HISTORY OF EQUITY EQUITABLE INTERESTS VIC – Swanston Mortgage – Appeal Div of SC, rejected Mcain’s Caveat and held If there is an inconsistency with CL and equity, equity will prevail. Harlun v Belidios When division of legal and equitable title = a trust, w hich is to vest purchaser w ould prevail. here overlooked that in latec purchaser was registered. Earl of Oxford (1615) s7(3) of Civil Proceedings Act QLD legal title in one person (trustee) and equitable title in beneficiary . McCain v Maloney – question left open as to w hich party (M’or/ purchaser) should Eg doctrine of contribution at CL: surety cannot claim a contribution from other surety Baker v Archer Shee beneficiary under trust is the equitable ow ner of the property held prev ail. to pay debt- until has claimed more than their share. in trust Metreo Developments v Agnyss – Judge made mistake – said interest in land meant Equity : surety can join other surety if creditor brings action against one surety (each DKLR holdings Absolute owner in fee simple doesn’t own equitable and legal interest – right in relation to land. Interest in land is not the same as a right in relation to land. must pay half of debt) Woolmershausen v Gullick A man cannot be trustee for himself Court of Chancellery - orders of Lord Chancellor EQUITABLE JURISDICTION: Common injunction HEIRACHY OF EQUITABLE INTERESTS: (1) Exclusive (1) Directed against a potential CL plaintiff from brining a CL action (1) Equitable property interest in specific property Certain COA’s did not ex ist prior to equity developing them (Trusts; (2) Prev ented a CL plaintiff w ho had obtained CL judgment from enforcing the (2) Mere equity in specific property fiduciary duties) whenever there is a breach of fid duty and equity CL judgment (3) Equitable proprietary interest in respect of specific property interv enes it is ex ercising its exclusive jurisdiction (3) If CL judgment in process of being heard – could stop plaintiff from (4) A personal equity (not an equitable interest under definition of Lord (2) Concurrent continuing w ith action Wilberforce in Ainsw orth) Both the CL and Equity hav e a say in the matter (estoppel; mistake;  No directions to courts (Court of Kings Bench, court of ex chequer, court of ASK: Is there an equitable interest? Must be: duress) eg Breach of K – claim specific performance (equity) vs damages common pleas) – only to actual or potential plaintiffs 1. Proprietary (definable; identifiable by 3rd parties; (CL) Courts of CL v Equity : 2. capable of assumption by 3rd parties; have some degree of permanence); (3) Auxiliary  Aim of equity to balance the rights of the tw o indiv iduals before it – fairness or Equity comes in aid of legal rights – equity aids the CL (remedies – specific performance; injunction) aids contract rights  Equity court does not anul CL court judgment – says for reasons personal 3. personal (cannot give away) (satisfied by 1, 2, 3) NOT 4

to y ourself (in personum) it will be inequitable for y ou to enforce that CL debt recognised at CL but not in equity HOWEVER equity will allow CL creditor to judgment – grant an injunction prev enting you invoking CL court remedy Livingstone – executor is not a trustee discov er documents in possession of CL Debtor and therefore obtain proof of the CL  Equity courts in 16th centaury not bound by precedent – now not so Official receiver in bankruptcy v Schultz (accepted Livingstone) Ask lara – divisee and legaty debt. flex ible, and bound by precedent DISCOVERY: embodied in uniform civil procedure rules  Guided by principles (maxims of equity): Competition between equitable interests (1) v (2) Interest: EQUITABLE DAMAGES: o he w ho seeks equity must come with clean hands Statutory concept – Court of Chancellory had no power to award damages for until 1813 there w ere only two judges in courts of chancellery – chancellor and master Latec v Terrigal T gav e registered mortgage over land to Latec. L entered fraudulently into K of sale w ith subsidiary (southern hotels)  SH and L had same board of infringement of CL right. of the rolls in 1813 VC appointed, 1841- tw o more chancellors appointed, and you S 8 Civ il Proceedings Act 2011 QLD – permits award of equitable damages: could appeal a decision directors (No genuine sale). SH obtained registration. - SH gav e equitable charge (cat 1) to MLC (Lender) If court has jurisdiction to hear application for injunction or specific performance, court COMBINATION OF EQUITY AND CL may award damages as well as or instead of injunction or specific performance . JA 1873, 1875 UK – allow ed Court to ex ercise both CL and equitable