In order to advise my instructingsolicitor on the distribution of the various assets of Harry Lime’s estate. Itis necessary to consider all the facts which are set out in my instructions. Ipropose to refer thereto wherever it appropriates during this opinion.
Theentitlement of 200 shares in Harry Lime Enterprises Ltd to Orson: In the matter of theentitlement of 200 shares we have been told that in 2016 Harry has orallyinstructed his trustees (Lucy and Joseph) to hold his equitable interest in 200shares for his brother, Orson. Thus, it can be considered that he is actuallydisposing his interest not retaining it instead. This is a disposition of hisequitable interest and therefore it is important to consider what formality wouldbe required for this purpose. A disposition of an equitable interest whether bein land or chattels (shares is chattel), must be in writing and signed by theperson disposing (Harry). Therefore, the next issue is to be considered whetherhe has done that or not. We only know the fact he has orally instructed assumingthat there has been no writing and therefore no signature.
In the case of Grey v IRC (1960) A.C.1, House ofLords (HOL), held thatthe oral direction was ineffective to dispose of the equitable interest andvoid 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 atransfer of an equitable title in the shares that can only take place by a deedand was caught by s.53(1)(c). As Harry is transferring his equitable title orallytherefore it seems to be void therefore, it cannot be enforceable. Thevalidity of the Transfer of the Mercury Theatre Ltd Shares to Agnes: Although the legal title to theshares did not pass to Agnes because of lack of registration, the sharetransfer would have been perfected in equity only if Harry had done everythingnecessary to transfer the shares: Re Rose 1952 Ch 499.
On this basis, the trust in favour of Agnes would have beencompletely 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 legaltitle to the shares on trust for Agnes. The rule in Re Rose will apply to the purported transfer of shares in MercuryTheatre Ltd to Agnes due to the delivery of the completion of share transferform. 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 beincomplete due to the absence of delivering the shared certificate by Harry. Additionally, it seems to apply theprinciple in Penningtom v Wayne2002 EWCA Civ 227 given the absence of any acts or omissions by Harry inreliance upon having received an apparent gift of the shares. In other words, there is no basis for arguingthat the transfer of shares should be treated as complete, as it would beunconscionable for Harry’s Lime estate to recall the gift. Alternatively, if it can be shownthat 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 theshares will fail and result back to Harry’s residuary estate: Re Freeland 1952 Ch 10.
On this basis, Holly and Martin would be thebeneficiaries under Harry’s Will. TheValidity of the declaration of trust of Luxury Flat (LONDON) in favour ofGeorge and Eugene: In the subject matter of landwhether it is freehold or leasehold it only requires a deed. If a land isregistered that means a transfer has taken place under s.52(1) of 1925 Act.
Ithas to be evidence in writing and signed under s.53(1)(b) of 1925 Act. Therefore, there seems to be noissue 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 ismentioned that Agnes is now the registered proprietor of the property. It canbe submitted that all the formalities of transferring legal title have been metand therefore, constituted a valid trust. The only issue arises here iswhether declaration of trust of land or interest in land proved by writing andsigned by Harry declaring a trust.
In order for trust to be enforceable theremust be writing and signature compliant with s.53(1)(c) of 1925 Act. However, Harryhas 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 andexamine a note in order to satisfy s.53(1)(b) of 1925 Act to declare a trust tobe valid and enforceable. Upon the query if it doesn’t satisfy the requirementunder s. 53(1)(b) of 1925 Act then a legal and equitable title of luxury flatLondon is vested in Isabel. Thevalidity of a trust of yacht in favour of Rita:In order for an express trust to bevalid, it has to satisfy the three certainties.
These are as follows: certaintyof intention, objects and subject matter. Therefore, the issue arises here is whetherthe creation of a trust satisfies the three certainties (See Knight v Knight 1840 3 Beav 148). The certainty of intention would besatisfied as the words are not imperative to create a trust: Re Kayford Ltd 1975 1 WLR 279. The general principle isillustrated in Rowe v Prance 1999 2FLR787.
In Rowe, no formality wasrequired 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 musthave always referred to the yacht as ‘their’. A phrase ‘I want to treat my yacht as our’ clearly suggests that Harrydeclaring himself a trustee of the yacht for himself and for Rita:(See Rowe).
Prior to Rowe, issue relating toa money was discussed in Paul v Constance1977 1WLR 527 where the use ofthese words ‘as much as his as her’ wereheld to be sufficient to create a trust of the money. There is also anothercase which gives rise to the trust in a way the words were used: (See Re Shelley 1968). Therefore, in these circumstances a court cameto the conclusion the testator’s true intentions must have been to actually createa trust. According to Rowe, Paul and Re shelly’s case there would be valid trust and it can beenforceable. TheValidity 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 wouldfall under a Donatio Mortis Causa (DMC). Donatio Mortis Causa (DMC) provides anexception to the principle that equity will not assist a volunteer.
The giftmust be made in contemplation of death, the donor must intend the gift to beconditional upon death, the subject matter must be capable of passing under aDMC, and the donor must part with dominion over property before the testator’sdeath. These conditions were laid down by Lord Russell in Cain v Moon 1896 2 QB283.The issue with regards to a country mansion and a car is whether theseconditions satisfies under DMC principle.
1. Consideringthe first requirement is whether a gift of country mansion and a car is madeupon the contemplation of death. In the facts a phrase ‘if I m not not going to pull through’ seems to suggest thatHarry believed that he is not going to survive due to the severe injuries he sufferedin attack. Therefore, both gifts (car and country mansion) were made uponcontemplation of imminent death: Cain vMoon 1896 2 Q.B.
283. Thus,this satisfies a first condition. 2. There seems to be no issue to a secondrequirement as a phrase ‘if I do not pullthrough’ suggests that Harry has intended a gift to take effect upon hisdeath. In my opinion this phrase also seemsto suggest a gift of Car and country mansion is only reliable to a limitedperiod of time.
3. Finally,there must be a delivery of the subject matter with the intention of partingdominion. (a) Subjectmatter: Country MansionFirstly, dealing with a subjectmatter of a gift of land (Country mansion). According to the Sen v Headley 1991 Ch 425, CA a giftof unregistered land by constructive delivery of the title deed can beconsidered a valid gift under DMC. The phrase ‘the land certificate is in a box in the top drawer of my desk’ suggeststhat a country mansion is registered. Now the issue arises whether registeredtitle of country mansion is capable of passing a dominion.
However, Sen v Headley illustrates that the sameprinciple of unregistered land can also be applied to the registered land wherea land certificate has been issued. The rule on issuing the land certificates hasbeen abolished since the Land Registration Act 2002 came into effect.