Equity and trusts problem question answers

Equity and practices problem hesitation answersEquity and curses problem question (1500 words)This scenario relates to the purported creation of a religious belief. We are told that Michael has verbalise to his daughter that I promise to transfer to you within the year authorized property. The first issue to determine is whether this is sufficient to bring forth a trust. One of the principal requirements for the productive establishment of a trust is consequence, and in this instance, certainty of intention is relevant. Knight v Knight (1840) established that the tierce certainties must be present certainty of intention, of subject matter, and of object. Also of relevancy here is the equitable truism that equity look to intent, not conformation. This means that it is not necessary for the firmness explicitly to include prolongation to the word trust. The fact that Michael does not refer to a trust does not, therefore, defeat the attempt to establish a trust. By way of e xample, in Paul v Constance (1977) the words the money is as much yours as mine in reference to deposits in a bank theme were sufficient to create a trust. There is no requirement that the declaration be in writing either, unless the trust property is land.The second certainty that is need is certainty of subject matter. What is the trust property? In this instance, Michael has desire to create a trust everyplace certain property. This go forth fail for evidential distrust there is no clear precondition of what the trust property is. Lord Hailsham indicated in his judgment in IRC v McMullen (1981) that the courts are generally reluctant to invalidate a trust for uncertainty of subject matter and go forth, where executable, apply a reasonable construction to the choice of words of the trust in nightclub to make them valid. In this instance, however, there is no reasonable construction that could make this vague declaration sufficiently certain. Michael goes on, however, to impute this property as being his Cartier watch, his shares in ABC plc, the legacy he expected to receive from his uncles pass on, and Tranquil View, a free flirt with house. This, then, ordain work the evidential certainty criteria.The next issue to consider is who the trustee is over each of the trust properties. Michaels watch is a chattel. A trust further becomes fully constituted once the property is in the transfer of the person properly bound to be the trustee. In this instance, the bank is memory his watch. The bank, then, becomes the trustee as soon as the declaration is made. In Milroy v Lord (1862), Turner LJ set out his famous three modes of make a gift an outright transfer of the legal prenomen to the property, a transfer of legal title of the property to a trustee to hold on trust, and a self-declaration of trust. As we bugger off seen, Michael has transferred, by his declaration, the legal title to the watch to the bank. There is no delivery requirement as it is already in the banks possession. In coitus to Michaels shares in the public company, the Re Rose (1952) mooring is relevant. Another equitable maxim is that equity will not assist a volunteer, meaning that in order successfully to create the trust, Michael must have done everything possible to transfer the legal title to the trust property. In Re Rose, the accost of Appeal upheld a trust where the donor had done everything he was compel to do to make the trust valid.In relation to the shares, Michael will have to execute a stock transfer form in order to create the trust. This principle was extended by Pennington v Waine (2002), although this still required the execution of a stock transfer form. Michael has withal sought to create a trust over future property, his expected legacy from his uncle. This is a mere expectancy rather than a trust. Equity will still enforce this as a trust if some consideration was accustomed for it, which does not appear to have been the cas e in this instance. It is a unmerited assignment and is not therefore legally enforceable. Tailby v formalised recipient (1888) is authority for equity enforcing an imperfect transaction where consideration was given. In relation to the freehold house, a trust over real property can only be fully created in writing (unlike trusts over personalty). There will not be a properly constituted trust, then, over the property.Michael has also verbally promised to his mistress that she will have the freehold house. This is a case of donationes mortis cause, or deathbed gifts, which are made inter vivos. What distinguishes this from a deathbed gift, however, is that it is not conditional upon Michaels death, as he says whether I die or not. Cain v Moon (1869) is authority for the fact that deathbed gifts must be in observation of death. He also gives his mistress the keys to the safe which contain the title deeds, and hence he has delivered to her the legal title, in essence. This is suf ficient to create the trust although as mentioned this is not a donationes mortis causa.We come to Michaels will which was validly created, and which takes work upon his death. The 200,000 trust to create a sports ground for the employees will be successful as it is sufficiently certain as to the trust objects (i.e. the beneficiaries). This is a trust for a purpose, and pure purpose trusts will be invalid, however. Equity will not recognise a trust to carry out a purpose as the benefits of carrying out a purpose cannot be localized to specific individuals (see Morice v Bishop of shorthorn (1804)). The trust for the purpose of erecting and maintaining a monument will be invalid succeeding(a) Re Endacott (1960) in which a gift of some 20,000 was made for the purpose of providing some usable memorial to myself. This was invalid. The trust for the purpose of face after his pet tortoise will be valid as an exception to the no purpose rule, following Pettingall v Pettingall (1842), i n which a trust was valid for the purpose of looking after a horse. The gift for the purpose of educating his children is obviously no extended relevant so the trust property will revert to Michaels estate.Finally, he leaves a legacy for the purpose of building a raw clubhouse. Gifts to unincorporated tie-ups were discussed in buttoned-up and Unionist Central Office v Burrell (1982), and the lacrosse club meets the criteria for an unincorporated association. Once the association is dissolved, the property which is held by the members of the association is not bona vacantia but there is no resulting trust because the property was held infra a bare trust. The members can therefore distribute the property among themselves as they see fit.Precatory words are words of prayer or request in wills. The gift of Michaels jewellery to Nileema is an example of this, and the case law suggests that these words are sufficient to create a trust, although in Lamb v Eames (1871) the Court of App eal did not allow corresponding words to create a trust. The gift of the majority of his model soldiers whitethorn fail for conceptual uncertainty of subject matter following Palmer v Simmonds (1854).The cy pres doctrine preserves charitable trusts from failure, and strives to make the trust as rise as possible. It is likely that the gift to the museum which has closed will be transferred to the Museum of Childhood which now holds the collection. The fund for charitable or benevolent plant life is a general charitable intention, following Buckley Js summary in Re Lysaght (1966). This is wholly charitable and will be valid under the provisions of the Charities Act 2006. The gift to his trustees is a power rather than a trust and will be valid following Re Douglas (1887). The gift of half his shares in ABC plc will be valid, as it is sufficiently certain to determine the property following Hunter v Moss (1994) provided it can be discerned which shares Michael was referring to.BIBL IOGRAPHYStatutesCharities Act 2006CasesCain v Moon 1896 2 QB 283Conservative and Unionist Central Office v Burrell 1982 2 All ER 1Hunter v Moss 1994 3 All ER 215IRC v McMullen 1981 AC 1Knight v Knight (1840) 3 Beav 148Lambe v Eames (1871) 6 Ch App 597Milroy v Lord (1862) 4 De GF J 264Morice v Bishop of Durham (1805) 10 Ves 522Palmer v Simmonds (1854) 2 Drew 221Paul v Constance 1977 1 All ER 195Pennington v Waine 2002 EWCA Civ 227Pettingall v Pettingall (1842) 11 LJ Ch 176Re Douglas (1887) 35 Ch D 472Re Endacott 1960 Ch 232Re Lysaght1966 Ch 191Re Rose 1952 Ch 499Tailby v Official Receiver (1888) 13 App Cas 523Secondary sourcesMartin, J.E. (2001) Modern Equity, 16th mutation (London harming Maxwell)Pearce, R. and Stevens, J. (2006) The Law of Trusts and Equitable Obligations, 4th Edition (Oxford OUP)Penner, J.E. (2004) The Law of Trusts, 4th Edition (London LexisNexis)