jurisdictions - Terrigal (M’or) correctly alleged that K of sale w as fraudulent. - HC: because the K of sale w as fraudulent, the registration of SH w as not Nocton v Lord Ashburton in QLD w as carried out by s 4 Judiciature Act 1876, which is now s 244 SCA 1995 Courtt ex ercising equitable jurisdiction can award equitable remedies, eg Equitable (Qld). S 4 prov ided that ev ery judge shall administer law and equity by recognising all indefeasible Competition betw een T(2) and MLC (1) interest – MLC having purchased equitable compensation legal and equitable estates, titles, rights, duties and liabilities in every civil matter Injunction quia timet (because he fears) Casoray v Davis – breach of fidicuiary duty in CL supreme court (NSW) – action failed charge for v alue and w ithout notice of the fraud prev ailed over T’s mere equity. Held by HC: IF someone obtains cat 1, for value and without notice of earlier Eg w all about to collapse, can obtain injunction requiring repair; or Can grant damages because CL SC did not hav e equitable jurisdiction in substitution for the injunction (s 8 CPA), damages will be payable even though Highlight confusion w ith “fusion” when really “combination” equity, the purchaser of cat 1 interest will extinguish the earlier equity. plaintiff doesn’t hav e COA (equitable damages). Now 7(2) CPA – empowered Leeds v Slack Remedial/ Doctrinal Fusion fusion: Equal interests: Rice v Rice – where equities otherwise equal, first in time prevails however Kitto said, did not help Terrigal because equities were NOT HOL – this form of equitable damages can be aw arded under s 2 (embodied in s 8 Remedial: Doesn’t matter if Equitable or CL, put all remedies together and apply CPA QLD). w hichever appropriate otherw ise equal. Obiter of Westbury in Phillips v Phillips applied. (authorities are *We do not hav e remedial fusion in Australia: conflicting) Digital Pulse v Harris Fid relationship, fid duties breached by employees. Breach so bad that remedy sought was exemplary damages (Purpose: to punish) Default of Mortgagor S 78 (2) para c (2) LTA: right of M’ee upon default by M’or to Harris Judgment: forclose the M’ors right to redeem the property (1) Equity does punish: but there hasn’t been a single instance historically where all 184(3)(b) LTA registered interests held subject to other registered interests, except- if equity did w as punish – there may be an element of punishment, but that is not there has been fraud by registered proprietor the sole purpose of that remedy 85(3) PLA if land is not sold w ith reasonable care (M’ee) – M’or may receive damages (2) Principles of fid duties different to those of torts/ contracts – remedies that apply against M’ee 85(1) right to claim damages, NOT where wants to retain land in each area of law hav e to be connected to COAs Counter argument: Canada has exemplary damages for a breach of Fid Duty BUT need to be mindful of jurisdiction (different dev elopment) Mortgagor v Unregistered Purchaser court: ev en though equity came up with fid duties – they didn’t come from nowhere, The law is unclear as to w ho’s interest w ould prevail in a contest betw een the equity took inspiration from other areas of law , what happened in Canada – fid law Mortgagor and an unregistered purchaser. There is currently no binding authority in QLD. dev eloped alongside torts, this has implications, at a doctrinal lev el torts/ equity dev eloped together. In Aus – equity developed alongside contractual principles (no Re Macain’s Caveat – QLD SC – M’or to prev ail over unregistered purchaser ex emp damages) TRUSTS money (had knowledge that R w as holding money on trust for Q – fatal to claim EXPRESS TRUSTS: No univ ersally accepted definition: however, arises where title to property is held for of setoff) (1) Transfer on trust: settlor transfers property to trustee for the benefit of one or the benefit of another or for the promotion of charitable purposes. Types:  Barclay s NOT a constructive trustee – because liable under chose in action that more beneficiaries. Trustee receives property from Settlor, on trust for (1) For the benefit of indiv iduals (natural person or artificial entity): express, R had against B. B could not hold its ow n liability on trust. Beneficiary implied or constructive  Q w on appeal = held primary trust failed, secondary trust arose upon failure to (2) Declaration of trust: settlor declares himself a trustee for a beneficiary /ies (2) For the promotion of charitable purposes pay div idend. Trust for non charitable purpose (exception) – maintenance of pets,  Lord Wilberforce: mutual intention