Lecture 2: Equity will not perfect an imperfect gift or will it?
Reading Set: Formalities and perfecting an imperfect gift. Hudson pages 211 to 250; in
particular, pages 223 to 238, parts 5.4, Imperfect gifts 5.5 Perfecting imperfect gifts.
Further reading: M.Halliwell, “Perfecting Imperfect Gifts and Trusts: Have We Reached the
End of The Chancellor’s Foot”, [2003] 67 Conv. 192 ( note there is not a tutorial on this
topic).
The express trust and formalities:
An express trust is where the legal owner of the property declare that they hold the
property on trust for specified beneficiaries.
The declaration will also set out the proportion or ways in which they are to hold beneficial
interest. Where there is an express declaration, this will override the principles of resulting
or constructive trusts unless the declaration was obtained by fraud or mistake.
Trusts created inter vivos
Trusts of pure personalty require no further formalities.
Trusts of land – this type of trust is defined by s.1 of Trusts of Land and Appointment
of Trustees Act 1996 as “trust which consists of and includes land”.
o s53 (1)(b) LPA 1925: “a declaration of trust respecting any land or any interest
therein must be manifested and proved by some writing signed by some
person who is able to declare such trust or by his will”. But note:
(1) the sanction for non-compliance: the trust is unenforceable
but not void.
(2) the section applies to express trusts only – s.53(1)b
(3) equity will not permit a statute to be used as an instrument of
fraud
Rochefoucald v. Boustead [1897] 1 Ch. 196)
Trusts and other dispositions of existing equitable interests
o s53 (1)(c): “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 there into lawfully authorised in writing or by will”.
o s53 (2): the section does not “affect the creation or operation of resulting,
implied or constructive trusts”.
o .
GIFTS and their formalities.
Milroy v. Lord (1862) 4 De G F & E 264 per Lord Turner LJ – “… in order to render a
voluntary settlement valid and effectual, the settlor must have done 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 upon him. He
may, of course, do this by actually transferring the property to the persons for who he
intends to provide, and the provision will then be effectual and it will be equally effectual
if he transfers the property to a trustee for the purposes of the settlement, or declared
that he himself holds it in trust for those purposes … but in order to render the
settlement binding, one or other of these modes must, as I understand the law of this
court, to be resorted to, for there is no equity in this court to perfect and imperfect gift”.
Where a gift is imperfectly constituted cannot be a declaration of trust. [42] “Nevertheless,
a settlor’s intention to deal with the property so as to deprive himself of beneficial
ownership must be clearly evinced…” Deslauriers and another v Guardian Asset
Management Limited [2017] UKPC 34.
Exact application:
o Re Fry [1946] Ch 312
o Jones v. Lock (1865) LR 1 Ch App. 25
o Richards v. Delbridge (1874) L.R. 18 Eq 11
o Paul v. Constance [1977] 1 W.L.R. 54
Relaxation of the rule?
o Re Rose [1949] Ch. 78
o Re Rose [1952] Ch .499 See also, Mascall v Mascall (1985) 49 P&CR 119.
o Re Fry [1946] Ch. 312
New direction ?
o T Choithram International SA v. Pagarani [2001] W.L.R 1 – ”although Equity
will not assist a volunteer, it will not strive officiously to defeat a gift” – per
Lord Browne – Wilkinson. Re Bogusz (dec’d) [2014] Ch 271.
o Pennington v. Waine [2002] W.T.L.R. 387 – “equity has tempered the wind (of
the principle that equity will not assist a volunteer) to the shorn lamb (the
donee) by utilising the constructive trust” – per Arden LJ. See now Kaye and
others v Zeital [2010] 2 BCLC 1. Curtis v Pulbrook [2011] 1 B.C.L.C. 638.
Exceptions to the rule that equity will not assist a volunteer
Rule in Strong v. Bird (1874) L.R. 18 Eq 315
Re Ralli’s Will Trusts [1964] Ch. 288
Proprietary estoppel: Gillett v Holt [2001] Ch 210. (see term 2)
Donatio mortis causa
o Sen v. Headley [1990] 2 W.L.R. 620 King v Dubrey [2016] Ch 221.
Note similar rules for express trusts the trust must be declared or trust property transferred
to the trustee. If done equity will assist a volunteer but if not then unless the beneficiary
gives consideration, then equity will not assist and the trustee is not allowed to take action,
Re Kay [1939] Ch 329 Re Fry [1946] Ch 312.
