Formalities

Question 1

Lifetime trusts can be declared informally (exc. trusts of land)

Answer 1

Paul v Constance

Question 2

Trusts by will

Answer 2

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

Question 3

Declaration of a trust of land

Answer 3

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

Question 4

Where an express trust fails for lack of form, it will become a resulting trust (no formalities -s53(2) LPA)

Answer 4

Hodgson v Marks

Question 5

Dispositions of subsisting equitable interests

Answer 5

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

Question 6

Disposition = sale, gift, assignment or declaration of trust

Answer 6

Timpson’s Executor’s v Yerbury

Question 7

Court will not construe an imperfect transfer of legal title as an assignment of the equitable interest

Answer 7

Zeital v Kaye

Question 8

Disposition in s53(1)(c) covers all means whereby an equitable owner effectively transfers an interest to someone else - includes a direction

Answer 8

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

Question 9

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

Answer 9

Vandervell v IRC

Question 10

Contract to assign an existing equitable interest to another - if contract is specifically enforceable, the equitable interest passes under a constructive trust (no formalities)

Answer 10

Neville v Wilson

Question 11

Subtrust - Hayton Theory

Answer 11

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

Question 12

Subtrust - Penner Theory

Answer 12

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

Question 13

Subtrust - Green Theory

Answer 13

s53(1)(c) always applies as statute does not require the entire disposition (weak argument)