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Summary Equity & Trusts: Trusts and Formalities
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This document contains a condensed overview of trusts and the formalities required for a valid trust.
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EQUITY & TRUST: Lecture NotesConstitution of Trusts and Formalities
• Gratuitous transfer — transfer for free
• Concept of the volunteer
Volunteer Transfers
• “Some right, interest, profit or benefit accruing to the one party, or some forbearance,
detriment, loss or responsibility, given, suffered, or undertaken by the other”
• Currie v Misa
• “Money or money’s worth or marriage consideration”
• Pullan v Koe
• Midland Bank Trust Co Ltd v Green (No.1)
Milroy v Lord (1862)
• Gift: “actually transferring the property to the persons for whom he intends to provide”
• Transfer to trustees: “transfers the property to a trustee for the purposes of the
settlement”
• Self-declaration of trust: “declares that he himself holds it in trust”
• Outright gift is not a trust
Formalities
• The transferor must do “everything which, according to the nature of the property
comprised in the settlement, was necessary to be done in order to transfer the
property and render the settlement binding”, per Turner LJ in Milroy.
• Chattels, IP, Land, Shares, Cheques, Subsisting equitable interest
Chattels
• “A gift of chattels is not complete unless accompanied by something which constitutes
an act of delivery or a change of possession”,
• “In the absence of consideration, delivery is still necessary except in the cases of a gift by
will or by deed, which latter itself imports both consideration and delivery”.
per Harman LJ in Re Cole [1964]
• Not enough to be in proximity of the chattels
• Jaffa v Taylor Gallery (1990)
Land
• Law of Property Act 1925
• s. 52
, EQUITY & TRUST: Lecture Notes
• Transfer of legal title
• s.1(6)
• If you are a minor you cannot own the legal estate
• Held on trust for you
• Minor can be a beneficiary
• s.53(1)(b)
• If you want to create a trust of land it must be signed in writing and signed by the
legal owner
• Transfer of equitable interest
• Complete a TRI form
• Don’t become the owner until the register changes
• Electronic signatures?
• Electronic Communications Act 2008, s.8
• J Pereira Fernandes SA v Mehta [2006]
• Law Commission Report, Electronic Execution of Documents (Aug 2018)
Shares
• Milroy v Lord = transfer of shares
• Formalities laid down in statute
• Companies Act 2006, ss. 700-72
• Stock Transfer Act 1963, s.1
• Crest System = electronic
• Shares company rules: Company articles and directors’ discretion: Re Rose [1949]
** [there is another case in 1952 DON’T GET THEM MUDDLED]
• Company director refused to change the legal title of the share
• Like chattels but cannot hold it
• Share is a conceptual part of a company — share certificate evidences it but isn't the
share itself
• Share transfer form — new legal owner name on it, must be signed — not enough to just
execute it — must be delivered to the company — do not become the legal owner of the
share until the company has changed the owner of the share
IP & Cheques
• Endorsement:
• Jones v Lock (1865)
• Cheque is an order to the bank
• s.90(1) Copyright, Designs and Patents Act 1988
• s.30(6) Patents Act 1977
• S.24(3) Trade Marks Act 1994
Subsisting Equitable Interests
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