Formalities

Question 1

s53(1) LPA 1925

Answer 1

The need for a trust respecting any land to be in a deed

Question 2

Gardner v Rowe 1828

Answer 2

Failure to comply with formalities makes the trust unenforceable

Question 3

Equity maxim relevant to formalities

Answer 3

Equity will not allow a statute to be used as an engine of fraud

Question 4

Rochefoucauld v Boustead 1897

Answer 4

F: D orally agreed to hold land for R, R sold land
I: Is it unconscionable?
H: D could not take advantage of the lack of formality to deny the trust, so D held proceeds on trust for R

Question 5

Bannister v Bannister 1948

Answer 5

H: A agreed to convey a house to B, with A to live there rent-free for life, B sought possession
I: Is it unconscionable?
H: Yes, so court enforced trust for A despite lack of formality

Question 6

What is the nature of the s53(1)(b) trust?

Answer 6

First considered to be express, but then constructive so that it would fall within s53(2) - no formalities required

Question 7

s53(1)(c) LPA 1925

Answer 7

Dispositions of equitable interests

Question 8

Methods of disposal of equitable interests

Answer 8

• Assignment
• Direction to trustees
• Contracting to assign
• Declaration of trust of equitable interest

Question 9

Failure to comply with requirements of disposition of equitable interests

Answer 9

Makes the disposition void

Question 10

Key features of s53(1)(c) transactions

Answer 10

• Equitable interest moves to someone else
• Equitable interest is subsisting
• Equitable interest is not extinguished

Question 11

Is assignment of B’s equitable interest to A a disposition?

Answer 11

Yes, see Re Danish Bacon 1971

Question 12

Is a declaration of a new trust a disposition?

Answer 12

Not a disposition as no subsisting equitable interest

Question 13

Is a disclaimer of interest a disposition?

Answer 13

No, see Re Paradise Motor Co 1968

Question 14

Is a direction to a trustee a disposition?

Answer 14

Yes, see Grey v IRC 1960

Question 15

Is transferring legal and equitable interests together a disposition?

Answer 15

No, but see Vandervell v IRC 1967 - if an option to buy back retained, then RT and then it is

Question 16

Are specifically enforceable contracts to assign the equitable interest a disposition only when the assignment takes place?

Answer 16

No, equity treats as done what needs to be done, so if contract specifically enforceable, equity treats transfer as complete at time of contract

Question 17

Oughtred v IRC 1960

Answer 17

F: Shares held on trust for O for life, and then for P, oral agreement for consideration that P would release remainder interest to O, deed then confirmed shares held on trust for O absolutely
I: Was there a need for writing?
H: No, as it was CT, no need for writing

Question 18

s8 Wills Act 1837

Answer 18

Formalities for a will

Question 19

Failure to comply with formalities in a will for trusts

Answer 19

The trust will fail

Question 20

Where do secret trusts operate?

Answer 20

Outside the testamentary formality requirement

Question 21

Fully secret trust

Answer 21

Testator leaves property to a named individual in will, intends will to hold on trust for benefit of another, the will makes no indication of the intention that there should be trust

Question 22

Half-secret trust

Answer 22

Same as fully secret, but existence of the trust mentioned, just not the beneficiary

Question 23

Requirements for a secret trust

Answer 23

• Intention to create a trust
• Communication of the trust to the legatee
• Acceptance of the trust by the legatee

Question 24

In fully secret trusts, when does the testator have to communicate the terms to the legatee?

Answer 24

Testator must communicate terms to the legatee and by accepted by him before testator’s death

Question 25

Re Boyes 1884

Answer 25

F: Existence of a FS trust communicated and accepted prior to death, but beneficiaries only revealed in letters found after death
I: Was there a secret trust?
H: No

Question 26

Re Colin Cooper 1939

Answer 26

Changes to terms of FS trusts also must be communicated

Question 27

In FS trusts, does the communication have to be before or after the will is made?

Answer 27

Doesn’t matter

Question 28

In HS trusts, when do the terms have to be communicated to the legatee?

Answer 28

Before, or at same time as execution of the will, see e.g. Blackwell, Re Keen

Question 29

Re Keen 1937

Answer 29

F: Communication to ST prior to execution of the will, but will referred to “such persons as may be notified by me”
I: Was there a HS trust?
H: No, as this inconsistent with prior notification

Question 30

Consequences of a failed FS trust

Answer 30

Usually, the legatee will take absolutely, unless secret trust accepted by legatee but testator adds further property, in which case only the further property is taken absolutely, see Re Colin Cooper

Question 31

Consequences of a failed HS trust

Answer 31

Legatee holds on RT for the testator’s estate

Question 32

How does dehors the will theory view secret trusts?

Answer 32

As express trusts