Week 4:Disposition of Property in Law and Equity II -â Equity won't ...
Week 4:Disposition of Property in Law and Equity II -‐ -‐ -‐ -‐ -‐
Equity won’t assist a volunteer Mortus causa- contemplation not expectation of death Equity seeks to do what ought to have been done Schultz, Latek, Livingston, Horton Rule in Schultz: right of beneficiary in unadministered estate will vest in the official receiver in case of beneficiary being undischarged bankrupt. Bc chose in action usually a debt.
Assignments in Equity: (also see chart) -‐
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If you create equitable interest out of property & declare yourself trustee, its not disposition of a subsisting equitable interest it’s creation of new equitable interest. Livingstone: if you own property outright, there’s no differentiation between legal & equitable interest you simply own property outright. Must ask Q as to whether assignment is for consideration or not. If for consideration, equity recognises & enforces it. If consideration is given, conscience of assignor is bound & equity will hold him bound by assignment. If you’ve sold a debt & haven’t complied with s12, there will be an effective equitable assignment of it if consideration has been given. Requirement of writing for land under s23C(1)(a)
Equitable Assignment of Equitable Property: -‐
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Voluntary assignments of equitable property must be absolute + doesn’t require consideration Kekewich v Manning. But, if not absolute, its invalid unless made for consideration Re Earl of Lucan. Apart from statutory rq of writing, all that’s required for equitable assignment of equitable property is a clear expression of an intention to make an immediate disposition Norman v FCT. Legislation required assignments of equitable int or trust subsisting at the time of assignment to be in writing (s23C(1)(c. Where assigning whole equitable chose in action, equitable assignee is entitled to sue in his own name without joining assignor as bc of assignment the assignor retains no interest in the property.
Statutory Requirements: 23C(1):
Pascoe v Burnch- purpose for writing reqs in s23C(1)(c) to prevent hidden oral transactions relating to equitable ints & enable trustee to ascertain who beneficiaries of trust are.
23C(c) disposition of an equitable interest or trust subsisting at time of disposition must be in writing signed by person disposing of the same or by person’s will or by person’s agent thereunto lawfully authorised in writing. Section applies to both realty & personalty PT Ltd v Maradona Pty LTd. -‐ -‐ -‐ -‐ -‐ -‐ -‐
Req of writing can be in more than 1 doc provided that they’re interconnecting with each other 23C(1)(b) doesn’t require trust of land to be created in writing, all it requires is evidence to show there’s been a declaration of trust of land With disposition in relation to creation of an interest pursuant to s23C1(a) disposition itself MUST be in writing. S231(c) disposition must be in writing as opposed to evidenced in writing. S23C1(a) and C1(b) apply only to land. Do not apply to personal property. S23C(1)(c)- disposition of a subsisting equitable interest NOT JUST LAND. Therefore applies to interest in land and personalty. S23C(2) This section does not affect the creation or operation of resulting, implied or constructive trusts.
Three forms of dispositions: (timsons case) focus on Personal Property 23C1(c): Disposition by means of a direction by a beneficiary to trustee: Directions can take one of two forms.: First: illustrated by Grey v Inland Revenue Commissioner- Concerned beneficiary under trust who told trustee to hold his equitable int on trust for a 3rd party. A holds on trust for B. B gives direction to A to hold on trust for C. Case concerned oral declaration by B telling A to hold property on trust for C. Paperwork executed to confirm oral direction. Issue dealt with liability to pay stamp duty over assigned shares (ad velorum stamp duty (varies on value of property being exchanged.)) If oral direction was effective to dispose of beneficial interest in favour of C, then it was oral direction that disposed of property & later written docs were mere confirmation of agreement. Paperwork would have only attracted nominal stamp duty. If oral not effective, disposition would have occurred by virtue of written docs & would have attracted ad velorum stamp duty. Oral direction deemed ineffective according to 23C(1)(c) as dispositions must be written. If direction had related to trust of real property not personalty, compliance with this legislation still necessary but also could note that transaction would have been caught by s23C(1)(a) relating to land.
