Law Extension Committee s5

LAW EXTENSION COMMITTEE WINTER 2017 07 EQUITY ASSIGNMENT

GENERAL FEEDBACK ON ASSIGNMENT QUESTION

PART (a)

The critical issue in this question was to ascertain the meaning of Clause 3 of the will. This involved a discussion of whether it amounted to a trust, equitable charge, conditional gift or equitable personal obligation. This involves the court in construing the wording of the clause, although it can be noted that the courts rarely find clauses of this type to be conditional gifts.

Most students, relying on Gill v Gill, argued that the clause was an equitable personal obligation. Better answers also referred to other cases.

In introducing answers to this question many students referred to the requirement of writing for a will by reference to the definition section of various terms in the Conveyancing Act 1919. The requirements for a valid will are, however, contained in the Succession Act 2006.

PART (b)

The critical issue in this question was whether the Manly house had been assigned in equity pursuant to the principles in Milroy v Lord. Clearly there was no legal assignment to Joseph as there was no registration of the transfer: s 41 of the real Property Act.

With varying degrees of accuracy and detail most students noted that there were two limbs in Milroy v Lord, although few noted that for a valid equitable assignment there had to be an intention to assign. However, in relation to the first limb and the requirement that the assigner has ‘done everything which … was necessary to be done’, most students did not clearly state exactly what that meant. This was settled in Corin v Patton to mean that the assignor has done all those things for a legal assignment of the property that only the assignor can do. Most students, by referring to the analogous facts in Corin v Patton, correctly applied the first limb, and held that it had not been satisfied because Victor had not written to the solicitor directing him/her to release the certificate of title to Joseph. In relation to the second limb, it clearly was not met because the certificate of title was not in Joseph’s possession. Many students did not even mention the second limb, based upon their conclusion that there could be no valid equitable assignment because the first limb had not been satisfied. It is suggested that even though this may be the case, in answering such a question, one should nevertheless state the second limb and apply it to the facts.

PART (c)

The central issue in this question was whether there was a valid donatio mortis causa (DMC) – an exception to the maxim that equity will not assist a volunteer - in relation to the FJ Holden. Most students dealt with this issue and stated and applied the relevant principles.

of 3 The element that the property had to be delivered was the one that raised the most difficulty. Most students recognized that symbolic delivery of personal property could take place by delivery of things such as keys or some indicia of title. In this case the keys to the FJ were given to Joseph, as bailee, for the purpose of driving Victor to the hospital, not as part of any process of giving Joseph the car. This raised the question of whether, assuming the other elements of a DMC were established, there could be a valid DMC in circumstances where Victor said nothing about the keys at the relevant time. Students that raised this point generally referred to Woodard v Woodard [1995] 3 All ER 980, to argue that in similar circumstances there was a valid DMC where keys were already in the possession of the intended donee of the DMC. However, in that case the donor made specific reference to the keys when he said, in reference to a car: ‘You can keep the keys, I won't be driving it any more’. Whether this is a material difference to the facts of the problem was something rarely raised. It could be argued that Joseph’s original possession of the car as a baliee could not be converted to a DMC without Victor specifically referring to the keys.

PART (d)

The critical issue in this question was whether there had been a valid assignment of the royalties, which raised the specific point of whether what was being assigned was present or future property. Some students simply assumed it was future property. Others, with varying degrees of specificity and reference to cases such as Norman v FCT, Shepherd v FCT etc, discussed what the courts look to in determining that question. Ultimately it is a matter of construing the words used to see whether the future property itself, or the presently existing right to some future property, is being assigned. Many students made no reference to this, but simply to the metaphor of ‘tree’ and ‘fruit’, which was a little bit odd. Clearly there was no fruit or tree being assigned in the question! If it was, as is likely, that was being assigned was future property, then a valid assignment required an intention to assign and that it be assigned for valuable consideration: Holroyd v Marshall. Clearly that was not the case on the facts, and there would have been no assignment.

PART (e)

This question raised whether there was an effective disposition of the shares to Joseph. Many students spoke of Marcus seeking to assign the shares, which clearly was not the case and which clearly did not take place. Marcus was seeking to dispose of the shares to Joseph by means of a direction to the trustee of the shares (Victor). Many students discussed and contrasted the cases of Grey v IRC and Vandervell v IRC and concluded that Marcus’s direction was one in which he was dealing with both the legal and equitable interests. While that was correct, the discussion of these cases was not really to the point, as they were cases in which the directions were oral and the issue was whether the directions breached the writing requirement set out in s 23C(1)(c) of the Conveyaning Act. However, this was not an issue on the facts, given that Marcus’s direction was in writing. Thus, there could not be any breach of s 23C(1)(c).

The remaining issue was whether Victor’s death before he attended to actually transferring the shares to Joseph had any effect on the disposition. Many students did not address this issue at Page 2 of 3 all. The trustee’s death does not affect the trust or obligations or duties under the trust, as is noted in para 26.14 of the textbook.

GENERAL COMMENTS

This assignment was, overall, done reasonably well. However, there is room for improvement in a number of areas including:

(i) ensuring that relevant principles are accurately and comprehensively stated; (ii) properly referencing statements of law – some students offered no authority for relevant legal principles, or cited the textbook as authority when there existed clear case-law or statute as authority; (iii) proof-reading assignments before submission – there were quite a few instances of sloppy expression and obvious typographical errors, eg lots of references to donation mortis causa.