of the parties and essence of the bargain w as Three Certainties (Chief Commissioner of Stamp Duties NSW v Buckwell) construction and maintenance of tomb that the sum should be used for dividents. Consequence being that if money 1. Beneficiaries must be specified CONTRAST CL CONCEPTS FROM TRUSTS could not be paid as div idends, it w ould be returned to Q. 2. Interests must be specified (1) Bailment v Trust  unclear w hy HOL assumed first trust failed – just because failed to pay dividend 3. No pow er is given to any person to v ary either the beneficiaries specified Bailment (CL): Transfer of possession from Bailor to Baliee doesn’t mean trust failed. ‘a breach of trust does not cause that trust to fail” or their specified interests  Bailee obtains no legal or equitable title.  ONG – because equity regards as done that w hich ought to be done, equity STEP ONE: CATEGORISING TRUST  Ev en though CL, Bailee is a fiduciary (Re Hallett) w ould have regarded the express trust for Q as hav ing been terminated upon Parties & Powers Appointer: giv en large powers by trust instrument  Bailment can be made of personal chattel only failure to pay - in fav our of a constructive trust for the shareholders, so that, on  Pow er to select beneficiaries from a class of persons defined by the donor of the  B’ee has obligation to: re-deliv er chattel to B’or; or to another person as directed that date, the shareholders should have become the beneficiaries of a new ly pow er Trust: No transfer of possession or of legal title to the beneficiary of trust. Transfer of formed constructiv e trust , in substitution for the former initial trust.  Sometimes given power to select as well as power to determine amounts legal title to trustee, or declaration of trust by the Settlor.  The shareholders, being the only persons entitled to the benefit from the  Beneficiary becomes equitable owner of the property held on trust for him/her. termination of the ex press defeasible trust created in favour of Q, should have Trust pow ers: can only be given to a trustee, must be exercised, (discretionary trust (ONG) or  Any kind of property can be made subject of trust (ev en choses in action) been giv en the right to enforce termination of that trust. mere pow ers: power which does not hav e to be exercised  Trustee legal ow ner, no obligation to deliv er or redeliver property  pending the actual termination of that trust, w hich would have occurred only w hen R paid its shareholders, R should have been held to have been a  can be giv en to trustee or non trustee (Lord Reid in Gouldbankin)  Trust can be enforced only by beneficiary, unless settlor has reserved to himself object: no proprietary interest (Kennan v Spry) a pow er to enforce constructiv e trustee of the proceeds of the cheque (and the subsequent CIA against the bank) for the shareholders as from 24 july 1964. Object cannot assign interest – so not proprietary (NPB v Ainsworth); Gardside v IRC (2) Debt v Trust S79 Family Law Act for this purpose only object DOES have proprietary interest Debt: Created whenever one person (D’or) comes under CL obligation to pay another (3) Trust v Agency (Kennan v Spry) Eg – trust for A’s children in equal shares person (Creditor) a specific sum of money.  Money in Bank = Bank owes common law debt Foley v Hill Agency: Principal gives authority to agent to act on their behalf Agency is terminated by death of agent or principal Powers of appointment: In case of Bankruptcy: (1) General  unsecured creditors of debtor can claim rateable proportion of w hat is owed to Trust: Trustee is the principal, therefore cannot be agent also Trust is not terminated by death of trustee or beneficiaries Court will appoint new, if  pow er to appoint property to any person or any number of persons in the world, the creditors (s108 Bankruptcy Act 1966 Cth) trust instrument doesn’t authorise new appointer including donee (no restrictions as to objects)  s116(2)(a) Bankruptcy Act – (applies to trustee to protect trust property )  Alw ays a mere power – never an obligation to ex ercise ow nership vests in trustee Q. When an agent receiv es money in course of agency, does agent account for that (2) Special In the case of company insolvency money to the principal as a trustee or as a debtor? (maybe bailee also)  appoint to any one or more persons from a class of persons designated by donor  (s555 Corps Act 2001) creditor can enforce security interest despite bankruptcy No Precise formula* of pow er (s58(5) Bankruptcy Act)  May be mere power or trust power (depending on obligation to ex ercise) Re Kayford – mail order company – send