Second: Demonstrated by Vandervell v IRC- whether tax is paid in relation to a particular transaction. Personal property, A holds shares on trust for B. B gives direction to A to transfer legal title as well as equitable to C so C owns it outright. Q is if oral direction was effective or if later documentation attracts tax. Held oral direction was effective to dispose of B’s equitable interest. Despite this being disposition of subsisting equitable int, held s23C1(c) doesn’t apply in this case or circumstances where direction by B to trustee relates to both legal & equitable int - s23C1(c) only applies when dealing with equitable int alone. Oral direction is effective & writing doesn’t attract tax. Said that direction by beneficiary achieved same result as if there’d been no separation of legal & equitable interests. Disposition not equitable int alone but entire estate & accordingly s23(1)(c) is irrelevant. If Vandervell had involved property, wouldn’t be relevant to this section but rather to s23C(1)(a). What if equivalent of B dies before direction to trustee was carried out? Lord Wilberforce says death would have no effect HOWEVER, in Parker and Parker v Lyncham held that death of B before anything is done to carry out instructions would revoke the direction entirely.’ Disposition by means of an agreement to assign: -‐ -‐
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By way of contract to assign an equitable interest Utrid v IRC (payment of stamp duty)- If beneficiary of shares enters into contract to assign shares to a purchaser for valuable consideration, if there’s oral contract is it effective? Or, will subsequent documentation be an instrument that attracts ad velorum stamp duty- it will if earlier contract is ineffective. S23(1)C either applied or stamp duty was required nonetheless. Radcliffe says: oral contract effective- While this is disposition of a subsisting equitable int as contract to assign equitable int, s23C(1)(c) didn’t apply bc of s23C(2). “this section does not affect the creation… of a constructive trust.” He was endorsed as correct legal analysis. When you enter into contract to sell property, vendor becomes constructive trustee of property for purchaser. Constructive trust lasts until property has been fully transferred to purchaser. Neville v Wilson- shares held on trust for N, shareholders in company oral agreed to liquidate N & divide equitable interests of shares among holders. Oral contract to assign equitable interest in personal property is effective- doesn’t need to be in writing as s23C(2) trumps s23C(1)(c). For equitable interests in land, s23C(2) would still trump s23C(1)(c).
Equity won’t assist a volunteer Mortus causa- contemplation not expectation of death Equity seeks to do what ought to have been done Schultz, Latek, Livingston, Horton Rule in Schultz: right of beneficiary in unadministered estate will vest in the official receiver in case of beneficiary being undischarged bankrupt. Bc chose in action usually a debt.
Assignments in Equity: (also see chart) -‐
-‐ -‐
-‐ -‐
If you create equitable interest out of property & declare yourself trustee, its not disposition of a subsisting equitable interest it’s creation of new equitable interest. Livingstone: if you own property outright, there’s no differentiation between legal & equitable interest you simply own property outright. Must ask Q as to whether assignment is for consideration or not. If for consideration, equity recognises & enforces it. If consideration is given, conscience of assignor is bound & equity will hold him bound by assignment. If you’ve sold a debt & haven’t complied with s12, there will be an effective equitable assignment of it if consideration has been given. Requirement of writing for land under s23C(1)(a)
Equitable Assignment of Equitable Property: -‐
-‐
-‐ -‐
Voluntary assignments of equitable property must be absolute + doesn’t require consideration Kekewich v Manning. But, if not absolute, its invalid unless made for consideration Re Earl of Lucan. Apart from statutory rq of writing, all that’s required for equitable assignment of equitable property is a clear expression of an intention to make an immediate disposition Norman v FCT. Legislation required assignments of equitable int or trust subsisting at the time of assignment to be in writing (s23C(1)(c. Where assigning whole equitable chose in action, equitable assignee is entitled to sue in his own name without joining assignor as bc of assignment the assignor retains no interest in the property.
Statutory Requirements: 23C(1):
Pascoe v Burnch- purpose for writing reqs in s23C(1)(c) to prevent hidden oral transactions relating to equitable ints & enable trustee to ascertain who beneficiaries of trust are.
