Defective Transfers Flashcards Preview

Equity & Trusts > Defective Transfers > Flashcards

Flashcards in Defective Transfers Deck (27):
1

Steps to follow (Workshop)

1. What is person trying to do?
2. What is the property concerned?
3. What are the rules?
4. Have the rules been followed?
5. If not, do any exceptions apply

2

Steps to follow (YourGDL)

1. Identify type of disposition and the necessary declaration
2. Formalities required (where there has been a transfer)
3. If transfer is defective, consider whether equity will perfect any imperfection

3

Types of disposition

Gift
Trust with self as trustee
Trust with someone else/others are trustee(s)

4

Declaration required for a gift

The three certainties:
- Certainty of intention
- Certainty of subject
- Certainty of object

5

Re Beaney
(Certainty of intention)

'Donor must have necessary mental capacity. Level required rises with value/size of gift.'

6

Certainty of subject

Must be a tangible benefit that can be enforced

7

Palmer v Simmonds

'Bulk of' is unclear, when it comes to certainty of subject

8

Re Golay

Subject matter of trust is certain if settlor provides a workable formula.
Eg. 'reasonable income', 'the profit from my capital'

9

Re London Wine Company (Shippers) Ltd

Must segregate tangible items of trust property from like items.

10

Hunter v Moss

Need not segregate intangible items if items are indistinguishable (eg. identical shares)

11

Certainty of Object

Those who will/may benefit must be certain

12

Declaration needed for trusts

- Three certainties (as usual, but there must be a binding obligation on trustee for intention)
- Beneficiary principle
- Rules against perpetuity
- Formalities for declaration (Land evidenced in writing)

13

Paul v Constance

Intention is ascertained by words or conduct

14

Re Adams and Kensington Cestry

Merely precatory worlds will not suffice (my best friends)

15

Beneficiary principle

There must be identifiable human beneficiaries who can enforce the trust

16

Rules against perpetuity

For discretionary trusts - rule against remoteness of vesting (max 125 yers)
For non-charitable purpose trusts - rule against alienability (limited to 21 years, or allow trustees to spend all trust capital on the purpose)

17

Formalities for declaration

Land: Evidenced by writing, signed by the transferor (s.53(1)(b))
Other types of property: none needed (writing is desirable though)

18

Formalities for the transfer of chattel

Simple physical delivery (Re Cole) or deed
If physical delivery is impossible, the item may still be considered transferred (Jaffa v Taylor Gallery Ltd)

19

Formalities for the transfer of shares
(Depends on what type of system - check Manual notes)

1. Complete and sign stock transfer form
2. Send STF and share certificate to transferee
3. Transferee must send documents to company to register new owner.

20

Formalities for the transfer of land

- Must be done by deed . Send deed to Land Registry and notify as new legal owner (s. 52(1) LPA 1925)
- Deed must say it's a deed, be in writing and be signed, witnessed and delivered as a deed (s.1 LP(MP)A 1989)

21

Formalities for equitable interests

See s.53(1)(c) LPA 1925

Must be in writing (Grey v IRC)
Signed by person disposing of the interest/an authorised agent or in will

Exceptions:
Resulting trusts; constructive trusts; proprietary estoppels

22

Remedies for imperfect transfers

Milroy v Lord
There is no equity in this court to protect an imperfect gift; equity will not benefit a volunteer;
equity will not construe a trust from an invalid gift

23

Strong v Bird

On death of donor, donee can claim legal title if:
a. transfer fails due to not satisfying formalities;
b. intention to make immediate gift by donor (Re Freeland)
c. intention continues until death (Re Gonin); and
d. donee becomes executor/PR/administrator of donor

24

Every effort test (Re Rose)

Gift complete in equity if donor has done everything he can.

Eg. once STF and share certificate handed over, the gift is complete in equity

25

Unconscionable (Pennington v Waine)

Applies to very specific situations only
Extends Re Rose to gifts even when incomplete
Must be unconscionable to invalidate disposition

26

Choithram International SA v Pagarani

If the transfer is defective, equity will not strive officiously to defeat a gift. Rather, may interpret gift as a trust if the settlor is a trustee.
Court of equity requires less from the transferor than demanded in Re Rose as it is enough that the transferor's conscience is affected. Important that the settlor becomes a trustee

27

Exception for transfer of equitable interest

If interest is under a bare trust, and the beneficiary directs the trustee to transfer the equitable estate with the intention of transferring the legal estate as well, s.53(1)(c) LPA will not apply, and an oral instruction will be sufficient (Vandervell v IRC)
This rule only applies if the legal estate is being transferred (Zeital v Kaye)