payment – then goods dispatched. Customer Walker v Corboy company was agent for farmers, would sell farm produce and farmers (3) Hy brid/ intermediate paid money , but money didn’t go into general account. Money was paid into a trust w ould receive the proceeds of sale. Company became insolvent, issue was whether  elements of general and special – appoint to any one or more person in the deposit account (knew they were going to be insolvent) proceeds received as a mere debtor OR whether company was to account as trustee? w orld, except specified person or class or persons  After dispatching the goods, would take the relevant amount from the trust HELD: company was to account as debtor only – farmers could only get proportion of  Trustee of hy brid power is necessarily outside the class of appointable persons, account. Company later went into liquidation w hat company owed them unless the pow er of appointment expressly authorises. reason: trustee is a  Issue: w ho owned the money in trust deposit account? Reasons: fiduciary and can never use powers to benefit self w ithout consent of trust  Crucial to decide w hether declaration or received money on trust – if had of 1. Statute did not require agent to open trust accounts for farmers  Mere pow er or trust power declared itself, w ould mean company owned the money then made itself trustee, 2. Inefficient to hav e so many trusts operated by the agent (100-150 farmers) farmers (4) Testamentary (conferred by will) transfer the company would never had owned w ould v ary from month to month Horon v James – testamentary hybrid trust  Important because pt 5.7B of corps Act (v oidable transaction) Justice Clark – presumption if one off transaction, then by way of trust, but if (5) Interv iv os (between the living)  Held: company received money for trustee and therefore customers were continuing business relationship then presumption is by way of debt. Re Manisty’s Settlement – intervivos, hybrid, mere power equitable ow ners Re Brock Bank –beneficiaries cannot give directions to trustee (because T is principal) Barclay’s Bank Ltd v Rolls Razor STEP TWO: THREE CERTAINTIES RR declared dividend, had no cash so borrowed money from Q to pay (4) Trust v Contract Three Certainties (Applied Trust) (Knight v Knight) NOT constructive trusts  Q said w e know you aren’t financially sound and we don’t w ant our money to go Contract: binding agreement betw een tw o or more parties, with consideration or made 1. Certainty of intention to create trust to w aste – so said I w ill loan money, provided you receive the money on trust to under seal 2. Certainty of subject matter pay the shareholders (primary trust)  Benefit of contract (NOT burden) may be held in trust (Lloyds v Harper) 3. Certainty of objects (beneficiaries)  RR paid money into special account with Barclay’s Bank  asset is property but liability is not property  RR became insolvent – Q tried to claim money back under secondary trust. B (1) Certainty of Intention: said this w as simply a debt, and because debt – B said it w anted a set off. HOL – language must be imperativ e (Lambe v Eames) Estator left estate to w idow “to be at B could not set off or combine, because could not prove the money was R’s her disposal in anyway she think best for the benefit of herself and her family ” NO TRUST as words were not imperative and did not impose any obligation on her. the pow er a special dictionary meaning. (for those ordinarily uncertain words that w ould  Held: ex press trust will continue and after disclaimer the settlor will be the new imperative language is essential to creation of express trust render the w ords certain for the purpose of identify ing the class of potential trustee for the beneficiary Re Williams beneficiaries of the ex ercise of the pow er).  A settlor cannot revoke a trust unless the power of revocation is reserved Estator left residue of estate to w idow “in the fullest confidence that she w ill carry out “my old friends” prima facie uncertain – however if there is ev idence that the estator to the settlor my wishes in the following particulars” held: NO TRUST had a special dictionary meaning for them (eg old friends w ho went on holiday) Settlor if w ants to change his mind, must reserve power of rev ocation. Commissioner of Stamp Duties v Jolliffe (overruled) Absent such a pow er, settlor cannot revoke trust HC said: w e know of no authority and none was sighted which would justify us in Perpetuity Period: cannot exceed 80 years s 209(1) PLA  Trust never fails for lack of a trustee deciding that by using any form of w ords a trust can be created