Equity and Trust Law Lecture 6 PDF

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Equity and Trust Law Lecture 6...

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Equity and the Law of Trusts Lecture Six – Formalities I Overview Formalities and inter vivos trusts; Transfers of land; Declaration of trust; Disposition of equitable interest. Establishing a Trust Three certainties - Knight v Knight (1840); Constitution of trusts; Formalities. Formalities and Inter-Vivos Trusts Maxim – equity looks to substance rather than form; Paul v Constance; Generally: creation of a trust does not require compliance with formalities; Most transfers do not require formalities. Exceptions Why Formalities? Certainty; Fraud; Knowledge of interests. Inter-vivos ‘Between the living’ When do we Need Formalities? Contracts – need not be formal; Exception: Contracts for the sale of land; Contracts for Land Law of Property (Miscellaneous Provisions) Act 1989; Section 2(1); ‘A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.’ Contracts for Property No contract needed for transfer of choses in possession; Chose in action; E.g. debt – inform debtor of the transfer; S.136 Law of Property Act 1925 Transfers of Land Law of Property Act 1925, s.52(1); ‘All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed.’ Deed Requirements Law of Property (Miscellaneous Provisions) Act 1989; Section 1(2); Register transfer under s.4 Land Registration Act 2002 Disposition Trusts of Land

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LPA 1925, s.53(1); ‘a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will’ LPA 1925, s.53(2) ‘This section does not affect the creation or operation of resulting, implied or constructive trusts’ Rochefoucauld v Boustead [1897] Comtesse de la Rochefoucauld; Coffee plantations in Ceylon; These were subject to a mortgage. Rochefoucauld v Boustead [1897] Boustead – bit of a rogue; Agreed to hold property on trust; Mortgaged the property; Declared bankrupt. Rochefoucauld v Boustead [1897] Trust had been declared orally; Statute of Frauds; Was transfer valid? If it was not then Boustead would profit from fraud; Can the lack of formality be used to conceal or cloak fraud? HELD? Bannister v Bannister [1948] Mrs Bannister; Mr Bannister (brother in law); Constructive trust. Hodgson v Marks [1971] Mrs Hodgson Lodger Nephew Mr Marks Case Law Tension Is it an express trust (Rochefoucauld)? Is it a constructive trust (Bannister)? Is it a resulting trust (Hodgson)? Disposition of Equitable Interest LPA 1925, s.53(1)(c) • ‘a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.’ Sub-Trusts Assignment of beneficial interest to another; Jenny has beneficial interest of £1m; Jenny can assign that to Polly. Grey v IRC [1960] Grey held legal title of 18,000 shares; Mr Hunter;

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Transfer beneficial interest to grandchildren; Did the transfer comply with s.53(1)(c)?...