validity of gifts

what is a gift

voluntary transfer of property with no consideration

types of property

personal - tangible / intangible

real / land

formalities for transfer of land

• requirement of a deed (s.52(1) LPA)

• registration (s.27 LRA)

formalities in the transfer of chattels (formal method)

• requirement of a deed (s.52(1) LPA)

• registration (s.27 LRA)

formalities in the transfer of chattels (informal method)

• intention

• valid form of delivery

glastier-carsile v glastier-carsile

relevant intention is of the donor

3 valid forms of delivery

actual

constructive

symbolic

actual delivery

physical handing over of the item

Re Cole

words alone are insufficient

constructive delivery

puts the donee in a position to take the item themselves

thomas v times book company

T was put in a position to take the script therefore consituting constuctive deliery

symbolic delivery

transfer by something representing the item

Lock v Heath

handing over chair and inventory of furniture represented all the furniture wanted to be gifted

if the formalities are not completed what happens?

equitable interest only

transfer of shares

1. stock transfer form must be signed by the transferor and delivered- sch 1 stock transfer act

2. regitration - companies act

milroy and lord rule

equity will not perfect an imperfect gift

re rose

if the donor has done everything in their power to transfer the property, equity treats the transfer as complete even if legal title has not yet passed

pennington v waine

an imperfect gift may be perfected if it would be inconscionable for the donor to revoke it

curtis v pulbrook

identified exceptions to equity will not perfect an imperfect gift

1. re rose

2. unconscionability

3. benevolent contruction of words justifes the find of an effective gift or implied self declaration of trust

strong v bird

where the donor expresses an intention to make an immediate gift and that intention is maintained until the donors death, and then the intended donee is appointed as executor of the will, the gift is fortuiosuly completed

two step process for valid trusts

1. has the trust been validly created? (certainty, capacity, formalities)

2. is the trust enforceable - has it been consituted?

capacity

person creating the trust must be legally capable of doing so, and must have full title to the property which is being put into the trust

case establishing the three certainties

knight v knight

three certainties

intention

subject matter

object

certainty of intention

must be clear the the person disposing of the property intended to make a trust and not a gift - must be clear the settlor wanted to split legal and beneficial title

formalities in showing intention (language)

no need to use word trust but language should impose a clear obligation of the trustee - re adams and the kensington vestry

certainty of subject matter

must be clear exactly what property will form the subject matter of the trust

certainty of subject matter - chattels

trust property must be identifiable - if part of a larger holding of similar property, it should be segregated from the rest

certainty of subject matter - intangible property

trust property is certain even if identified by words

sprange v barnard

wife left money to husband - “what he doesn’t want for his own want” would be held on trust for nieces - no certainty of subject matter - don’t know what he would want for himself

certainty of objects

must be certain who the beneficiaries are

key case for certainty of objects

IRC v Broadway Cottages

complete list test

trustee must be able to draw up a complete list of all beneifcaries before distributing the trust property

how do the requirements for certainty of subject matter differ betweent tangible and intangible property

tangible = must be physically segregated or uniquely identified from a bulk

intangible = can be identified by words / percentages of a total holding

what happens if a trust is not constituted

consitution = act of getting legal title to the assets into the hands of the trustee - if it is not constitued the trust will fail

general rule for formalities in the creation of trusts

minimal formalities - just a clear intention required, can be made orally

Paul v Constance

trusts can be made orally

exceptions to general rule - LPA what section?

s.53

• a subsistying beneficial interest

• land