contrary to the real If Uncertainty: law unclear, two possibilities: Making a Gift: intention of the person alleged to hav e created it. (need real intention) 1. Entire clause fails For a gift to be acknow ledged in equity, steps must be taken to complete the gift Burnes v Kendle: 2. Ex ception being meaningless would fail – leav ing rest of clause valid. Milroy v Lord (still good law ) Medley purported to transfer company shares by deed to ov erruled Jolliffe in AUS. HC said there would be an intention to create a trust if an “w ould be same as “except… NOTHING” (Horin v James) Lord, to hold in trust for Mrs Milroy . objective observer/ reasonable person would conclude that there was an  Trust failed: because deed was the wrong method of transferring company intention to create a trust (declaration or transfer) West v Westinger test: certainty of objects will be satisfied if w ithin a reasonable time shares. Correct method of transfer of shares by gift w ould have been to ex ecute  Therefore, intention need only satisfy reasonable person test after gift comes into effect, the court can be satisfied on BOP that substantial majority a memorandum of transfer and to register that memorandum. Transfer VOID (2) Certainty of Subject Matter of beneficiaries have been ascertained, and no reasonable inquiries could be made  Mrs Milroy was volunteer (no valuable consideration) so could not compel Palmer v Simmons the “bulk of my estate” UNCERTAIN which would improve the situation. (Young) medley to transfer shares on trust for her. Strange v Bernard “for his sole use” provided that at his death, remainder be divided  Div ided equally between persons who attended his funeral except family  Lord had pow er of attorney to transfer shares – but did not authorise to transfer UNCERTAIN DEFECTS in Young’s reasoning: shares to himself as trustee for Milroy. Medley did not declare himself trustee Hunter v Moss (May or may not be good law in Aus) (1) impossible to hav e substantial majority of unknown number  Trust failed because had no subject matter. Def declared himself trustee of 50 of 950 identical company shares, then tried to (2) Test should apply to reference of time when instrument took effect, not  For period of 3 y ears, on mistaken assumption that there w as valid trust. Medley repudiate and said failed for uncertainty because had not specified shares by serial w hen gift came in to effect (RO of shares) paid the div idends received by him to Mrs Milroy numbers (3) y oung disregarded direction to all the members of the class  Div idends were bank notes – held to be personal chattels: and although Medley  ENG CA rejected Defendants argument – they were identical w as NOT the beneficiary, Milroy nevertheless became owner of dividends in Prosper v Wostovic – justice Wilson: trenchantly criticised  AUS– uncertain, ONG not convinced because separate serial numbers – needed form of bank notes paid to her by Medley Dalton – to testamentary trust powers and testamentary mere powers – can now apply to know which formed subject matter  HELD: medley made a gift of div idends to Milroy criteria certainty test as a result of s 33R  if w ould have been valid during testator’s (3) Certainty of Objects Three Methods of Making a gift: Court needs to know in whose favour it should decree performance of trust (Morris v lifetime, w ill be v alid testamentary (will) (1) Transfer title to donee (no trust) Bishop of Duram) – purported trust power to appoint (to such objects that the bishop Conditional Constructive Trust arise in fav our of purchaser in case of a specifically enforceable contract to transfer (2) Settlor to trustee (ex press trust) to beneficiary shall most approv e of) – benev olence did not hav e any technical meaning. (3) Settlor/ trustee to beneficiary (express trust) property (land) if property not land, then will have to be very rare or unique for equity to List Certainty: enforce K of sale Fixed trusts: traditional view is that you have to satisfy list certainty – court must have Medley intended to create express trust by using method two. failed because did not the ability to compile a complete list of the objects or beneficiaries of the fix ed trust. (1) created at time of specifically enforceable K (2) if at time of completion of sale, purchaser is not able to pay balance, then carry out the method. LJ Turner – having failed to carry out steps in method 2, court (ONG agrees) West v Western test: ALSO assess whether meets: CC (law inclear) w ould not attribute an intention to create trust by method three (by making himself constructiv e trust is retrospectively negated