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    Hi I am really struggling with equity and trusts and don't quite understand what i am to take from the case of Vandervell No.2.

    Here is what i understand already:
    In Grey v IRC it was held that a disposition was the movement of equitable interest from one part to another, thus invoking s53(1)(c), requiring it to be made in writing. And in Vandervell No.1 it was held that where there is a movement of both legal and equitable interest together, it is not a disposition and thus is not required in writing.

    What I don't understand is what Vandervell No.2 is contributing.

    Please can someone explain it to me In as simplest terms as possible.

    - especially the idea of the resulting trust in the option - this just throws me a bit.

    Thank you soon much.


    Re Vandervell's Trusts (No. 2) created a means of circumventing the statutory formalities required for the disposition of a subsisting equitable interest in trust property.

    In layman's terms:

    Suppose a Father wanted to settle 10,000 shares on 1 of his 3 children. Therefore, he intends to create an express trust and transfers the shares to his solicitors and asks them to act as trustees, holding the property on trust for one of them. The company holding the shares then registers the transfer of legal title to trustees as complete.

    However, at this point he hasn't identified which child is to be the beneficiary under the trust. So, to that end, because he hasn't satisfied the certainty of objects (beneficiary) requirement, it does not constitute a valid express trust. Given that equity abhors a vacuum the property is held on resulting trust for the Father.

    Now, 2 weeks later the Father then calls his solicitors and tells them he wants to transfer his equitable interest in the shares to his daughter, Jane. Thus, a new trust is created, rendering the resulting trust extinct, meaning that the Father's disposition of his equitable interest is not caught by s. 53(1)(c) LPA 1925.

    So, basically, where a new trust extinguishes a resulting trust, it is not caught by the statutory formality requirements.
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