Constructive Trust Constitution

In order to create an express intervivous trust two approaches are in place which can be used.
Firstly an express trust can be created through self declaration of that trust where the trustee can
appoint a third party to act as a trustee or declares himself a trustee after creating a trust. When a
third party is appointed as the trustee then a trust will be deemed fully established after the legal
possession has been transferred of the trust property.
Mode of transfer of a trust will depend according to its classification and trust property which is
transferred could be anything from personal property to the land or even stocks. The legal
ownership can be transferred voluntarily or by executing a deed which shows that the settlor is
voluntarily relinquishing the possession of the property. When there are privately held
corporations then ownership can be transferred through the presence on the members register of
the company as can be seen from the case of Milroy vs Lord, whereas for publicly traded
companies legal ownership can be transferred through electronic means. According to the land
registration act 2002 the settlor can transfer the legal ownership of the unregistered land through
a deed or by registering it into the title register. If the settlor wants a successful transfer of the
legal ownership then it is very important that he transfers the legal title to a trustee who is not
part of the agreement and not a party.
Once the legal ownership has been transferred to a third party then all of the beneficiaries can
enforce it but the trust will not be completed if the settlor fails to transfer the legal ownership to
the trustee within their lifetime and then it will not be possible to enforce it even by a volunteer
beneficiary, case of Milroy vs lord. We have often heard of equity maxims which say that equity
does not assist a volunteer or equity does not perfect those gifts which are imperfect and this
means that a volunteer will be provided no remedies for an imperfect gift equity is only going to
assist a person if he or she has completely established a trust. However recently equity laws have
been relaxed in those situations where no legal title was being transferred by the settlor to the
third party in their life time.
There are many exceptions which exist in this regard. Some of these exceptions can be seen in
the cases of Mascall vs Mascall, Pennington vs Waine where there is the exception of
unconscionability, the doctrine of proprietary estoppel, the rule set out in the case of Strong vs
Bird, Re Ralli Wills trusts principle. In the case of Mascall v Mascall the court held that a trust is
going to be completed if the settlor has satisfied all the requirements in his life time and
transferred the legal ownership of the property to the trustee. In another case of Milroy v lord the
doctrine presented in this case has been relaxed as now the third party is allowed to execute the
required procedures in order to transfer the legal ownership. In case of Re Rose a trust was
executed and the court of appeal gave a difference between this case and the case of Milroy by
saying that in the Milroy case the settlor had failed to take all the necessary steps in order to
complete a valid transfer.
Re rose could not be applied in those situations where the transfer was not successful even
though the settlor had taken effective measure to transfer the owenership. Another exception
could be seen in the case of Pennington vs waine where the court held that it was not necessary
on part of the settlor to fulfill all the requirements for a valid transfer while he was alive. All
these exceptions have created more confusion and doubts in the minds of people regarding
previous cases like MAscall vs Mascall. Again, as can be seen from the case of pennington vs
waine the exception was provided that a trust is possible to be created even if the settlor has not
fulfilled all the necessary requirements. In a situation when the settlor has made any promise or a
commitment to the beneficiary and in return received any consideration for that promise then
later on he cannot alter his decision as it would be deemed inequitable under trust law. The same
thing had happened in the case of Milroy vs lord but no one had taken any notice of it. It is to be
noted that the case of pennington has not been much utilized by the courts in comparison in the
case of Zeital v Kaye the COA did not follow a lower courts decision which related to a failed
transfer as the transferor did not satisfy all the necessary requirements.
Many have criticized the decision of pennington case stating that it goes against the equity
principle that equity will not perfect a imperfect gift. There is confusion regarding the
unconscionability test in relation to taxation and other purposes. In the case of Curtis vs
Pulbrook, the court held that proprietary estoppel was the sole reason why pennington was
established and the case doctrine was only relevant in those situations where the recipient had
acted in a detrimental way because he had believed that a valid gift has been received.
Turner, Dillwyn and many others have said that in situations where we see detrimental reliance
there the court has the discretion to require the fulfilment of an imperfect trust. The doctrine of
proprietary estoppel helps us in situations which are dealing with land rights and where the
formalities to transfer such a right have not been followed resulting in reliance on formal
procedures. It was in case of Taylor v fashion vs Liverpool lord where it was explained that how
estoppel equity would be established and lord oliver said that this was possible only if the
claimant was able to assure or demonstrate a reliance on the said representation or show that he
was harmed and in these situations it would then be wrong to deny the claimant his rights.
Strong v bird doctrine was applied in the case of Re Stewart where we can see that another
exception to the rule of equity was given and a imperfect gift was made perfect. In these cases it
had been established that a complete trust will be created even if it had not been completed
during settlors’ lifetime if the recipient of the trust property had become the executor after the
settlors death. The gift should be durable enough that it still exists even after the donor had died.
The case of Ralli Wills trust tells us that if a trustee is able to get legal ownership of the trust
property then a trust will be established. Buckley J says that the fact that the claimant is in
possession of the property just because they are a trustee is not of importance, instead what is
important is the means which he has used to acquire the trust property and the legal ownership of
the trust property.
After the case of Choithram vs Pagarani, the legal disposition methods have changed following
the courts appointment of a volunteer. Before this case the rule was that a trust would not be
considered a trust through self decleration if the trust was trasnfered through a method which
was not efficient. The notion which has been expressed in this case of Milroy v Lord which we
have discussed in our answer above has been unambiguously expressed by LJ Turner and
implemented in the case of Richards versus delbridge. The circumstances which were around
Choithrams case didnt align with both the two methods for creating a trust which was
intervivous. Here the individual who created the trust also served as one of trustees. However
after the trust had been made the settlor did not transfer the legal title to the other trustees. In a
situation where one trustee is in possession of larger trust property in his name then he or she has
the duty to effectuate the transfer the property into the names of all the other trustees as well.
When there is a situation where the settlor declares a trust and also serves as
a trustee then the Pagarani principle will operate here to render the trust
operative as a declaration without any need for the transfer of ownership to the
remaining trustees.
At the end our answer it is also worth mentioning the legal concept of Donatio
Mortis Causa which is a type of gift which is made with the intention that it
will be trasnfered to the recipient and is made after donor has died. It was the
case of cain v moon where the important requirements for the application of
this rule were considered.

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