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Constitution essay on Imperfect Gift
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The statement in question implies that judgement in Pennington v Waine hasleft the law on constitution of trust in a state of uncertainty. Indeed, it is
claimed that Arden LJ went too far with his remark that "equity is not past the
age of child bearing."
The classic note in Milroy v Lord by Turner LJ that settlor/donor must have
taken all reasonable steps to ensure that the property is transferred to
trustee/donee, or else the intended trust or gift will fail, as equity will not assist
a volunteer to perfect an imperfect gift or trust. As this is well-entrenched
beginning for the law in this area. Equity will not perfect an imperfect gift of
legal title to property by considering the intended transferred as self-
declaration of trust, as declared in the case of Deslauriers v Guardian Asset
Management. As per Richards v Delbridge and Jones v Lock
well demonstrate the applicability of this principle in Milroy.
It is argued Milroy's strict stance is commendable since it provides protection
to donor or settlor by allowing them to change their minds at any time before
the trust is completely constituted. Furthermore, donee or beneficiary is
merely a volunteer and cannot claim that he has been denied the benefit of a
gratuitous gift.
Nonetheless, per Arden LJ correctly pointed in Pennington, equity had in
favour of donee on multiple occasions and in multiple ways. There had been a
few exception in Milroy v Lord rule. Evershed M.R. held in Re Rose that once
the settlor/donor has done everything he can to get rid of the property and a
third party's help is needed to complete a trust or gift, until the property is
registered in the trustee's/donee's name, the settlor/donor holds the property
on trust for the trustee/donee. In such conditions, Oakley suggests that a
constructive trust arises.
Perhaps one should consider whether Re Rose's application of this principle
is correct? In Re Fry, Romer J held that gift failed because donor had not
done everything required to effect the transfer of the shares as he had just
applied for but not received consent from the Treasury to transfer shares and
Treasury may demand more information to be submitted. On this account, it
can be argued that Court of Appeal(COA) in Re Rose did not conduct a
thorough analysis of the facts. Because the transaction involves the transfer
of shares in a private company, the consent of the company's directors was
necessary before transfer of shares could be registered as directors have
right of pre-emption. On this basis, the donor in Re Rose has similarly failed to
do everything required to complete the transfer of legal title to the shares as
director's consent has not been obtained. How do we reconcile the
both cases which have essentially the same facts? It may be claimed that
there was uncertainty in this area of law even before the Pennington case.
Moreover, in Mascall v Mascall, Re Rose principle is applied, the court held
donor had executing the registered land transfer form, he gave his son
the house as a gift in equity. then giving it along with the land certificate to his
son. Mascall is an extension of Re Rose principle not only because subject
matter was widen to include land, but because the rule's application hindered
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