Constructive Trust Constitution

There are two possible methods through which an express intervivos trust can
be created. By declaring himself as trustee of a trust, a settlor can create an
express trust. Secondly, he can appoint a third party to act as trustee, which
will formally establish the trust by making that person the owner of the trust
assets. An express trust can be created by self-declaration if the settlor
declares himself to be the trustee of the trust and the nature of the trust assets
will determine how they are distributed. Personal property, real estate, stocks
and shares, and financial investments are all examples of things that might be
held in trust. Legal ownership can be transferred through deeds or the settlor's
voluntarily relinquishing possession. Legal ownership of shares can be
transferred electronically in publicly traded firms, but in privately held
organizations, it must be recorded in the company's members' register (Milroy v
Lord). With a deed and an entry for registered land in the title register, a settlor
can transfer legal ownership of unregistered land in line with the Land
Registration Act of 2002. Legal title must be transferred to a third party trustee
within the settlor's lifetime for the transfer to be lawful.
When the legal ownership of the Trust has been transferred to an independent
trustee the trust has reached its "full in equity" status and can be legally
enforced by all of the trust's beneficiaries. However, the trust will not be
fulfilled and a voluntary beneficiary will not be able to enforce the conditions of
the trust if the settlor does not transfer legal title to the trustee during his
lifetime and this can be seen in the case of Milroy v Lord. The maxims "Equity
does not help a volunteer" and "Equity does not perfect, imperfect gifts"
illustrate this point. A willing beneficiary can obtain equity assistance once the
trust has been fully constituted. The standards of equity have recently been
amended to be more hospitable to volunteers, and special conditions have been
formed for cases where the settlor failed to transfer legal ownership to a third
party trustee before his death.
Some examples of such exceptions are the property estoppel doctrine, the
Strong v. Bird rule, the Re Ralli Wills Trusts principle, the Donatio Mortis
Causa principle, and the unconscionability exception in Pennington v. Waine. If
the settlor did everything necessary during his lifetime to transfer legal
ownership to the third-party trustee, then the trust will be considered complete
in equity even if the legal ownership has not yet been transferred to the third-
party trustee after the settlor's death. This is according to the decision made by
the court in Re Rose & Mascall v. Mascall. Legal ownership can be transferred
if the settlor takes all necessary steps during his lifetime, as determined by the
court. As the third-party trustee will continue indefinitely and will be able to
complete the necessary processes to transfer legal ownership to himself, the
rule established in Milroy v. Lord can be interpreted more broadly. At Re Rose,
a solid relationship of trust was built. The court attributed the issue to the
absence of "common sense" regulations. The Court of Appeal distinguished Re
Rose from Milroy v. Lord, pointing out that the settlor in Milroy had not taken
all necessary steps to ensure that the property was transferred effectively. In
Re Rose, the Court of Appeal made a clear distinction between themselves and
Milroy v. Lord.
If the settlor has taken efforts to execute the transfer but those procedures are
unable to effectively complete the transfer, the precedent established in Re
Rose does not apply, as decided in Re Fry. Pennington v. Waine is another case
where the COA found an exemption to the Milroy v. Lord rule, holding that the
settlor need not complete all of the formalities for an effective transfer during
his lifetime. This was a recognition of a deviation from the precedent set by
Milroy v. Lord. Previous rulings, including the one in Rose & Mascall v.
Mascall, have been called into question as a result of this case. Even if the
settlor hasn't done everything that's required to complete the transfer, the trust
will be complete in equity under the ruling in Pennington v. Waine. It would be
very unacceptable for him to change his mind about the trust under these
conditions. If the settlor gave the beneficiary an undertaking and then received
anything of value from the beneficiary in exchange for the undertaking, it
would be immoral for the settlor to later alter his mind. To my knowledge,
however, not a single judge or other member of the court was aware that this
was in fact the case in Milroy v. Lord. Pennington v. Waine has not been widely
implemented after the ruling. In the unrelated case of Zeital v. Kaye, the Court
of Appeal rejected an initial finding that a transfer had occurred since the
claimed transferor had failed to meet all of his obligations.
