliwell
* Pennington left law in realm of unfettered judicial discretion
Equitable interventions - Zeital v Kaye
Revert back to Re Rose because Pennington had ‘special facts’
