Essay on Equity and Imperfect Transfer

4301 Words May 3rd, 2013 18 Pages
Legal writing and credit

For a trust instrument to be valid and effective, it must be properly constituted. For a trust to be deemed as completely constituted, all of the relevant formalities must have been satisfied by the settlor, hence the legal title of the property must transfer to the trustees. The reason for a conveyance of property to the hands of trustee is explained in Milroy v Lord (1862) by Turner L.J. is that a valid and effectual voluntary settlement will exist, when the settlor have done everything which was necessary according to the nature of property comprised in the settlement, which is to transfer that particular property to the trustee. This requirement of constitution of trust is clear and straightforward, the
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Since the third method is that the settlor declare himself as the trustee, transferring the legal title is not necessary, because the settlor already has the legal title of the property.

As mentioned that if the formalities for the conveyance is not complied with, then the settlement will be deemed as ineffective transfer. The maxim of “equity cannot perfect an imperfect gift” will apply. Such approach is pursue to ensure that a donor, who act carelessly or unwisely, have the opportunity of change of mind. Apart from Jones v Lock (1865), there are other decided case law which is readily to uphold the maxim of “equity cannot perfect an imperfect gift”, an example would be the case of Richards v Delbridge (1874) where the settlor purported to assign legal title of a lease to his grandson, however the gift failed because there was no deed created for the conveyance of the legal title of the lease. A deed of conveyance is needed for the transfer of the legal title of lease, unless it was a short lease. The court would not interfere with the law and give effect to the gift, because by giving effect to such gift will open the floodgate argument, which would allow many litigant to claim for their gift or trust which is not completely constituted. Another example is seen in Milroy v Lord (1862), an attempt to create a trust of 50 shares

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