MLL406 Lecture Notes - Lecture 8: Obiter Dictum, Nsw Trainlink H Set, Ad Valorem Tax
1 Jul 2018
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Topic 8: Statutory Formalities and Complete Constitution of Trusts
Statutory Provisions - ‘writing provisions’ consistent with Statute of Frauds:
•Property Law Act (Vic) s 53(1) is typical and provides as follows:
Instruments required to be in writing:
53 (1) Subject to the provisions of this Act with respect to the creation of interests in land by
parol [oral]:
(a) no interest in land can be created or disposed of except by writing signed by the
person creating or conveying the same, or by the person’s agent thereunto lawfully
authorised in writing, or by will, or by operation of law,
(b) a declaration of trust respecting any land or any interest therein must be
manifested and proved by some writing signed by some person who is able to declare such
trust or by the person’s will;
(c) a disposition of an equitable interest or trust subsisting at the time of the
disposition, must be in writing signed by the person disposing of the same or by the person’s
agent thereunto lawfully authorised in writing or by his will,
(2) This section shall not affect the creation or operation of resulting, implied or constructive
trusts.
Writing provisions:
•Does 53(1)(a) apply to the creation of legal interests in land?
•Does 53(1)(a) apply to contracts for the sale of an interest in land which have the
effect of creating equitable interests?
•53(1)(b) appears to require written evidence – need not be the instrument itself (deed).
•53(1)(a) declaration or disposal of an interest in land to be in writing
•53(1)(c) requires the actual disposition in writing
•‘declaration of trust’ in 53(1)(b)
•‘disposition of an equitable interest or trust subsisting at the time of the disposition’ in
53(1)(c)
•‘interests in land’ - (1)(c) applies to dispositions of equitable interests in all forms of
property
•legislation as an instrument of fraud.
•Existing equitable interests under (2) may need, however, to still satisfy the formality
requirement in s 53(1)(c): Oughtred v IRC.
(1)(a), (b), (c):
•Paragraph (1)(b) requires evidence in writing of a declaration of trust respecting an
interest in land
•a declaration insufficiently evidenced is unenforceable by para (1)(b), though not void
•if para (1)(a) or para (1)(c) of the writing provisions applies and is not satisfied, the
declaration is void.
(1)(a), (b), (c) / Realty:
•disposition or transfer of an interest:
•(1)(a) and (1)(c): in writing
•(1)(c): particulars not necessarily required
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•(1)(b): must be set out in writing: Waterhouse: Can be after declaration of equitable
interest (eg. A letter of acknowledgement).
Realty (Land):
Adamson v Hayes
•Per Menzies J: para (1)(a): legal interests in land
•equitable disposition of a legal or equitable interest in land - in writing
•Per Gibbs J: 1(a): oral contract for the sale of land or an interest in land
•an action for specific performance of a contract signed by an agent with oral
authority failed.
•Majority: Personalty – include both legal and equitable interests:
•Gibbs CJ, Walsh and Stephen JJ: (1)(c): disagreed that writing provisions
operated only on interests in land
•provisions also apply to personal property.
Distinguishing - (1)(a), (b), (c):
•Distinction between para (1)(a) and para (1)(c)
•(1)(a) - signing not only by the creator or conveyor
•(1)(c) - either by the person disposing (or in the case of para (1) creating) or an
authorised agent
•Writing provisions overridden by fraud
• "equity will not allow a statute to be made an instrument of fraud".
• a person to whom land is conveyed as a trustee, and who knows it was so conveyed,
cannot deny the trust, and claim the land as his own
–Last v Rosenfeld [1972] 2 NSWLR 923
–Re Marlborough [1894] 2 Ch 133 (beneficial interest sought to be defeated is
that of transferor).
•Assignment of personal property need not be in writing, but assignment of
equitable interests in personal property does require writing.
