In order to advise my instructing
solicitor on the distribution of the various assets of Harry Lime’s estate. It
is necessary to consider all the facts which are set out in my instructions. I
propose to refer thereto wherever it appropriates during this opinion.
entitlement of 200 shares in Harry Lime Enterprises Ltd to Orson:
In the matter of the
entitlement of 200 shares we have been told that in 2016 Harry has orally
instructed his trustees (Lucy and Joseph) to hold his equitable interest in 200
shares for his brother, Orson. Thus, it can be considered that he is actually
disposing his interest not retaining it instead. This is a disposition of his
equitable interest and therefore it is important to consider what formality would
be required for this purpose. A disposition of an equitable interest whether be
in land or chattels (shares is chattel), must be in writing and signed by the
person disposing (Harry). Therefore, the next issue is to be considered whether
he has done that or not. We only know the fact he has orally instructed assuming
that there has been no writing and therefore no signature. In the case of Grey v IRC (1960) A.C.1, House of
Lords (HOL), held that
the oral direction was ineffective to dispose of the equitable interest and
void for non-compliance with s.53(1)(c) of Law of Property Act (LPA) 1925. This was again affirmed in Oughtred v I.R.C 1960 AC 266 where HOL held that this was a
transfer of an equitable title in the shares that can only take place by a deed
and was caught by s.53(1)(c). As Harry is transferring his equitable title orally
therefore it seems to be void therefore, it cannot be enforceable.
validity of the Transfer of the Mercury Theatre Ltd Shares to Agnes:
Although the legal title to the
shares did not pass to Agnes because of lack of registration, the share
transfer would have been perfected in equity only if Harry had done everything
necessary to transfer the shares: Re Rose 1952 Ch 499. On this basis, the trust in favour of Agnes would have been
completely constituted when the completed share form was sent to Agnes.
However, the share certificate had never been delivered to Agnes. Accordingly, Harry would have held the legal
title to the shares on trust for Agnes. The rule in Re Rose will apply to the purported transfer of shares in Mercury
Theatre Ltd to Agnes due to the delivery of the completion of share transfer
form. However, there was no delivery of the shared certificate: Zeital v Kaye 2010 EWCA Civ 159. In Curtis v Pulbrook 2011 EWHC 167 (Ch)
the transfer was incomplete for two reasons. These were: the steps to perform,
no delivery of the shared certificate and no transfer form. On this basis, the share transfer would be
incomplete due to the absence of delivering the shared certificate by Harry.
Additionally, it seems to apply the
principle in Penningtom v Wayne
2002 EWCA Civ 227 given the absence of any acts or omissions by Harry in
reliance upon having received an apparent gift of the shares. In other words, there is no basis for arguing
that the transfer of shares should be treated as complete, as it would be
unconscionable for Harry’s Lime estate to recall the gift.
Alternatively, if it can be shown
that Harry had a continuing intention to give the shares to Agnes until his death.
The imperfect gift to her will be perfected under the rule in Strong v Bird (1874) LR 18 Eq 315. Therefore,
in the absence of a continuing intention to benefit Agnes the gift of the
shares will fail and result back to Harry’s residuary estate: Re Freeland 1952 Ch 10. On this basis, Holly and Martin would be the
beneficiaries under Harry’s Will.
Validity of the declaration of trust of Luxury Flat (LONDON) in favour of
George and Eugene:
In the subject matter of land
whether it is freehold or leasehold it only requires a deed. If a land is
registered that means a transfer has taken place under s.52(1) of 1925 Act. It
has to be evidence in writing and signed under s.53(1)(b) of 1925 Act.
Therefore, there seems to be no
issue in relation to the transfer of the flat as Harry has done everything: Milory V lord in order to transfer a property legally. As it is
mentioned that Agnes is now the registered proprietor of the property. It can
be submitted that all the formalities of transferring legal title have been met
and therefore, constituted a valid trust.
