Trusts - Formalities and Constitution

Question 0

Vandervell

Answer 0

The transfer of a legal interest carries with it the equitable interest. Therefore there is no need to satisfy s53(1)(c) (which was designed to prevent fraud)

Question 1

Grey v IRC

Answer 1

Equitable interests passing to beneficiaries via trustees need to comply with s53(1)(c) to be valid.

Question 2

Milroy v Lord

Answer 2

Outright gifts must have legal title transferred.
Showing a trust was intended is not enough. It will fail if not completed or constituted correctly. Equity will not assist a volunteer.

MUST BE THE TRUST THE SETTLOR INTENDED TO CREATE! (not just have the same effect)

Question 3

Re Rose

Answer 3

An exception to save gift where not fully constituted.

Where settlor has done everything required of him but legal title has not passed due to being reliant of the acts of an independent third party for completion.

Reduces harshness of Milroy v Lord.

Question 4

Jaffa v Taylor Gallery

Answer 4

Physical delivery of personalty will not be insisted upon if inappropriate.

Question 5

Pennington v Waine

Answer 5

Exception to M v L that says Milroy v Lord will only apply where gift is purely voluntary.

Where there has been a change of financial position it would be unconscionable to remove gift - gift constituted at that point.

Re Rose more likely to be followed though.

Question 6

Jones v Lock

Answer 6

Where settlor declares self as trustee…

Intention must be clear and formalities complied with - otherwise regardless of what intended only a declaration of intent exists.

(baby - cheque - not valid)

Question 7

Strong v Bird

Answer 7

Exception to maxim equity will not assist a volunteer

1) must prove intention to make an immediate inter vivos gift
2) continuing intention up to death (no contrary acts)
3) the receipient of the gift ends up with the legal title (eg must be executors)
4) subject matter of gift must be capable of enduring settlor’s death (not a cheque)

Question 8

Re Gonin

Answer 8

Proved Strong v Bird will only assist if element missing is transfer of legal title. It will not assist if formal requirements have not been met.

Question 9

Dealing with questions

Answer 9

1) Identify type of transaction intended by settlor (outright gift, self as trustee, appointing trustees)
2) Identify type of property involved
3) Explain formal requirements involved
4) Have they been met precisely?
5) Consider what is necessary to transfer the legal title to the trustees (Ellison v Ellison then state if volunteers then Milroy v Lord)
6) Have steps been completed successfully?
7) If incomplete, will any exceptions assist? (Re Rose, Strong v Bird, Pennington v Waine)
8) Conclude

Beware of any ambiguous phrasing - explain options…
Explain letters are writing but assuming signed, can be to anyone as long as trustees named.

Question 10

Ellison v Ellison

Answer 10

Equity will not assist a volunteer

Volunteer - someone who has not given consideration for a promise