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6. Equity and Trusts > EXAM NOTES - Certainties, Formalities, Constitution > Flashcards

EXAM NOTES - Certainties, Formalities, Constitution Flashcards

1
Q

general structure?

A

for each item of property discuss the owner’s

  1. title
  2. intention
  3. property
  4. requirements to do what they intend
  5. the problem
  6. exceptions to the general rule
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2
Q

what are the three certainties?

A

Knight v Knight

  • intention
  • subject matter
  • objects
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3
Q

how do you decide certainty of intention

A
  • imperative words not precatory words
  • look at the will as a whole and in context
  • look to the words and conduct of the parties if necessary eg Paul v Constance “the money in my bank account is as much yours as mine”
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4
Q

what are the rules on certainty of subject matter?

A
  • Sprange v Barnard must be certainty at the outset; cannot create a trust leaving money to X with “what’s left” at their death going to Y. Purported trust grafted onto an outright gift
  • Palmer v Simmonds must identify exact property; “the bulk of my estate” is not sufficient
  • Re London Wine – a trust of unidentified tangible property will fail
  • Hunter v Moss – a trust of unidentified intangible property (here shares) will be valid
  • Boyce v Boyce – must be certainty of which beneficiaries get which share. If not, resulting trust
  • Re Golay -a “reasonable income” is a valid amount and beneficiary could chose one house out of many
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5
Q

what happens if there is no certainty of subject matter? How can this happen?

A
  • If the property itself is uncertain, no trust
  • If the ‘trust’ is really a gift, that’s how it will be treated
  • If the beneficial interests are uncertain, resulting trust
  • No uncertainty of subject matter if the means for determining it are laid down
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6
Q

what states certainty of objects is necessary?

A

Morice v Bishop of Durham

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7
Q

How is certainty of objects found?

A
  • Different depending on the type of trust
  • Fixed interest trusts – strict ‘list’ test
  • Certainty of objects of powers - in/out test
  • Discretionary trusts – the in/out test following McPhail v Doulton
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8
Q

what is the list test?

A

IRC v Broadway Cottages Trust must be possible to draw up a complete list of the beneficiaries

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9
Q

what is the in/out test

A

Re Gulbunkian’s Settlement Trusts –
o Can it be said with certainty whether any given individual is a member of the class?
o Trust does not fail because it is impossible to ascertain every member of the class

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10
Q

what are the two kinds of certainty?

A
  • Conceptual certainty – precision of language used to define the class of beneficiaries
  • Evidential certainty – how well you can prove an individual fits into the class of beneficiaries
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11
Q

is ‘relatives’ a conceptually certain term?

A

yes Re Baden’s (No 2)

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12
Q

what happens if trust is for a group of people and it fails for some?

A

you can sever Re Leek and Re Gulbenkian

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13
Q

how does the test apply to gifts subject to condition precedent?

A

Re Barlow’s WT – test for certainty is less strict

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14
Q

How can legal title to property be transferred?

A

Milroy v Lord

  1. Absolute gift
  2. Transfer to a trust
  3. Self-declaration of trust by S for B’s benefit
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15
Q

how can equitable interest be transferred?

A

Timpson v Yerbury

  1. Assign to third party directly
  2. Direct trustees to hold on trust for third party
  3. Contract for valuable consideration to assign the interest
  4. Self-declaration of himself as trustee for B
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16
Q

how is a transfer of chattels effected?

A
  • Intention to give Glaister v Carlisle

- Delivery Re Cole

17
Q

how is a transfer of land effected?

A
  • S52(1) LPA 1925 – by deed (s1 LP(MP)A 1989
    o Must be by a separate deed – cannot just endorse a conveyance Richards v Delbridge
  • Disposition of a subsisting equitable interest in land: s53(1)(c) LPA 1925 in writing signed by S or by his agent (who is authorised by S)
  • And registration under s27 LRA 2002
18
Q

how are shares transferred

A
  • Stock Transfer Act 1963 – stock transfer form, give share certificates and registration
19
Q

how are bills of exchange transferred?

A

e.g. cheques – endorsement i.e. signing

20
Q

how is money transferred

A

through simple delivery

21
Q

how are subsisting equitable interests transferred?

A
  • not necessarily land
  • Signed writing s53(1)(c) LPA 1925
  • Grey v IRC - signed writing + disposition is any transfer of interest to another party
22
Q

how is a trust of land created?

