Constitution= refers to the giving or transfer of legal title from one person to
another
1. Trust property must be vested in trustee
Either:
Settlor has vested the legal title to the trust property in the
trustees
Of property already in his hand, the court must be satisfied that the
subject matter of the trust is clearly identified and segregated from
their other assets. A present binding declaration of trust has been
made complying with the requisite formalities.
OR
(b) Settlor wishes another to be trustee.
Three examples:
1. Land- s52(1) must be made by deed, s1 of LMPA tells us of the
requirements of a deed
2. Chattels- by deed or by an intention to make a gift AND delivery (Re
Corp)
If the subject matter of the trust is legal title to land, then conveyance
to trustees must take form of a deed.
If registered land then the transfer must be entered into Land Register
LA 20002 ss29 annd 30
Bennet to Richards, from this time forth, with all the stock-in-trade. He
then gave the document to the boys mother to hold for him. On his
death there was no mention of property.
(c) Exceptions to the rule that Equity will not assist a volunteer
1. Proprietary estoppel(dont need to know)
2. Rule in Re Rose
Facts: father wanted to transfer legal title to son, father filled in all
relevant documents and gave them to the son, the son hadnt logged
the documents with the land registry. They fall out and father says give
them back, son says no lets go to court.
Father used correct method, did everything in his power BUT the
documents didnt end up in the right place.
CoA: the rule in Re Rose still applies because the father was now
unable to revoke the documents- the son had them and he
couldnt do anything to interfere
Issue: Harold (the nephew) took on the role of director at her death,
but had the shares been transferred to him?
CoA: yes the shares had been transferred. But reasoning differs in the
two main judgements:
Arden LJ: upheld Re Rose, and held that the fact that there was
clear evidence that Mrs C intended an immediate gift of the
shares amounted to an assignment of them to the nephew
anyway. On the facts it would be unconscionable in view of all
that she had done to transfer the shares to then turn around and
change her mind and say that they were not his.
Either the settlor must have put it out of his power to stop
the transfer proceeding, or else circumstances akin to
proprietary estoppel must make it unconscionable for him
to insist on ownership of the relevant property
Pennington should be confined to its facts i.e. cases that are similar
Privy council: the trust was properly constituted and decision rests on
two points:
1. Pagarani had made a declaration of trust- didnt use the word
trust and his actual words seemed to indicate a gift but the
context of the words clearly indicated a trust- he intended to give
to the foundation
2. It didnt matter that the trust property wasnt vested in the other
trustees as Pagarani had executed a solemn declaration of trust
and it would be unconscionable to allow him to go back on his
promise.
Rules:
Rule: if an incomplete gift is made during the donors lifetime and the
donor appointed the donee his executor, then the vesting of property
in the donee completes the gift
Farwell LJ: housekeeper by the fact that she was appointed as one of
the administrators had the right to the property when the donor died
intestacy, as equity didnt need to step in and perfect her title.
Re Gonin [1979] Ch 16
After all it is the voluntary act of the testator in appointing his debtor
as his executor that extinguishes the debt at law, so that the fortuitous
appointment by the court of an administrator who was a debtor of the
intestate didnt extinguish the debt. And so Strong v Bird wouldve
been differently decided if the D had been an administrator and not an
executor.
Whether or not the rule in Strong v Bird can be extended to the constitution
of trusts:
Re Brookss ST [1939] 1 Ch 993
Facts: mother creates trust makes Lloyds Bank trustee for her son.
Trust is such that from time to time, mom can add property to the
trust. The son sets up a separate trust naming the same bank as
trustee for his own family (wife and kids), and feeling very generous he
makes an enforceable promise to voluntarily transfer any property that
he receive from mom in his own trust, to the trust he created for his
family, automatically.
Issue: Mom did give lots of property, question arose, since the
trustees were the same could we say that the moment mom gave
property to Lloyds, the property was automatically constituted to the
other trust?
Justice Farwell: no you cant because the only person that can
constitute a trust is settlor himself, so until and unless the son puts it
on trust the property was the sons absolutely.
What if A dies?
Bad Case
Barclays J: obiter-if he were asked the question we could say the rule
in Bird applied but Re Brooks wasnt cited by him
The circumstances must have been such as to establish that the gift
was to be absolute and complete only on the donors death so as to be
revocable before then. A condition to this effect need not be expressed
and will normally be implied from the fact that the gift was made when
the donor was ill.
Kane v Moon
11