descentants of Great Grand Parents - FAILED trustee)  therefore transfer occurred under method 1. (3) if pay s balance – then constructive trust in fav our of purchaser will be Criterion Certainty: GIFT OF LEGAL TITLE TO A PERSONAL CHATTEL 1. Currently applies to mere powers and trust powers (Golbanchian) In Macphale v unconditional (Chang v Registrar of Titles) VOLUNTARY TRUSTS Cochrane v Moore Dolton (HoL) established, CC will be met if if it can be said w ith certainty that any Held: one can make a gift of legal title to personal chattel in one of two ways: Voluntary trust: created without provision of v aluable consideration to settlor person is or is not a member of the class. no need for a complete list of members (1) By delivery of the personal chattel to the intended done with the intention Voluntary transfer of legal title: by way of gift of the class (Proof on a balance of probabilities) of passing title in the personal chattel to the intended donee (method used Baden No 2 ‘I intend to make an immediate gift to y ou’ = not enforceable at CL, but may be in equity (Norman v FCT). An intention to make a gift in the future/ mere v oluntary by Medley)  each judge had distinctiv e reasoning for deciding ‘relatives’ was sufficiently  actual or constructiv e delivery (attornment), or Bailor to transfer chattel promise to create a trust is not enforceable in equity , however, as equity will not assist certain. NO Ratio- unsatisfactory to third party , can instruct bailee to recognise third party as the new owner a v olunteer and complete an incomplete gift. s 6 Status of Children Act prohibits discrimination of children born out of w edlock, of the personal chattel.  CL consideration can be dispensed with by K under seal (Deed) HOWEVER the therefore class of persons relatives is now widened. Attornment: deed in equity does NOT replace valuable consideration  33R succession Act ex tends criterion certainty test from intervivos sphere to 1. Instruction to bailee to attorn  Agreement to buy car – for $1, equity would say not v aluable consideration in testamentary sphere 2. An attornment by the bailee pursuant to that instruction 2. Linguistic or semantic uncertainty then ask whether evidential uncertainty. relation to 33R/ Rolls Royce the amount $1 is not pecuniarily significant, but CL (2) Execution of deed of gift and delivery of that deed of gift w ould accept Horin v James IS THERE AN EFFECTIVE GIFT? 3. If Evidential uncertainty: Lord Wilberforce: gift not rendered v oid, because Middleton v Pollock Trust is complete before the beneficiaries have been informed of The law is uncertain as to what words are required to create a trust. There is no trustees could apply to court to resolve the uncertainty (but can be fatal if court its creation formula to be used, but the court w ould look to the w ords uttered in context to couldn’t resolv e) (disputed by Horin v James) – therefore if also ev identially Paul v Paul Voluntary trusts are enforceable and may be enforced by beneficiary under determine w hether declaration as trust. You may but DO NOT HAVE To use words “I the trust uncertain = inv alid declare my self as trustee (Paul v Constance) Look for Special meaning: Re Gulbenkians Settlements – if the w ords used by the Mallot v Wilson Jones v Lock man walked into kitchen with wife and baby. Waved check payable to donor of a pow er to describe a class of potential beneficiaries are uncertain, then the Ex press trust: Settlor transferred to trustee for the benefit of beneficiary , baby and said ‘look you here, I give this to baby, and pressed the cheque into one of purported creation of the pow er will fail by reason of the uncertainty of the posited  If trustee doesn’t w ant to be trustee may disclaim trust by deed – legal title w ill the baby ’s hands’, wife said take it away or baby might tear it. Man retrieved the objects unless there is proof that the donor had, at the time of the purported creation of rev est in settlor cheque and put it into safe, and during his lifetime he did not cash the cheque. Upon his death the ex ecutor cashed the cheque (2) The intended donee must hav e authority to use the cert of title for the purpose of  An entire CL chose in action may not be orally assigned by way of gift ISSUE: did action amount to a declaration of trust for the baby ? Held: registering the memorandum of transfer. either at law or in equity (Olsson v Dyson) (1) No intention to transfer cheque to infant son – because did not endorse the RESULT = complete gift in equity of torrens title land  A part of a CL chose in action may be assigned in equity