Vandervell v Inland Revenue Commissioners Case Brief PDF

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Case Brief...

Description

CASE BRIEF TEMPLATE Name of Case

Vandervell v Inland Revenue Commissioners

Citation and Court

[1967] 2 AC 291 House of Lords

Material Facts

The National Provincial Bank was a bare trustee of shares for Vandervell. Vandervell orally directed the bank to transfer the shares to the Royal College of Surgeons.  His intention was that the college acquire both the legal and equitable interest in the shares.  Pursuant to relevant income tax legislation, the IRC assessed Vandervell as bineg liable for a surtax on the dividents earned by the shares.  A provision of the income tax legislation stipulated that if Vandervell had ‘divested himself absolutely’ of his interest in the shares, the surtax was not payable.  Vandervell argued that his oral direction to the Bank meant that he had so divested himself of his shares.  The IRC also argued that Vandervell had not disposed of his equitable interest in the shares in accordance with the requirements of s 53C(1)© of the Law of Property Act 1925 (UK), which stipulated that ‘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 authorized in writing or by will’ The Issue before the House of Lords were whether Vandervell’s oral direction fell within the provision in the income tax legislation that meant that no surtax was payable, and whether the oral declaration was a disposition wthin the scope of s 53C(1)© Law of Property Act 1925 (UK) s53C(1)©

Legal Issue

Relevant Law Application of Law to the Facts

Conclusion

 

Where beneficiary wishes to transfer equitable AND legal estate – all that is required is to divest the legal estate (the greater includes the less) – so, no room for operation of Sc 53(C)(1)(c) – which deals only with dispositions of equitable interests. Vandervell: oral direction effective where direction to transfer property to third party b/c it dealt with Eq and legal interest, thus legal interest only – not Eq (as in Grey). – Achieved the same result as if there had been no separation of legal and Eq interest, so s23(C)(1)(C) of no relevance. Unanimously held that Vandervell’s direction was not a disposition caught by s 53C(1)©. Oral direction therefore effective and did not have to be in writing....