The only issue arises here is
whether declaration of trust of land or interest in land proved by writing and
signed by Harry declaring a trust. In order for trust to be enforceable there
must be writing and signature compliant with s.53(1)(c) of 1925 Act. However, Harry
has written a note but it is not clear whether he had signed it or not.
Therefore, I would advise my instructing solicitor to take further steps and
examine a note in order to satisfy s.53(1)(b) of 1925 Act to declare a trust to
be valid and enforceable. Upon the query if it doesn’t satisfy the requirement
under s. 53(1)(b) of 1925 Act then a legal and equitable title of luxury flat
London is vested in Isabel.
validity of a trust of yacht in favour of Rita:
In order for an express trust to be
valid, it has to satisfy the three certainties. These are as follows: certainty
of intention, objects and subject matter. Therefore, the issue arises here is whether
the creation of a trust satisfies the three certainties (See Knight v Knight 1840 3 Beav 148). The certainty of intention would be
satisfied as the words are not imperative to create a trust: Re Kayford Ltd 1975 1 WLR 279.
The general principle is
illustrated in Rowe v Prance 1999 2FLR
787. In Rowe, no formality was
required for a trust of a chattel and the yacht is clearly a personal property.
Therefore, a mere use of spoken words was enough. As a word ‘frequently’ suggest that he must
have always referred to the yacht as ‘their’. A phrase ‘I want to treat my yacht as our’ clearly suggests that Harry
declaring himself a trustee of the yacht for himself and for Rita:(See Rowe). Prior to Rowe, issue relating to
a money was discussed in Paul v Constance
1977 1WLR 527 where the use of
these words ‘as much as his as her’ were
held to be sufficient to create a trust of the money. There is also another
case which gives rise to the trust in a way the words were used: (See Re Shelley 1968). Therefore, in these circumstances a court came
to the conclusion the testator’s true intentions must have been to actually create
a trust. According to Rowe, Paul and Re shelly’s case there would be valid trust and it can be
Validity of a Donatio Mortis Causa (DMC) to Joseph:
Joseph is considered as a volunteer.
Harry is intending to make a gift, in contemplation of death therefore it would
fall under a Donatio Mortis Causa (DMC). Donatio Mortis Causa (DMC) provides an
exception to the principle that equity will not assist a volunteer. The gift
must be made in contemplation of death, the donor must intend the gift to be
conditional upon death, the subject matter must be capable of passing under a
DMC, and the donor must part with dominion over property before the testator’s
death. These conditions were laid down by Lord Russell in Cain v Moon 1896 2 QB
283.The issue with regards to a country mansion and a car is whether these
conditions satisfies under DMC principle.
the first requirement is whether a gift of country mansion and a car is made
upon the contemplation of death. In the facts a phrase ‘if I m not not going to pull through’ seems to suggest that
Harry believed that he is not going to survive due to the severe injuries he suffered
in attack. Therefore, both gifts (car and country mansion) were made upon
contemplation of imminent death: Cain v
Moon 1896 2 Q.B. 283. Thus,
this satisfies a first condition.
There seems to be no issue to a second
requirement as a phrase ‘if I do not pull
through’ suggests that Harry has intended a gift to take effect upon his
death. In my opinion this phrase also seems
to suggest a gift of Car and country mansion is only reliable to a limited
period of time.
there must be a delivery of the subject matter with the intention of parting
matter: Country Mansion
Firstly, dealing with a subject
matter of a gift of land (Country mansion). According to the Sen v Headley 1991 Ch 425, CA a gift
of unregistered land by constructive delivery of the title deed can be
considered a valid gift under DMC. The phrase ‘the land certificate is in a box in the top drawer of my desk’ suggests
that a country mansion is registered. Now the issue arises whether registered
title of country mansion is capable of passing a dominion. However, Sen v Headley illustrates that the same
principle of unregistered land can also be applied to the registered land where
a land certificate has been issued. The rule on issuing the land certificates has
been abolished since the Land Registration Act 2002 came into effect.