Formalities in Equity

Alan executed a transfer of a registered freehold estate in land to Belinda and Charles, and simultaneously declared that they were to hold the land as trustees for David absolutely. The transfer to Belinda and Charles was duly registered but Alan’s declaration of trust was never reduced to writing.

Belinda and Charles later took the view that Alan’s oral declaration of trust was probably ineffective so they told Alan that they had no intention of carrying out the trust. This suited Alan since he had changed his mind in the meanwhile and now preferred to see the land go to Edward instead. He orally directed Belinda and Charles to transfer the registered estate to Edward as beneficial proprietor. Belinda and Charles duly executed the memorandum of transfer and passed it to their own solicitor to hold until the date arranged for completion with Edward. Alan died suddenly before completion.

Belinda and Charles are unsure whether they should still proceed with the transaction.
Advise them.

Oral declaration of Trust (beneficial interests)

3. Belinda and Charles duly executed the memorandum of transfer and passed it to their own solicitor to hold until the date arranged for completion with Edward.
Same rules as above, comment if this has met the requirement.

Advice is sought on whether B and C should still proceed with the transaction of legal and equitable title to E.

Where is the legal and equitable title?

First part of the problem:
--> Legal transfer of land to B + C (formalities observed);
--> but s.53(1)(b) not observed (trust of land must be declared in writing).
--> So the trust for D (with B+C as trustees) technically fails. SO Legal title is with B+C.
--> Has the trust been formed? TWO possible answers: (1) the trust has not been formed, therefore B+C hold legal title on resulting trust for A. (2) the trust has been formed through "constructive trust" mechanism: "equity will not allow Statute to be an instrument of Fraud" (Rochefoucauld).
--> If (1): legal title is with B+C, and beneficial with A; if (2): legal title with B+C, and beneficial with D.

Second part of the problem:
--> Intention of the settlor: to transfer legal and beneficial title to E.
--> If (1): need for s.53(1)(c) formalities: A needs to do it in writing for disposition of beneficial interest. It can be done by an agent "lawfully authorised in writing or by will": B+C not authorised in writing, therefore fails.
BUT possibility, that Vandervell No 1 exception applies: both legal and beneficial move together, so no need for s.53(1)(c).
--> If (2): Will depend on whether D was informed of the will to transfer property to him, whereby problem of proprietary estoppel.

--> THE ANSWER DEPENDS on the legitimate expectations of D in the first instance. (If D has a legitimate expectation of receiving property, then B+C should not go ahead with transaction)
--> THE ANSWER ALSO DEPENDS on the expectations of E. Re Rose: has he done everything within his power? I think so... but you say he hasn't. Then Choithram v Pagarani and Pennington v Waine: would be "unconscionable" to defeat the gift (Maxim: "equity will not strive officiously to defeat a gift"). (If E has the expectation of receiving property it would be unconscionable for them not to continue with transaction)

As for RE ROSE: I don't know what you mean by "it fails here". If you mean that "the settlor did not do all that was within his power". Maybe it does fail, and i should think it is because E was not informed of the transfer, whereas in Re Rose, the wife was waiting for the transfer (?)


NOT SURE IF THIS ANSWERS YOUR QUESTIONS!!! I have to admit, I had trouble answering them. Post your attempt at this question.

My first question was, essentially, that A tells B and C to hold for E as BENEFICIAL PROPRIETOR but they execute a transfer form, suggesting LEGAL TRANSFER which lead me to wonder if they had the power to alter A's expectations or if my land law is still as abysmal as it was for most of last year and beneficial proprietor means legal ownership...

I think when they say proprietor they mean legal owner, particularly since A asks B and C to transfer to E - it could be clearer!

On Re Rose not applying, I wonder whether the point is that in Re Rose the would-be transferor was the beneficial owner, and he came to hold on constructive trust for the intended transferee, whereas in this case B and C are trustees?

And this is exactly why I don't like land law (Which is ironic given that it was by far my best mark. All I can say is that it wasn't because of my grasp of terminology). I suspect that's why so many candidates got confused. Thanks!

Maybe? I thought the point of Re Rose is that you have to do everything in your power to effect the transfer which I didn't think would be affected by who has what, as such. But I guess it could be that since the trustees are the transferors ... nope, still confused because surely if *they've* done everything possible, it should be fine?

Gah, I would ask my supervisor but that requires phoning him up and I feel sort of weird about phoning his house and asking for help...

Hmm, I see what you're saying, but in this case B and C weren't trying to create a trust, they were going about bringing it to an end, so it seems as though Re Rose doesn't fit. But if it could be applied to this situation, I see your point that they are awaiting a completion date rather than a third party's action.

I wouldn't worry about phoning him, he'll just think you're really enthusiastic!

The third question, about agency, still confuses me - can the trustees be the agents?

This problem seems to be solved! cool.

BUT one more thing (which doesn't really affect the rest of the answer):



Trustee Act 2000: Trustees have the power to appoint agents. Wouldn't that mean that powers of agency are vested in the trustees in the first place?
Or maybe, two acts were undertaken by the Settlor: one was creating a trust with B+C as trustees, and the other was appointing B+C as agents for the transfer.

I assumed the agency point was to do with S.53, given that one of the subsections doesn't mention agency so there's a debate as to whether an agent can sign or not.

Ah well, a friend of mine has somehow convinced one of last year's examiners to go through that past paper with a group of us next week so I can ask her then. She wrote the paper, she *must* know the answer

OK, well that doesn't preclude what I said about B+C as agents (the discussion may ensue... although, I doubt there actually is a discussion; statute either allows or not, and rule of interpretation: must look at the whole of the statute [so if allowed in one place, but silent in another, it is safe to assume that it is not allowed])

I'd ask for you to post the answers after meeting with the prof, but my exam's on Monday...!

Hi dear

I want to know if the beneficiaries recieve no assest undre discretionary trust, can the beneficiary challenge the trustees' use of discretion and whether the beneficiary can find out the exact terms of the trust and the contents of any instructions the settlor gave the trustees.