Constitution Flashcards

Question

RE ROSE CASE (transferor making every effort is sufficient)

Answer 1

- The husband gave the stock transfer form and share certificate to his wife, she gave them to the company who were slow to update its register. When did ownership change? - The transferor does not have to do everything necessary but does have to do everything within their power – the every effort rule - This gives every effort test. - Waited 3 months. - Husband died several years later. - The reason it became in court is due to timing. - This matters for inheritance tax and many equities is around tax, - If gift is given several years after debt, the gift may be subject to inheritance tax. - The relevant date was gifted before the date could be free before inheritance tax was in April. -m The issue was when he transferred the shares. - This is a legal requirement that requires formality. - When equity steps in, they - The legal ownership could not be passed on the wife. - Equity affects the ownership. - It was held in equity, the transfer has not have to do anything necessary but has to do everything in their power. - When husband had given his wife the certificate and form, he had done everything he was required to do and with his shares. - On the 30th of March, the owner of equity had passed - 3 months later, when the company registered, the legal owner got passed to the wife - The husband was only the legal owner of the shares. - The value is in the equitable interest. - 10th April, wife already had equitable interest, so she did not have to pay inheritance tax. - Other way to transfer, you can send them directly to the company, that shows every effort rule. - If this gets lost in post, this will be tricky for the court. - If a transfer case of equity only, only equitable is transferred.

Answer 2

- 30 March – submitted documents – equitable interest passed to his wife,husband still had legal interest (so owned the shares on trust for his wife) - 30 June – company updated its shareholder register – the legal interest passed to his wife (she now has both legal and equitable interest in the shares)

Answer 3

* Aunt sent forms to company auditor, nephew relied on assurance to become a company director * Sufficient if the transferor had intention to transfer and in the circumstances it would be unconscionable for it not to happen * Detrimental reliance was important * Zeital v Kaye tells us Pennington v Waine went too far - Every effort test was not met. - It was criticised having gone too far. - Rule was if you wanted to become a director, you must have shares in the company. - She filled in the stock transfer form. - She sent the form to the company auditor. - They accepted the form and certificate and said they’d handle it - Ensured the nephew would receive the shares. - This did not pass every effort test. - The aunt died; the auditor had not given document to company. - It was held the equitable title relied on the shares and the document of the company.

Answer 4

1. The aunt intended it to happen. He was told he would receive the shares Not done anything to change her mind. She did not mention the share in her will because she thought she already gave the share. 2. The court took the view that it would be unconscionable which means unfair for the shares to pass the nephew. - Detrimental reliance because a nephew needed a share to become director - First the aunt to give shares to him and the auditor reassuring. - The son relied on the reassurance of their words. - The court said it was unconscionable. - The principle is that there must be intention by the transferee and unconscious for indictable reliance not to be passed on the recipients.

Answer 5

- Tells us that they went too far, - It only rerose, - Required every effort to be made. - It caste doubts

Answer 6

* Mascall v Mascall – transfer of land where the son had not registered the transfer with the land registry * Re Fry - international transfer where the additional formality of treasure consent had not been obtained * Paradise Motor Co – the transferor had signed the share transfer form, but the recipient had not signed it

Answer 7

- The father had executed a deed to transfer to his son. - Gave deed to his son but his son has not given to land registry. - They fell out. - The father tried to get his land back. - He still had legal interest. - The court applied every effort test. - The father had made every effort test. - This is because they did everything required of them. - He gave the recipient who is his son, his deed. - The equitable interest had been passed on to his son. - A person cannot change their mind once it’s been passed on.

Answer 8

- There was extra formality for shares to be transferred. - As a transferee, lived abroad. - The transferee has completed stock transfer form with share certificate to company. - But he had not obtained consent. - It was not enough because he had not done everything he was required to do. - The treasure could have refused and asked more questions or may not of responded. - Due to consent needed, it was possible for transfer of the shares would never of happened if treasure refused the transfer.

Answer 9

- The father had intended to give step son a gift of his shares - Father completed and submitted form but step son had not signed it - They fell out - Father wanted his shares back. - Did father make every effort rule? It was held that the father had made every effort and he did not make regularity.

Answer 10

* STATE the case * STATE the principle * APPLY the principle * COMPARE the facts - Give name of the case (3 key cases and any other additional as bonus) - Apply principle to the case to the scenario.