Reading Set: Formalities and perfecting an imperfect gift. Hudson pages 211 to 250; in
particular, pages 223 to 238, parts 5.4, Imperfect gifts 5.5 Perfecting imperfect gifts.
Further reading: M.Halliwell, “Perfecting Imperfect Gifts and Trusts: Have We Reached the
End of The Chancellor’s Foot”, [2003] 67 Conv. 192 ( note there is not a tutorial on this
topic).
The express trust and formalities:
An express trust is where the legal owner of the property declare that they hold the
property on trust for specified beneficiaries.
The declaration will also set out the proportion or ways in which they are to hold beneficial
interest. Where there is an express declaration, this will override the principles of resulting
or constructive trusts unless the declaration was obtained by fraud or mistake.
Trusts created inter vivos
Trusts of pure personalty require no further formalities.
Trusts of land – this type of trust is defined by s.1 of Trusts of Land and Appointment
of Trustees Act 1996 as “trust which consists of and includes land”.
o s53 (1)(b) LPA 1925: “a declaration of trust respecting any land or any interest
therein must be manifested and proved by some writing signed by some
person who is able to declare such trust or by his will”. But note:
(1) the sanction for non-compliance: the trust is unenforceable
but not void.
(2) the section applies to express trusts only – s.53(1)b
(3) equity will not permit a statute to be used as an instrument of
fraud
Rochefoucald v. Boustead [1897] 1 Ch. 196)
Trusts and other dispositions of existing equitable interests
o s53 (1)(c): “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 there into lawfully authorised in writing or by will”.
o s53 (2): the section does not “affect the creation or operation of resulting,
implied or constructive trusts”.
o .
GIFTS and their formalities.
Milroy v. Lord (1862) 4 De G F & E 264 per Lord Turner LJ – “… in order to render a
voluntary settlement valid and effectual, the settlor must have done 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 upon him. He
may, of course, do this by actually transferring the property to the persons for who he
intends to provide, and the provision will then be effectual and it will be equally effectual
if he transfers the property to a trustee for the purposes of the settlement, or declared
that he himself holds it in trust for those purposes … but in order to render the
settlement binding, one or other of these modes must, as I understand the law of this
court, to be resorted to, for there is no equity in this court to perfect and imperfect gift”.
Where a gift is imperfectly constituted cannot be a declaration of trust. [42] “Nevertheless,
a settlor’s intention to deal with the property so as to deprive himself of beneficial
ownership must be clearly evinced…” Deslauriers and another v Guardian Asset
Management Limited [2017] UKPC 34.
Exact application:
o Re Fry [1946] Ch 312
o Jones v. Lock (1865) LR 1 Ch App. 25
o Richards v. Delbridge (1874) L.R. 18 Eq 11
o Paul v. Constance [1977] 1 W.L.R. 54
Relaxation of the rule?
o Re Rose [1949] Ch. 78
o Re Rose [1952] Ch .499 See also, Mascall v Mascall (1985) 49 P&CR 119.
o Re Fry [1946] Ch. 312
New direction ?
o T Choithram International SA v. Pagarani [2001] W.L.R 1 – ”although Equity
will not assist a volunteer, it will not strive officiously to defeat a gift” – per
Lord Browne – Wilkinson. Re Bogusz (dec’d) [2014] Ch 271.
o Pennington v. Waine [2002] W.T.L.R. 387 – “equity has tempered the wind (of
the principle that equity will not assist a volunteer) to the shorn lamb (the
donee) by utilising the constructive trust” – per Arden LJ. See now Kaye and
others v Zeital [2010] 2 BCLC 1. Curtis v Pulbrook [2011] 1 B.C.L.C. 638.
Exceptions to the rule that equity will not assist a volunteer
Rule in Strong v. Bird (1874) L.R. 18 Eq 315
Re Ralli’s Will Trusts [1964] Ch. 288
Proprietary estoppel: Gillett v Holt [2001] Ch 210. (see term 2)
Donatio mortis causa
o Sen v. Headley [1990] 2 W.L.R. 620 King v Dubrey [2016] Ch 221.
Note similar rules for express trusts the trust must be declared or trust property transferred
to the trustee. If done equity will assist a volunteer but if not then unless the beneficiary
gives consideration, then equity will not assist and the trustee is not allowed to take action,
Re Kay [1939] Ch 329 Re Fry [1946] Ch 312.
