Introduction:
The creation of trusts is an obligation that is endowed on the trustee to take the responsibility to look after a trust in order to secure a property for the benefit of the beneficiary as named in the trust which can only exist if the creation of trust is valid in the eyes of law. However, trust is highly governed by equitable principles, which claims that “Equity shall not perfect an imperfect gift” as ascertained in the case of Milroy v. Lord 1862 as well as in Richards v Delbridge which have been strictly applied in cases of transfer of gift over a period of years. However, this strict application has seen to take a shape in the case of Pennigton v. Waine 2002. Another equitable maxim that was established was in a situation where a trust deed is still not constituted, no rights shall subsist until there is a suitable consideration for the same that runs on the line of “ Equity shall not assist a volunteer”. If you require assistance with your law dissertation, then you can consider seeking professional law dissertation help so that you can navigate through complex legal principles and case studies efficiently.
To begin analyzing the developments of the formalities required for an express trust, it’s imperative we look into the certainties that create an express trust in the first place as identified in the case of Knight v. Knight by Lord Langdale. Thus, to initiate a valid and enforceable trust, there must be an intention to begin with. The intention of the creator of the trust is crucially examined in cases where the words constructed are ambiguous or latent, the court urges for a trust to have genuine intention to formulate such a trust to consider it a conclusive trust and not merely developed out of moral obligation. This intention forms a binding arrangement which can also be understood through the conduct of the parties as was held in the case of Paul v. Constance Along with the presence of intention, the subject that is to be created under trust must be clear to avoid any complexities that may arise in the future. The divisions created in the trust to ascertain the parts that are entitled to the beneficiary must be constructed with clarity otherwise, in case of such ambiguity in the language, the court may not divest such interests in
The journey from Milroy v. Lord to Pennington v. Waine
The constitution of a valid gift is an onerous task in the eyes of equity which can be considered as an enforceable gift if all the requirements are satisfied. The transfer of a legal title by the donor must constitute on a title that is of an equitable interest assigned satisfactorily to the donee, the legal interest on the title is transferred in the form of a trust and the donor must also establish that he is the owner of the property transferred as gift in the form of a trust. The property transferred shall only be vested if an express declaration is made and in case, such express declaration fails to subsist and the formal requirements to create a trust fail to be complied with, either by the donor or trustee, such a gift shall render unenforceable and declared imperfect. In the case of Milroy v. Lord, the shares that were assigned to Lord were not registered in the books maintained. Therefore, formal standards to procure the transfer and assignment was inadequateThis approach was strongly applied until the decision in Re Rose was developed where a wholesome balance was created to achieve a fair reach on such transfers where it was upheld that in cases where the donor had genuine intentions and had worked in his full capacity to conduct the transfer of legal title, such a formation of trust will be considered. This deviation from the accepted general rule did not create any impediments and was widely accepted from thereon. The ineffective legal title was converted to the formation of a constructive trust and beneficial interest was seen to be invested in the share despite the title but such stance was refused in perfecting an imperfect legal title in the case of Re Fry since, the donor had not committed to act in his full capacity at his deathbed where the consent of the treasury appointed was considered to be a necessary implication was not obtained at the right time. The rule established in Re Rose was further relaxed and came a long way from the case of Milroy Lord in the case of .Choithram International SA v Pagarani and Pennington v. Waine. Equity does not provide leeway to any volunteer but it will not intentionally defeat the whole purpose of a gift and this was developed by Lord Browne Wilkinson in the case of Choithram. The conscience of the donor was given importance and the idea of barring the door from creating or transferring the gift would be unconscionable. No distinction was created in the position of the donor, either a s a sole trustee of a property or appointed trustee of the donee. Milroy v. Lord had allowed the three main certainties that help in formulating a trust, the case of Choithram had allowed a fourth clause where conscience played a bigger role since unconscionability allows
Continue your journey with our comprehensive guide to Balancing Interests in Mortgage Contracts.
BIBLIOGRAPHY
Cases
Milroy v Lord [1862] EWHC J78
Richards v Delbridge [1874] LR 18 Eq 1
Pennington v Waine [2002] EWCA Civ 227
Knight v Knight 49 ER 58
Paul v Constance [1976] EWCA Civ 2 / [1977] 1 W.L.R. 527
Sprange v Barnard
Re London Wine Co Ltd [1986] PCC 121
Hunter v Moss [1994] 1 WLR 452
McPhail v Doulton [1970] UKHL 1
Richards v Delbridge [1874] LR 18 Eq 11
Choithram International SA v Pagarani[2001] All ER 492 [2001] 1 WLR 1
Journals
Ian Hunter, Equity and Trust: The Constitution of a trust, Case Comment, Coventry Law Journal 2002
A J Oakley,Parker and Mellows: The Modern Law of Trusts(9th edn, Sweet & Maxwell 2008) 146.
Morris, ´ Questions: when is an invalid gift a valid gift? When is an incompletely constituted trust a completely constituted trust? Answer: after the decisions in Choithram and Pennington´ (2003) 6 PCB 393, 400.
Ian Hunter, Equity and Trust: The Constitution of a trust, Case Comment, Coventry Law Journal 2002
Lucie Novotna Kruotsova,2012 “ Equity will not perfect an imperfect gift: A review and evaluation”, < https://www.grin.com/document/358293 > accessed on 22nd February, 2021
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