orally, even by cheque to son, actions were purely symbolic NO TRUST w ay of gift (Obiter in Norman v FCT; obiter in Sheppard v FCT) Man treated cheque as for son - Today, if the facts w ere to reoccur the court might Corin v Patton- no effectiv e gift because Mrs P had not authorised the mortgagee bank  Assignment made under 199 PLA takes effect subject to equities – ev en if w ell say the man had created a trust of the cheque to release the certificate of title to Mr C. ALSO unclear whether the solicitor with Mrs P to take assignment of entire CL chose in action, for v alue, one cannot rely Richards v Delbridge Grandfather (D) and grandson (R) had taken the mem of transfer as agent for C or P. If agent for P, then Mr C w ould not on defence of bona fide purchaser of legal estate. Because 199 makes it D had shop lease and stock and trade (personal chattels), D w anted to give the shop hav e obtained ow nership of the memorandum of transfer. Not necessary to decide clear that assignment takes effect subject to equities taking property over lease and stock/trade to R. D purported to make an assignment of the lease, and the because purported gift failed – because not authorised to use cert of title right of assignee. stock and trade by endorsing on the deed of lease “this deed and all there to belonging I giv e to R, from this time forth, w ith all the stock and trade” ISSUE OF CIRCULARITY OF OBLIGATIONS Transfer of company shares: D w as lazy – didn’t ex ecute a deed of transfer in fav our of grandson – instead he X cannot assign/ transfer their interest to Y to be held for their benefit. This is because 1070A (3)(b) Corps Act – subject to company’s constitution, equitable interests in ineffectually endorsed on deed of lease, the above words. No effectiv e transfer of lease such an assignment/transfer would create a circularity of obligations, and any attempt shares may be created, dealt w ith and enforced as in the case of personal property. or personal chattels (stock/trade) by Y to enforce the subtrust against X w ould immediately be defeated by Y enforcing  Tw o methods outline in Cochrane v Moore were not followed the trust against X (Corin v Patton)  R claimed against D’s executor that D had declared himself trustee. R did not If interest creating circularity transferred at a later date: Exceptions to Rule that Gift must be completely constituted: claim transfer (no transfer by deed) – endorsement on deed is not himself a deed Eg. A declares trust for B. At later stage B declares himself trustee for A (purported Exception from Strong v Bird:  Rely ing on judgment of Milroy held: D had intended transfer, had NOT intended declaration of sub trust) (1) Testator in his lifetime purported to make immediate gift of specific property to to declare himself trustee. In Crichton v Chrighton B’s conduct would amount to a release of interest back to A. another person  Therefore: George Jessel said: D intended to use method one, failed, and the (making A once more absolute owner) (2) Because of failure to comply with formalities for making of gift, the purported gift court w ould not impute to the grandfather intention to use method three (make  in chrichton – B did not purport to declare sub trust – purported to w aiv e his did not take effect during testator’s lifetime himself trustee) NO TRUST rights against A. Held: the w aiver would be construed as release. (3) Up to time of his death, testator continued to treat gift as being effectiv ely made Paul v Constance UK (may or may not be good law in Aus)  Both w aiv er and declaration of sub trust to be construed as release, if done in (4) Testator appointed intended donee as sole ex ecutor or one of several executors  (defacto couple) Mr C had bank account in his name only, contained 950 tw o stages. of his deceased estate. pounds. Mrs P had authority to w ithdraw money from account, but w as NOT a Re Schar – disclaimer was construed as a release – Court will interpret statement in land included (Benjamin) joint ow ner of bank account. Mr C and Mrs P would pay joint bingo winnings into accordance with intention. Tw o: Donation Mortis Causa that account. Costin v Costin NSWCA said: the intended donee needs to have the cert of title (1) Gift made in contemplation of donor’s death and  Withdraw al of 150 pounds. Mr C and Mrs P regarded money as jointly owned released to him, or released to someone else to hold on his behalf. Mere authority to (2) conditional to such, and  Mr C had said to Mrs P “the money is as much yours as mine” on several use the cert of title is not sufficient. ONG – this isn’t consistent w ith Corrin v Patton / s (3) there is actual or constructiv e delivery of the subject matter of the gift to the occasions 200 PLA intended donee.  