E&T Tutorial W8 (Jones v Lock) PDF

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Equity & Trust Tutorial Week 8INTRODUCTION A very good evening we bid to Madam Siva and fellow classmates. Today, we from group 4, Nur Syaza, Nur Dayana Batrisya and Aliyah Azizi will be presentating on question four under the topic of constitution of trust.The question read, “Discuss the facts ...

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Equity & Trust Tutorial Week 8 INTRODUCTION A very good evening we bid to Madam Siva and fellow classmates. Today, we from group 4, Nur Syaza, Nur Dayana Batrisya and Aliyah Azizi will be presentating on question four under the topic of constitution of trust. The question read, “Discuss the facts and decision in Jones v Lock pertaining to constitution of trust. Do you agree with the decision? Why?” FACTS & JUDGEMENT In Jones v Lock (1865) 1 Ch App 25, the father, Mr Jones, had a son with his first wife and an infant son with his second wife. He handed a cheque of 900 pounds to the infant with a statement which clearly shows that he wished it to be the property of the child. However, he died 6 days later without making the necessary directions by amending the will to allow the child to cash the cheque. The child and wife of the first marriage claimed for the properties under Mr Jones to be given to them. Consequently, the infant’s mother argued that the 900 pound of the estate belonged to the her child. The issue arose when it was found that the check had not been signed thus it was to be discussed whether there was an express trust for the 900 pound in favour of the infant son? It was held that there was no express trust. However, the court found that there was an intention that the 900 pound is to be given as a gift to the infant, hence it does not constitute as a trust. Thus, the maxim “equity will not perfect an imperfect gift”. OPINION In our opinion, we would like to agree to the decision of the court. To support our stand, the precatory words themselves were ineffective to create a trust. The settlor must have the intention to actually create a genuine trust and not merely a gift by way of formalities in filling a transfer form and the necessary documents. It can be shown from the action of the parties where that there was no clear indication of the intention to creat a trust. Thus, a mere expression of desire to confer a benefit is insufficient. In the case of Jones v Lock, Mr Jones was in a fit of rage when placing the cheque on the hand of his baby which he said in front of his wife “ I give this to the baby and I am going to put it away from him”. Additionally, before he was able to amend the will he died without making the necessary direction for the check to be cashed out by the baby. The mere precatory expression said by Mr Jones does not constitute him having intention to create trust.

To support this statement, it is illustrated in the case of Lambe v Eames. In this case, the testator gave his estate to his widow which he stated ‘‘to be at her disposal in any way she may think best for the benefit of herself and her family’. The words stated does not indicate he want to create trust and the words are clearly precatory thus it constitutes as gift. Aside for that, it the court decides that the transfer of property between Mr Jones and the infant was a trust relationship, the infant would not be able to enjoy the full benefit of the property left to him. POINTS FOR SLIDES  Types of Trust & Its Formalities i. Inter Vivos (Living Trust) -Exist during the lifetime of the settlor -Settlor must sign the trust instruments (Necessary Documents) -If it is not completed, legal title of trust property will not transfer to trustee. ii. Testamentory Trust (Will) -Trust is created through will -Takes effect on the death of the settlor (testator/testatrix) -Section 5 of The Will Act: The Will has to be signed and acknowledged by 2 witnesses  3 Ways to Effectuate a Binding Trust (per Lord Justice Turner in Milroy v Lord) i. Settlor straight away transfer the property to beneficiary as gift ii. Appoint a Trustee iii. Declare himself as trustee -The settlor declare himself as a trustee thus he could directly transfer the benefits to the intended beneficiary  Certainty of Intention -Maxim “Equity look to substance rather than form” applied when the settlor’s intention is ambiguous -Distinguish whether the settlor wants to create a trust (legal obligation) or mere gift (moral obligation) -Court will look at the construction of words used to ascertain if a trust was intended as mere expression to confer benefit is insufficient -Precatory words would render that settlor intend to give his property as a mere gift -Words used must be clear, unequivocal and sufficiently expressive -Court will look at the conduct and the surrounding circumstances...