The Pennington v. Waine decision has been criticized because it is widely
believed that it breaks the rule that equity will not step in to force a person to
volunteer or to make an imperfect gift perfect. The unconscionability test also
introduces doubt about who will ultimately benefit from the beneficial interest,
which is necessary for legal, tax, and other purposes. Nevertheless, Harold may
have won Pennington v. Waine due to the legal principle of proprietary
estoppel. Harold had done something bad, but he rationalized it by saying he
believed a promise that he would receive the necessary qualification shares.
Notwithstanding this, no argument based on estoppel was presented to the
Court of Appeal. Pennington was founded on the idea of proprietary estoppel,
and it was used when a donee had acted irresponsibly under the false
impression that they had received a valid gift. Curtis v. Pulbrook is where this
issue was litigated.
Equity has also developed the ability to recognize and account for a "special
case" known as negative reliance (proprietary estoppel). The court has the
authority to complete an unfinished gift or trust when there has been adverse
reliance. The Turner, Llewelyn, and Dillwyn cases are examples of this type.
When the proper procedures for transferring property have not been followed, a
legal principle known as "property estoppel" can be invoked to allow for the
informal establishment of property rights. The overuse of formality can be
mitigated by adhering to this concept. The doctrine of proprietary estoppel
exists in the law. In Taylor Fashions Ltd. v. Liverpool, Lord Oliver described
how estoppel equity is established in the modern day. If a plaintiff can show
that they were given a guarantee (a representation), that they reasonably relied
on that promise, and that they were harmed as a result, then the plaintiff will
have shown estoppel equity.
One other outlier that equity will allow is the precedent established in Strong v.
Bird and subsequently utilized in Re Stewart. Even though the settlor did not
consummate the trust during his or her lifetime, it will become full in equity if
the trustee or principal donee becomes the executor or administrator (Re
James) of the trust property after the settlor's death, as established in Strong v.
Bird and Re Stewart. Such a present ought to live on long after its donor has
done so. Re If the trustee inadvertently gets legal control of the trust's assets,
the trust will be treated as fully created under another section of Ralli Wills
Trusts. Buckley J. argues that the claimant's possession of the funds is
irrelevant because he is named as the estate's trustee in the will. The legal
definition of his ownership of the money makes no reference to the
circumstances under which he acquired it.
The Choithram v. Pagarani ruling states that the court's use of a volunteer to
help decide the case has resulted in significant changes to the standards of
legally allowed forms of disposal. The ruling took these developments into
account. Prior to the Pagarani case, it was obvious that a self-declared trust
could not be understood if it had been created through a transfer but carried
out using an inefficient means of transfer. LJ Turner elaborated on this point
at length in Milroy v. Lord, and the principle was later used in Richards v.
Delbridge. Choithram is an outlier since the facts do not conform to either of
the two standard ways in which an intervivos trust might be established. The
settlor was also a trustee in this case, and he or she did not transfer legal
ownership to the other trustees when the trust was created. If one trustee in a
group of trustees holds title to trust property, the court has ruled that he must
comply with the trust's rules and transfer the property into the names of all
trustees. When the settlor is also the trustee of a trust, the use of pagarani has
the effect of making the trust effective as a declaration. This is the case when
the person declaring the trust is also its trustee. But, the other trustees are
never given any ownership rights. Donatio Mortis Causa ranks dead last, but
that doesn't mean it's not impressive. When a gift is made with the donor's
death in mind and is conditional on the donor's death, it is called a donatio
mortis causa. The conditions for applying the rule were laid out in the case of
Cain v. Moon.
King v. Dubrey mandates that these conditions be met exactly. This comment
was made by Lord Brown Wilkinson in the Pagarani case, which reflected a
more modern judicial outlook. As the example shown, equity will not back a
volunteer but will also not work to undermine a trust.