C died, P claimed against the w idow one half of the balance in the account, on In Aus Land is ex cluded (Bayliss v Public Trustee) In England it is ok: Senn v Headley the basis that he had declared trust in money over account, for Mrs Paul GIFTS OF PRESENT PROPERTY ONLY  English CA – upheld claim. The words “is as much yours as mine” was You can make a gift of present property only (Williams v CIR) WRITING REQUIREMENTS FOR DISPOSITIONS sufficient to constitute a declaration of trust Williams Purported to assign 500 pounds of income (first 500 pounds that w ould Prior to w riting requirements, two mischiefs: Follow ed: Richards v Delbridge no need to use words “I declare myself trustee” but receiv e) to asignees for a period of 4 y ears. For each four y ears, would assign first 500 (1) People w ho entered into trans denied that they ev er occurred – lack of doing something equiv alent would suffice pounds from trust. HELD: Williams failed to assign income because not certain whether w ritten ev idence Distinguish Jones v Lock – “I give you baby” trust w ould hav e produced income in each of the 4 y ears. Therefore, the first 500 (2) People falsely alleged had entered into oral contracts  Defect in reasoning: court did not identify commencement date of trust. ONG – pounds of income w as future property. As a result, the UK Statute of Frauds 1677 w as developed, however applied to certain trust w as created the first time that Mr Constance said “the money is as much HOWEVER: If to assign future property for v alue receivedThen valid (Norman, Tailby, trans only . This was renacted in Property Law Act 1974 (Qld) ss 11, 12, 59 Re Lind) y ours as it is mine”  S10 (1) PLA no assurance of land shall be v alid to pass an interest at law unless

Gift of Torrens Title Land made by deed or in w riting, signed (transfer or creation of legal title) Assignments of Present property by way of gift are v alid in equity (Shepherd) For gift to be recognised at law , must register ownership  Testamentary dispositions s 10 succession act (wills) Land Title Act (1994) (Qld) ss 60, 62, 181, 182. assigned 90% of contractual right to roy alties for period of 3 y ears  S 176 LTA: a registered instrument operates as a deed

42(1) LTA registrar must issue cert of title if asked in w riting to do so by registered Assignment of Choses in Action ow ner (2) if subject to mortgage, may issue cert only if mortgagee consents. PROPERTY LAW ACT: S 199 PLA – enables legal and equitable choses in action to be assigned provided 4 Corin v Patton Disposition of interest in land conditions satisfied (p10 materials)  Mr & Mrs Patton, joint tennants of torrens title land. Right of surv ivorship 11(1)(a) PLA no interest in land can be created or disposed of except by writing signed (1) Absolute assignment (Tancred) Joint judgment of CJ Mason & J McHugh – approached case in 2 stages by the person creating or conveying the same, or by the person's agent lawfully (2) Must be of the entire chose in action, not of merely a part (Re Steele Wing) (1) Dealt generally with the making of a gift in equity authorised in w riting, or by will, or by operation of law (constructive trust); and (3) Must be made in w riting and signed by assignor  applies only to interest in land (2) Applied stage 1 reasoning specifically to the making of a gift of Torrens (4) Ex press written notice of w ritten assignment must be given to the debtor or title land in equity  interest must be created or disposed of BY WRITING - ev idenced not sufficient other person liable under the chose in action STAGE 1: requirement for making of gift of torrens title land in equity :  instrument must be signed by the person creating or disposing of the interest or Takes effect from date of giv ing notice to person liable under chose in action. Mason and McHugh rejected view from Brunker v Perpetual Trustee – that mere by agent  if this is not done then purported creation takes effect only as an Notice under s 199PLA need not be giv en to assignee MUST be given to debtor interest at w ill = interest that can be terminated w ith the giv ing of reasonable ow nership of registerable memorandum of transfer w ould give donee statutory right to (liable person) (Grey v Aus Motorists) be registered. HELD, (approv ing Cope v Keene) for gift to be effectiv e, donor must: notice. NOT a proprietary interest Ainsworth

(1) Giv e the intended donee ow nership of the memorandum of transfer; and Disposition of Equitable interest in Land