Property law assignment task about self-declaration of trusteeship Essay

Property law assignment task about self-declaration of trusteeship - Essay Example Whereby, courts of chancery may have to strike a balance of conscience between â€Å"equity will not perfect an imperfect gift† and â€Å"equity looks at the intent not the form†. Where the settlor is the sole trustee there is no further requirement that the subject matter of the trust are vested in them, ‘constitution’ is automatic. The duality of ownership principle in this type of trust has been justified by three very prominent cases providing for varied approaches in their reasoning. The House of Lords case of Vandervell v IRC2 held that the settlor’s original equitable interest passes to the Beneficiary by the presumption of its existence ab inito. Whereas Lord Browne-Wilkinson in Westdeutsche Landesbank v Islington LBC3 proposed a different view of this reasoning stating, the original equitable interest as â€Å"dormant† and being â€Å"carved† out of the settlor’s legal interest. Also consider the case of Re DKLR Holdings 4 in the High court of Australia where Brennan J opines â€Å"An equitable interest is not carved out of a legal estate but impressed upon it†. This legal reasoning was also applied by McLelland J in the later case of re Transphere Pty Ltd. Practically these justifications form no part of judicial reasoning in reaching decisions but provide for the legal reasoning behind the creation of trusts. The first certainty the courts are looking to satisfy in an express trust is the certainty of intention i.e. words construed as to be imperative (Knight v Knight)5. Courts may apply deductive reasoning to ascertain or infer an intention but three requirements need to be satisfied to identify it. Firstly, â€Å"what did [the settlor] intend to be the sanction? Was it to be the authority of the court of Justice or the conscience of the devisee?†- LJ Christian (McCormick v Grogan)6. The word ‘trust’ is not important to legitimise the intention of the settlor to create a trust, only his intention of a binding obligation need be conveyed(Re Kayford)7. Secondly, the intention is made manifest (Re Vandervell’s Trusts (No.2)). Precatory words to benefit another are not sufficient (Jones v Lock)8 reaffirmed in Lambe v Eames9. Also the courts may take a different approach in finding such an intention in the contested declaration, it was held in Comiskey v Bowring-Hanbury10 that the courts will consider the context of the words used as important and may infer an intention to create a valid trust. Thirdly, the test of construction of the manifested intent is objective irrespective of the settlor’s actual intentions (Gissing v Gissing)11. As mentioned earlier precatory words are not sufficient to ascertain a valid self-declaration of trusteeship but the courts have not gone so far as to particularize words deemed to be sufficient. In Richards v Delbridge it was stated that the settlor does not need to use particular words: ‘†¦he ne ed not use words ‘I declare myself trustee’, but he must do something which is equivalent to it, and use expressions which have that meaning.’ In Re Cozens, Neville J stated what was required in order to establish that an owner had effectively declared himself trustee of his own property: ‘†¦.in each case where a declaration of trust is relied on the Court must be satisfied that a present, irrevocable declaration of tru