Dua! Formative Assessment Equity and Trusts Answer and Feedback Indicative Classification: First ANSWER In this case, Bob intended to give the shares to Helen and Sarah (200 shares each). However, Helen and Sarah failed to submit the share transfer forms to Dryad Ltd, resulting in an incomplete constituted gift. Felix, who is entitled to Bob's entire estatewould seek to rely on the general rule in Milroy v Lord so that he would be entitled to the shares whereas both Helen and Sarah would seek to rely on the exceptions to the general rule. According to Turner LI, the 3 modes of making a gift are as followed: Self-declaration of trust Outright transfer to the donee Transfer to a trustee on trust for the beneficiary On the facts, it was a gift. It must be noted that both Helen and Sarah are volunteers since they did not provide any consideration and equity will not assist a volunteer. The principle in Milroy v Lord is that equity will not perfect an imperfect gift. On the facts, Helen and Sarah did not submit the forms to Dryad Ltd and so Bob remained the shareholder of the 1000 shares. Felix would argue that since the titles have not transferred to Helen and Sarah and this is an imperfect gift. Thus, he should be entitled to those shares. ‘The answer would consider whether any exceptions to the general rule in favour of Helen and Sarah can be applied. Helen The first exception to be considered is that in Re Rose in which the principle is that where a settlor has done all his power to transfer the property, but something is yet to be done by a third party, the transfer will be immediately valid in equity. Consequently, although it will remain ineffective to pass the legal title unless and until Helen does whatever remains to be done by her, Bob, the transferor will in the meantime hold the shares on constructive trust for her. In Re Rose it was held that when he had delivered the duly executed share certificate to his wife, the transferor had done everything within his power. The present facts of the question is similar to Re Roseas Bob had also delivered the properly filled out transfer form to Helen and she had received it. Which means to say, Bob had done all in his power to effect the transfer of the shares in relation to Helen. Further, Lord Hoffman in Pehrsson v Von Greyerz stated that: i. The donor must have the intention to transfer the subject matter to the donee. ii, The donor must have relinquish all control over the property and iii, The donor must clothed the donee with the power to complete the transfer. On the facts, the fact that Bob had taken the necessary steps to properly fll out the form, putting them inside birthday cards and posting it to Helen showed that Bob had the intention to transfer Page 1 of 4Formative Assessment 2018 her the shares as her birthday gift. When Helen received it, Bob had relinquished all control over the property and Helen has been clothed with the power to complete the transfer now with the properly filled out and registrable transfer form in her hands. All she has to do is to bring the necessary documents to Dryad Ltd to do the necessary to transfer it. This is also seen to be similar to the case of Mascall v Mascall where it was held that as soon as the father had executed the transfer form and had given it to the son, the gift was complete in equity as the father had done all that he could. The application to the land registry was to be made by his son, from whom the father had no right to recover the transferred land certificate. Applying these cases, itis likely that Bob would hold the shares on constructive trust for Helen. This trust arises when Helen received the post from Bob. Sarah Similarly, Felix would daim that he is entitled to Bob's entire estate including this 200 shares, that was intended by Bob to be Sarah's gift, by relying on Milroy v Lord due to the fact that at the time of Bob's death, he remained the shareholder of the shares, meaning the legal is not conveyed to Sarah, Hence, he is entitled to the imperfect gift. The question now is, cane Rose applies here? As stated above, where the settlor had done all in his power to transfer the property and something is yet to be done by a third party, the transfer will be valid, However, on the facts, Bob had not done all in his power since the forms has not been signed. As such, this exception will not apply. The criteria by Lord Hoffman in Pehrsson v Von Greyerz is not satisfied as by not signing the transfer documents, the donee is not clothed with the authority of the donor. The exception to be considered is that in the case of Pennington v Waine. The question is would it be unconscionable for the gift to be resiled? InPennington, Arden LJ highlighted the 2 maxim, namely equity will not aid a volunteer and on the other hand, equity will not strive officiously to defeat a gift. On the facts, Sarah is clearly a volunteer and hence will not be able to invoke the assistance of equity. However, equity will not strive to defeat a gift as per the decision of Pennington This is because in Pennington, Mrs. Crampton duly signed the necessary document and so Arden LJ was of the view that all the circumstance of the case lead to the conclusion that it should give effect to the gift which Mrs. Crampton intended. On the facts, however, Pennington can be distinguished as Bob did not even sign the documents, he had not done everything in his, power to effect the transfer. Pennington v Waine may not apply. Itis likely that Felix would be entitled to the 200 shares. Itis submitted that while intention of the settloris important and should be given effect, allowing claims where there are no proper execution of forms (documents notbeing signed by settlor) ‘would open the floodgates of litigation. Claimants would then be able to come before the court, and claim for gifts even without proper documents with settlors signature. Although there is continuing intention of Bob to benefit Sarah up to the point of his death, that intent to benefit is insufficient and should be proven by providing signature. If Helen and Sarah were appointed as the executrix At common law, the appointment of a debtor to be one’s executor had the effect of cancelling the executor's debts to the estate. In Strong v Bird, the court held thatthis rule should prevailed if testator had the intention to forgive the debt in his lifetime and this intent continued up to his, death. This rule which is in relation to debts in Strong v Bird was extended to cover imperfect gift Page 2 of4Formative Assessment 2018 in Re Stewart. On the facts, the shares that was intended to be transferred to Helen and Sarah ‘were imperfect and if they were to be Bob's executrix, Re Stewart may applies if Bob had that, intentto give the shares to ther ifetime and this intent continue up to his death. It should be noted that, with this extension, equity is now positively assisting a volunteer. Equity is said to be ‘acting off its own bat to assist a volunteer in Re Stewart because there has never been any ‘common law rule an ineffective attempt to make a gift during the testator’s life is made effective upon the putative donee’s being appointed his executor. The reasons given by Neville J are that the vesting of the property in the executor on the testator’s death completes the imperfect gift made in his lifetime and the intention of the testator is sufficient to countervail the equity of beneficiaries under the will as the testator had vested legal estate in the executor. Helen and Sarah must be advised that the mere appointment of executrixis insufficient. According toRe Pink the intention is paramount. There must be a present, continuous intention to make a life time gift. On the facts, there was no issue since Bob’s intention was to make an immediate gift and that intent maintained up until his death (there is nothing in the factsto suggest that Bob want to retract the sharesbefore his death). Its likely that Strong v Birdmay apply and both Helen and Sarah may be entitled to the shares. FEEDBACK Knowledge of major concepts, principles and veryGood | Good | Satisfactory |__ Poor rules ofthis area of law Level of understanding bevel of under Excellent Good | satistactory | Poor ‘Analysis ofthe question Good | satisfactory | Poor Synthesis and use of Good | Satisfactory | Poor sources Evaluation Good | satisfactory | Poor Ability to write English Good | satisfactory | Poor Use and understanding of aie Good | satistactory | Poor Understanding of legal literature and materials Good | Satisfactory | Poor COMMENTS Good to start with the issues, perhaps a little more concise to helpwith time management but itis clearly stated. Very good discussion of H and S. Perhaps a little more of the judicial and academic response to Pennington v Waine would help develop your analysis. You could also have considered the certainty of subject matter for the gift, with reference to relevant ‘case law. This was an issue which was an issue on the facts. So be careful to address all issues. Page3 of 4Formative Assessment 2018 In the alternative you identify Strong v Bird as extended by Re Stewart. This is clearly stated and well structured. A very good answer my one commentis to develop the unconscionability content alittle more. Page 4 of4