Declaration of Trust – Personalty:
•Declaration of trust of personalty
•If declaration is not a disposition within 1(c) no writing necessity
•Oral declarations solemnly made in the presence of a number of witnesses.
Declaration of Trust – Realty:
•Declarations of trust of realty
–within para (1)(b)
•Person who must make the declaration
–Beneficial owner of the property and not the trustee
•Writing need only “evidence” declaration
•No particular form is required
–a signed acknowledgment: Ambrose v Ambrose (1717) 1 P Wms 321
–correspondence: Childers v Childers (1857) 1 De G & I 482
–a recital in an instrument: Deb v Deb (1727) 2 P Wms 421; Re Holland
[1902] 2 Ch
–an affidavit;
–answers to interrogatories
–a telegram: McBlain v Cross (1871) 25 LT (NS) 804.
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•by reference to or importing the terms of an existing writing should satisfy para (b)
•Writing can be upon or after declaration
•date of the writing is immaterial BUT takes effect from the time when it was declared
orally
Disposition / Assignment:
•Disposition of existing equitable interest
–writing necessary under para (1)(c)
–Land – under 1(a)
–assignment itself must be written - interconnected documents
•Assignment of only equitable interest by holder of entire interest
–(1)(c) does not apply
•Assignment of only legal interest
–created orally, by assignment or declaration of trust. For personal property no
writing requirement.
•Transfer of entire interest including equitable interest
•(1)(c) does not apply
–B is the bare trustee for V of property, and V orally directs B to transfer the
legal estate to C: Vandervell v IRC [1967] 2 AC 291; [1967] 1 All ER 1.
Vandervell v IRC :
Facts:
•Bank held shares as bare trustee for Vandervell who wished to make gift to college and
instructed bank to transfer shares to them intending to pass legal and equitable interest
•Scrip & blank to college
•Share transfer to V’s agent
•C granted T and option
•Large dividend declared – paid to C – T exercised option
•No written disposition of V's equitable interest at any stage; so V was assessed to surtax
•Defence: "income from property of which the [taxpayer] has divested himself
absolutely"
•Appeal failed
•UK s 53(1)(c)
•No written disposition of equitable interest or appointment of agent
•HOL - para (1)(c) of the writing provisions did not apply
•transfer to C carried V's beneficial interest - no additional writing necessary
•(1)(c) only applies "where dealings with the equitable estate are divorced from the legal
estate”
•dualism of estates - two different kinds of interest in property - equitable and the legal
•Authority for: no writing is required for a direction by a beneficiary to the trustee for the
trustee to transfer the legal interest in personalty to another party, where it is made clear
that the beneficial interest is also likewise to pass.
Comptroller of Stamps (Vic) v Howard-Smith
•“A voluntary disposition of an equitable interest may take one of at least three forms. It
may consist of an expression or indication of intention on the part of the donor that he
shall hold the equitable interest vested in him upon trust for the persons intended to
benefit. In that case he retains the title to the equitable interest, but constitutes himself
trustee thereof, and by his declaration, imposes upon himself an obligation to hold it for
the benefit of others, namely, the donees.”
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Document Summary
Topic 8: statutory formalities and complete constitution of trusts. Statutory provisions - writing provisions" consistent with statute of frauds: property law act. Instruments required to be in writing: (vic) s 53(1) is typical and provides as follows: 53(1)(b) appears to require written evidence need not be the instrument itself (deed). 53(1)(a) declaration or disposal of an interest in land to be in writing. Disposition of an equitable interest or trust subsisting at the time of the disposition" in. Last v rosenfeld [1972] 2 nswlr 923. Re marlborough [1894] 2 ch 133 (beneficial interest sought to be defeated is that of transferor): assignment of personal property need not be in writing, but assignment of equitable interests in personal property does require writing. Declaration of trust personalty: declaration of trust of personalty, oral declarations solemnly made in the presence of a number of witnesses. If declaration is not a disposition within 1(c) no writing necessity.
