BPP GDL Study Notes Ch 5: Constitution

Question 1

What is the leading case on constitution? What issues developed from it?

Answer 1

• Milroy v Lord
  1) settlor must follow the methods appropriate to transferring the property
  2) settlor must appropriately confer the benefit of his property to another
  3) judge must be aware that equity will not perfect an imperfect gift

Question 2

How is legal estate in land transferred?

Answer 2

• by deed: s52(10 LPA 1925

Question 3

What constitutes a deed? Where is a deed defined?

Answer 3

• s1 LP(MP)A 1989. Must be:
• written
• signed
• witnessed by at least one independent witness
• describe itself as a deed
• be delivered

Question 4

What else could a deed be called?

Answer 4

• if the land is unregistered freehold the deed is a conveyance
• if the land is registered at HM Land Registry the deed is called a transfer.
• if the land is a leasehold the lease is called an assignment

Question 5

How are shares in a UK incorporated company transferred?

Answer 5

Stock Transfer Form and registration

• Stock Transfer Act 1963:
• shares must be transferred by the transferor signing a stock transfer form in favour of the transferee
• transfer must be registered in the company’s share register
• title passes on registration

Question 6

Can a company refuse to register a share transfer?

Answer 6

• public limited companies generally cannot refuse to register
• private limited companies often restrict share transfers and directors may restrict transfers based on this,.

Question 7

How are chattels transferred?

Answer 7

• deed of gift, or
• actual delivery
• plus intention to transfer by transferor

Question 8

How can bills of exchange be transferred? Give an example of a bill of exchange?

Answer 8

• eg a cheque
• for a BoE in the name of the transferor:
• endorse the cheque (sign the back)
• Bills of Exchange Act 1882

Question 9

How is money transferred?

Answer 9

• only by actual delivery. Cheques etc don’t transfer until they are cleared.

Question 10

How are choses in action transferred?

Answer 10

• in writing given to the debtor

- s136 LPA 1925

Question 11

How are equitable interests transferred?

Answer 11

• signed writing

- s53(1)(c) LPA 1925

Question 12

How are debts transferred?

Answer 12

• debts are choses in action

- therefore in writing given to the debtor

Question 13

How can a settlor DURING HIS LIFETIME confer the benefits of property on another?

Answer 13

1) absolute gift to B
2) transfer to trustees to hold on trust for B (settlement by transfer)
3) declares himself a trustee for B (declaration of trust)

Question 14

How can equitable interests be disposed of? According to what case?

Answer 14

Timpson’s Executors v Yerbury

1) assign directly to 3rd party
2) direct trustees to hold on trust for 3rd party
3) contract for valuable consideration to assign equitable interest to 3rd party (sell)
4) can declare himself to be a trustee for 3rd party

Question 15

What is the equitable principle in regards to ineffectual transfers?

Answer 15

• equity will not assist a volunteer
• if S attempts to use one method to confer a benefit on B and fails to do so effectively, equity will not save the gift.

Question 16

Why did the attempted trust fail in Milroy v Lord?

Answer 16

• S intended to create a settlement by transfer
• S failed to vest legal estate in T
• equity does not interpret the attempt as a declaration of trust
• S was not treated as a trustee instead

Question 17

What happens if an attempted gift fails? In what case did this happen?

Answer 17

• Jones v Lock
• father intended to give an absolute gift to his son but failed to endorse the cheque and property had not been transferred
• therefore had no intention of declaring himself a trustee for his son
• therefore no trust created.

Question 18

What general exceptions are there to the principle that equity will not assist a volunteer or perfect an imperfect gift?

Answer 18

1) where S has done everything in their power to effect the transfer, the transfer can be treated as effective
2) where legal title has vested in the donee/trustee in a different capacity
3) death bed gift (donatio mortis causa)
4) where proprietary estoppel operates

Question 19

What happened in Re Rose?

Answer 19

• court ruled a transfer was effective in equity once S had done everything in his power to vest shares in Ts.

Question 20

How was the decision in Re Rose modified by a later case?

Answer 20

• Pennington v Waine
• from Re Rose transfer only effective once it would be impossible for S to recall the gift
• made a transfer effective once it became unconscionable for S to recall the gift
• ‘unconscionable’ must be decided on a case by case basis.

Question 21

How can legal title vest in a donee in a different capacity?

Answer 21

• eg Strong v Bird: debt imperfectly released
• common law: legal title to S’s property passed to B as executor so could not hold a debt against it.
• equity: intention to forgive a debt evidenced by the debt holder making the debtor her executor

Question 22

How does the rule from Strong v Bird apply to gifts that will be given in the future?

Answer 22

• intention to make a gift in the future only an unenforceable promise
• Re Freeland
• must be an intention to give an immediate gift
• this did not exist because the car in question needed to be recovered from a third party.

Question 23

How does the rule from Strong v Bird apply where there are multiple personal representatives?

Answer 23

applies the same way: Re Stewart.

Question 24

How was the rule in Strong v Bird extended by a later case?

Answer 24

• Re Ralli’s Will Trust
• extended to treat a trust as properly constituted if trust property comes into the trustee’s hands in any legitimate capacity

Question 25

Explain a deathbed gift. What is its Latin name?

Answer 25

• donatio mortis causa
• governed by Cain v Moon and has following requirements for creation:
  1) gift was made in contemplation of death, which donor believes to be imminent
  2) gift is conditional on death (ie not intended to be fully effective before then can be revoked before death)
  3) there is delivery of the property in some way. Donor either hands it or something representing it to the donee.

Question 26

What happens if a deathbed gift is given imperfectly?

Answer 26

• if the conditions from Cain v Moon are met donee may insist the court perfects it.

Question 27

How do deathbed gifts work with chattels?

Answer 27

delivery is sufficient to perfect donee’s title on donor’s death

Question 28

Apart from chattels, what happens if delivery is not enough perfect a donee’s title in relation to a dmc?

Answer 28

• eg handing house deeds to someone does not transfer title to a house
• but does let the donee compel the deceased donor’s personal representative to do whatever is necessary to perfect the title

Question 29

Explain a case where a deceased donor’s personal representatives had to to perfect a dmc.

Answer 29

• Sen v Headley
• deceased S gave a woman the keys to the safe which held his house deeds and told her he was giving her his house
• valid gift so personal representatives had to perfect it

Question 30

How do equity and common law approach the issue of consideration in terms of trusts?

Answer 30

• both see money or money’s worth as consideration
• common law sees covenants/promises in deeds as binding without the need for a consideration but equity does not
• equity may see marriage as a consideration in relation to marriage settlements. Common law does not.