A
  • S53(1)(b) LPA 1925 declaration in writing signed by S

- S53(2) above section (and formality) does not apply to implied, resulting or constructive trust

23
Q

how is a trust of personalty created?

A

no formalities

24
Q

what is the rule in terms of self declaration of trust of an existing equitable interest for the benefit of another

A
  • E.g. B declares himself a trustee for the benefit of X, effectively creating a sub-trust
  • If B retains no portion of the trust and retains no active duties in the trust i.e. it is a ‘bare trust’ B will ‘drop out’ of the picture, leaving T as trustee for X as in Grainge v Wilberforce
  • Therefore a disposition of B’s interest: must comply with s53(1)(c) LPA 1925 signed writing
  • if B has retained active duties (e.g. it’s a discretionary trust) or has declared a trust of only part or his interest he will not have dropped out (Grainge v Wilberforce) and instead will have created a new trust, and will have to follow the appropriate rules
25
Q

what is the general rule for failed dispositions?

A

Milroy v Lord
- Equity will not assist a volunteer
- Equity will not perfect imperfect goods
- Equity will not see a failed gift as a self-declaration of trust
o I.e. a failed outright gift cannot be turned into a self-declaration of trust Jones v Lock

26
Q

what are the exceptions to the general rule about failed dispositions?

A
  1. Vandervell v IRC
  2. Choithram v Pagarani
  3. Re Rose
  4. Strong v Bird
  5. DMC
  6. Proprietary Estoppel
27
Q

what is the exception in Vandervell v IRC

A

1) Where an absolutely entitled beneficiary instructs a trustee to transfer legal title to a third party
2) with the intention that equitable title should also pass
3) then the legal title and equitable title pass together
4) and an oral instruction will suffice and s53(1)(c) does not apply

28
Q

what is the exception in Choithram v Pagarani

A
  • An oral declaration to transfer on trust (i.e. give legal title to trustees and equitable title to B) without an actual transfer of legal title was held valid because the donor was himself a trustee
  • If one trustee out of many has legal title to the property vested in him he must transfer the property to all others.
29
Q

what is the exception in Re Rose

A

Where settlor has done everything in his power to effect the transfer

  • all documents have either been sent for registration
  • or delivered to the donee Mascall v Mascall
  • further action required = invalid gift Re Fry
30
Q

How has Re Rose been extended?

A

Pennington v Waine

  • transfer as in Re Rose could be held to have applied earlier if it would be unconscionable for the donor to change his mind
  • – Reliance by B
  • – Knowledge by B
  • – Assurance to B
31
Q

What is the exception in Strong v Bird

A

vesting in a different capacity

  1. intended donee gets legal title as a personal representative
  2. S has intention to make an immediate gift to intended donee Re Freeland Freeland (S promised car to X then lent it to Y no immediacy)
  3. S’s intention continues until her death Re Gonin (after promising a house S decided to write a cheque instead)
32
Q

How has Strong v Bird been extended?

A
  • Re Steward – applied Strong v Bird to gifts + need not be only executor
  • Re Ralli – applied Strong v Bird where the intended donee gets legal title in any legitimate capacity
33
Q

What is a DMC?

A

Donatio Mortis Causa - deathbed gift Cain v Moon

  1. Gift is made in contemplation of imminent death
  2. Gift is conditional on death
  3. Delivery of the property; constructive or actual Sen v Headley (dominion or control)
34
Q

explain ‘delivery’ for a DMC

A
  • Sen v Headley giving the keys to the strongbox holding the property deeds – only the recipient of the keys had dominion/control over them
  • Or e.g. Birch v Treasury Solicitor giving bank deposit pass book
  • Or e.g. Re Weston giving post-office savings book
  • A cheque to the donee is not valid because it ends on death Re Beaumont
35
Q

what happens if an attempted creation of a trust fails for lack of certainty of object?

A

resulting trust for the settlor as in Vandervell v IRC

36
Q

explain proprietary estoppel

A

o assurance that you will receive some form of property
o Detrimental reliance

Thorner v Major
Gillett v Holt

37
Q

What is the rule if a gift in a will only goes to a certain class of people>?

A

testamentary gift subject to condition precedent

  • Re Barlow
  • allowed with a lower degree of certainty than discretionary trusts
  • eg ‘friends’ certain in Barlow but not in discretionary trusts
38
Q

is ‘friends’ sufficiently certain for discretionary trusts?

A

no - Re Gulbunkian

6. Equity and Trusts (10 decks)

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