Answer 11

Legal parties have not passed to the trustee because the step where the company shareholder update has not happened. The equitable title has passed. This is under Milroy v Lord. Everything necessary hasn’t been done, because the transfer hasn’t been registered in the company who have not updated it in the shareholder. Every effort test did not happen. This is under Re Rose. In the Re Rose case, no errors were made but, in this scenario, there were errors made. The shares were eventually registered in Re Rose whereas in this scenario, they were not registered. There is intention shown by Dylan. This is under Pennington v Wayne. because despite the errors he made, he still made intention to send the application form. There was no insurance. * CASE – Milroy v Lord * PRINCIPLE – “Everything necessary” * APPLY – Not satisfied as not registered * CASE – Re Rose * PRINCIPLE – “Everything within your power” * APPLY – Mistakes on form so not done everything within power - Only minor mistakes - “Officious employee” * COMPARE – Send to Co (preferable to Re Rose) * DISTINGUISH – No errors in Re Rose - Form not still with settlor at death * CASE – Pennington v Waine * PRINCIPLE – Intention & unconscionable * APPLY – Intention due to written document - Minor error - Died next day * COMPARE – Send to Co (preferable) * DISTINGUISH – No errors in Pennington - B not informed - Not needed for directorship - No “detriment” Zikkel and K said Pennington went too far to every effort.

Answer 12

Legal interest has not passed to Samuel because we haven’t got the full procedure of the shareholder. The equitable interest has not passed. Everything necessarily has not been done because the update of the shareholder by the company has not been done. Every effort test has been done because she has filled the form and sent them somewhere. This is under Re Rose. There is unconscionability, due to intention to her intention to transfer * CASE – Milroy v Lord * PRINCIPLE – “Everything necessary” * APPLY – Not satisfied as not registered Example 2 Slide 3 * CASE – Re Rose * PRINCIPLE – “Everything within your power” * APPLY – Relying on 3rd party - Could have sent to Co * COMPARE – No comparison * DISTINGUISH – Sent to accountant not trustee Example 2 Slide 4 * CASE – Pennington v Waine * PRINCIPLE – Intention & unconscionable * APPLY – Intention due to written document - Died next day - Told Samuel * COMPARE – Sent to 3rd party - Told Samuel * DISTINGUISH - Not needed for directorship - Accountant didn’t tell Samuel - No “detriment” In both the scenario, neither of the equitable interest were transferred.

Answer 13

* Contracts declared to be non assignable * Personal contracts * Rights of litigation * Expectancies * Public policy

Answer 14

Property that cannot form a trust because it cannot be a signed to a trustee. It is possible to create a trust over a large range of property. The right to enforce a contract, cannot be transferred if a contract contains a clause preventing the transfer. You cannot transfer it to sell your rights to create a trust. Contract of goods can be transferrable unless clause prevents the transfer.

Answer 15

- Personal contracts are those who must be performed personally. - This will include a contract of employment.

Answer 16

- Contracts of sign of goods are transferrable but if there is a breach of contract, this creates right of litigation. - You cannot transfer this to somebody else.

Answer 17

- You expect to inherit, to receive some money or a car or anything within the will. - You cannot transfer expectancy. - This does not mean that you will 100% get it because people can change their will any time up until they die. - You would have an understanding hope. - You will have either a legal or equitable interest.

Answer 18

There are certain property right that cannot be transferred to another as a matter of public policy.

Answer 19

- This is where a person tries to break a trust but doesn't do it properly. - If you are trying to give someone a gift by transferring legal/ equitable interest, equity as a general rule will not step in and sort it out for you however, certain circumstances will step in which: - Equitable maxim – equity will not assist a volunteer. - Volunteer is someone who has done nothing. - Equity will try to protect them.

Answer 20

- The rule in Strong v Bird is a Trustee is made executor of exist will. * Case about the release of debt * Intent to discharge the debt during lifetime and * Nothing to indicate a change of mind, then. * Appointing that person as executor will discharge the debt. Release of a debt. - After the case, it has been applied to transfer a property to constitute a trust. - Instead of paying back money but in a different way. - Agreement he would let her live with reduced rent until debt is paid off. - Despite the agreement, she paid full amount. - In her will, she made bird her executor. - Executor deals with the decreased property. - Pay off any debts the decreased must call in any debts that they have. - Bird di owe her the money but as he is her executor that discharged the debt that he has no longer owed money. - If you intent to discharge someone of debt during your lifetime and there is indicate a change of mind. - If you then appoint that person as your excutor, it will discharge the debt.

Answer 21

- Equity will not perfect and imperfect gift - The rule in Strong v Bird - Re Stewart/ Re Ralli's - Equity will not assist a volunteer - Marriage settlements - Pullan v Koe - Re Pryce

Answer 22

applies to wanting to make a gift to another

Answer 23

applies to constitution of trust * If constitution of trust fails, appointing the trustee as executor will constitute the trust on death (law of fortuitous vesting)

Answer 24

- Equitable maxim – equity will not assist avolunteer * Marriage is considered to be consideration * Pullan v Koe – child of the marriage can enforce the promise * Re Pryce – other relatives cannot enforce the promise

Answer 25

1. Formalities 2. Constitution 3. Three Certainties 4. Not contrary to public policy/ Perpetuinty rules

Constitution Flashcards

(49 cards)