Equity LG/WS 5 - Lifetime gifts and transfers of property

How do you make a valid gift? Outright gift of both legal and equitable interest?

The donor must have mental capacity (understand nature of transaction) the donor must intend to make gift, the subject matter/donees must be certain, the donor must transfer property in appropriate manner to donee

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Why insist on transfer formalities?

More valuable property the more formalities needed, protection of donor (cooling off period) certainty regarding property ownership (invisible/intangible assets) evidence in court, cut off point

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When will a gift be imperfect?

A gift may be invalid for different reasons..if problem is defective transfer of ownership gift is imperfect

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What are the 2 maxims relating to imperfect gifts?

Equity will not perfect an imperfect gift, equity will not assist a volunteer - won't forcibly deprive an ownership of their assets where they may have had a change of heart

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What are the 3 steps necessary to transfer a legal title to land from donor to donee?

Donor executed transfer deed s52 LPA 1925, donor sends transfer deed to donee or land registry, Land registry registers donee

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What does s1 LP(MP)A 1989 establish?

A deed must be a written doc, which shows the parties intended it to be a deed, is signed by the transferor in the presence of a witness

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How do you effectively transfer chattels?

Chattels inc tangiable/personal assets "personalty" can be transferred by delivery (physically handing over possession) or by executing a deed Jaffa

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How do you transfer money?

Cheque = instruction to bank, instruction is revocable, cheque in favour of the donee must be cashed before donor dies

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What are quoted shares/quoted companies?

Public companies where the shares are freely trade-able - PLC

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What are unquoted shares/ unquoted companies?

Private companies where shares are not freely trade-able - LTD

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What is CREST and when would you use it?

Paperless way of transferring what public companies will use. Registers will be updated immediately

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What are the 3 steps necessary to transfer private shares?

Transferor signs a stock transfer form, transferor hands STF & share certificate to transferee or to the company, company registers transferee as shareholder - only then has transfer been completed

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What is the every effort test?

Exceptions to equity will not perfect an imperfect gift as in Re Rose; equity regards the transfer as complete when the transferor has done everything necessary to effect the transfer

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What did Milroy v Lord establish?

General rule - equity will not perfect an imperfect gift

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What did Mascall establish?

Every effort principle also applies to transfer of land

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What is the definition of unconstitutionality as under Pennington v White?

An imperfect gift is enforceable in equity where the donor intended an immediate gift and it has reached the point where it would be unconscionable for the donor to revoke the gift.

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What are the unconscionable factors that equity will not strive officiously to defeat an intended gift?

PvW;Told about gift, send STF to auditor who told Harold there was nothing more to do, Harold acted on the gift by agreeing to become a director

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What is the rule in Strong v Bird?

The donor intended to make an immediate, unconditional, lifetime gift.The intended lifetime gift was imperfect.The intention to give continued up to the donor’s death.Donee acquired legal title to the asset by becoming the donor's executor/admin

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What did Re Freeland establish?

Rule in SvB failed as No as the donor did not intend to make an immediate unconditional lifetime gift.

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What does s53(1)(c) LPA 1925 establish?

A disposition of an equitable interest subsisting at the time of the disposition, must be in writing and signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.

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What did Curtis v Pulbrook establish?

Where there is detrimental reliance by the donee that may bind the conscience of the donor to justify the imposition of a constructive trust,

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What where Lord Upjohn's explanation of formalities in Vandervell ?

Formalities are required to effect such dispositions of a ben's interest under a trust to prevent hidden oral transactions in fraud

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What did Grey establish?

Whether is it signed by the person disposing the same or his agent, it will be effective if signed by his lawful authorised agent such as T'ee in Grey. Oral instruction to hold on trust need to comply with s53(1)(c) LPA. Disposition= natural meaning

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What did Vandervell establish?

HOL held that s53(1)(c) did not have to be satisfied where a beneficiary with a subsisting equitable interest under a bare trust directed the trustees to transfer the legal title to a third party and the transaction was completed.

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What did Choitram establish?

Privy Council;where the settlor intends to establish a trust with a body of T'ee it will be sufficient to constitute the trust if the property is transferred to at least 1 of the intended T's,recipient be bound by the trust + give effect to it

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What did Jones v Lock establish?

For Bill of exchange and cheques mere physical delivery to the intended t will not constitute a trust

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What did Pennington v Waine establish?

Mere completion of relevant transfer docs may be capable of giving rise to an equitable assignment of the property concerned, even where the transferor has not strictly done everything in his power

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What did Re Fry establish?

Every effort test did not operate as the transferor had failed to do everything which is necessary to transfer title

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What did Re James establish?

Rule of strong v bird operated

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What did Re Gonin establish?

It was held that the donor had no continuing intention, and the rule in SvB could not operate

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What does s53(1)(c) LPA apply?

Transfer must be in writing/signed by disponer, a direction from old ben's to t's to hold interest for new ben Grey

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What is the exception to s53(1)(c)?

Vandervell - adult ben of bare trust and instructs Ts to transfer legal title to 3rd P and legal and equitable interest are reunited following transfer

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What were policy factors for Lady Justice Ardens decision in PvW?

Gift made of free will, told donee of gift, donor sent STF to auditor, auditor told donee nothing more to do, donee consented to be appointed as director - condition

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What were the policy reasons for the maxim 'equity will not perfect an imperfect gift' expressed by LJA?

Giving cooling off period, so donor's can change their mind. To protect creditors. In the interest of legal certainty - clear point when assets given away

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What were the countervailing policies which justified LJA decision in PvW?

Court should give effect to donor's intention, equity will not perfect an imperfect gift seems harsh and paradoxical, equity will not strive officiously to defeat an intended gift, to prevent donor acting unconscionably

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How did Brigss J in Curtis v Pullbrook explain the rationale for the decision in Pennington?

CvP = that it was actually proprietary estoppel - Promise + detriment

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Equity LG/WS 5 - Lifetime gifts and transfers of property

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