23C(c) disposition of an equitable interest or trust subsisting at time of disposition must be in writing signed by person disposing of the same or by person’s will or by person’s agent thereunto lawfully authorised in writing. Section applies to both realty & personalty PT Ltd v Maradona Pty LTd. -‐ -‐ -‐ -‐ -‐ -‐ -‐
Req of writing can be in more than 1 doc provided that they’re interconnecting with each other 23C(1)(b) doesn’t require trust of land to be created in writing, all it requires is evidence to show there’s been a declaration of trust of land With disposition in relation to creation of an interest pursuant to s23C1(a) disposition itself MUST be in writing. S231(c) disposition must be in writing as opposed to evidenced in writing. S23C1(a) and C1(b) apply only to land. Do not apply to personal property. S23C(1)(c)- disposition of a subsisting equitable interest NOT JUST LAND. Therefore applies to interest in land and personalty. S23C(2) This section does not affect the creation or operation of resulting, implied or constructive trusts.
Three forms of dispositions: (timsons case) focus on Personal Property 23C1(c): Disposition by means of a direction by a beneficiary to trustee: Directions can take one of two forms.: First: illustrated by Grey v Inland Revenue Commissioner- Concerned beneficiary under trust who told trustee to hold his equitable int on trust for a 3rd party. A holds on trust for B. B gives direction to A to hold on trust for C. Case concerned oral declaration by B telling A to hold property on trust for C. Paperwork executed to confirm oral direction. Issue dealt with liability to pay stamp duty over assigned shares (ad velorum stamp duty (varies on value of property being exchanged.)) If oral direction was effective to dispose of beneficial interest in favour of C, then it was oral direction that disposed of property & later written docs were mere confirmation of agreement. Paperwork would have only attracted nominal stamp duty. If oral not effective, disposition would have occurred by virtue of written docs & would have attracted ad velorum stamp duty. Oral direction deemed ineffective according to 23C(1)(c) as dispositions must be written. If direction had related to trust of real property not personalty, compliance with this legislation still necessary but also could note that transaction would have been caught by s23C(1)(a) relating to land.
Second: Demonstrated by Vandervell v IRC- whether tax is paid in relation to a particular transaction. Personal property, A holds shares on trust for B. B gives direction to A to transfer legal title as well as equitable to C so C owns it outright. Q is if oral direction was effective or if later documentation attracts tax. Held oral direction was effective to dispose of B’s equitable interest. Despite this being disposition of subsisting equitable int, held s23C1(c) doesn’t apply in this case or circumstances where direction by B to trustee relates to both legal & equitable int - s23C1(c) only applies when dealing with equitable int alone. Oral direction is effective & writing doesn’t attract tax. Said that direction by beneficiary achieved same result as if there’d been no separation of legal & equitable interests. Disposition not equitable int alone but entire estate & accordingly s23(1)(c) is irrelevant. If Vandervell had involved property, wouldn’t be relevant to this section but rather to s23C(1)(a). What if equivalent of B dies before direction to trustee was carried out? Lord Wilberforce says death would have no effect HOWEVER, in Parker and Parker v Lyncham held that death of B before anything is done to carry out instructions would revoke the direction entirely.’ Disposition by means of an agreement to assign: -‐ -‐
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By way of contract to assign an equitable interest Utrid v IRC (payment of stamp duty)- If beneficiary of shares enters into contract to assign shares to a purchaser for valuable consideration, if there’s oral contract is it effective? Or, will subsequent documentation be an instrument that attracts ad velorum stamp duty- it will if earlier contract is ineffective. S23(1)C either applied or stamp duty was required nonetheless. Radcliffe says: oral contract effective- While this is disposition of a subsisting equitable int as contract to assign equitable int, s23C(1)(c) didn’t apply bc of s23C(2). “this section does not affect the creation… of a constructive trust.” He was endorsed as correct legal analysis. When you enter into contract to sell property, vendor becomes constructive trustee of property for purchaser. Constructive trust lasts until property has been fully transferred to purchaser. Neville v Wilson- shares held on trust for N, shareholders in company oral agreed to liquidate N & divide equitable interests of shares among holders. Oral contract to assign equitable interest in personal property is effective- doesn’t need to be in writing as s23C(2) trumps s23C(1)(c). For equitable interests in land, s23C(2) would still trump s23C(1)(c).
