Disposition

When setting up an intervivos trust, the settler can choose to be the trustee or
choose someone else to be the trustee. If a settler wants to put a third party in
charge of the trust's assets, the trust won't be officially set up until the trustee
has gotten legal rights to the property. There are many kinds of trust property,
and each has its own rules for transferring control. In the case of a trust,
formal ownership can be transferred through possession or the signing of a
deed and Section 52 of the Law of Property Act of 1925 says how title to
unregistered property can be transferred. The Registration Act of 2002 says
how title to registered land can be transferred, and the register of members
says how shares in a private company can be transferred (Milroy vs Lord).
As stated in the decision Mascall vs Mascall, for the move to be valid, the
settler / donor must have finished all the necessary steps which are important
and this means that the only decisions left are ones that the trustee or a third
party can make. The Re Rose rule won't apply to the deal (Re Fry) if the settler
donor hasn't met all the requirements. At the time of the transfer, you can't
talk your way into a legal transfer of an equitable interest. If the conditions
aren't met, the disposition won't happen. The Law of Property Act of 1925,
section 531(c), seems to protect guardians, which was its main goal. With this
rule, it will be easy for the trustees to find the receivers because they will know
where the equitable interest is. This information will help the trustees decide
who should get the money. Writing clearly is important because it makes the
process easier. It also stops trustees from doing things that aren't honest.
Recent things that have happened with Section 53 1(c) have been especially
interesting. But most of these decisions have only been made in the last 50
years or so. Even though there are still some questions about what
"disposition" means, the decisions in these cases have cleared up the questions
about how section 53 1(c) should be used.
The word "disposition" should be given a natural, broad meaning that matches
what it would mean in everyday speech (Grey vs IRC), but this definition is
different from what is given in Section 205 of the Act (case of Re paradise Motor
Company Ltd). To figure out what will and won't count as a disposition, which
is a formality under section 53 1 of the Act, it is better to look at different
situations, especially those that have been covered by case law. With Romer
Lord Justice's detailed explanation and evaluation of the four ways to deal with
equitable interests in Timpson's Executors vs Yerbury, we can now decide if
these actions are dispositions or not. The owner of an equitable interest can
give that interest to someone else in a number of ways, including outright,
through trustees who hold the interest in trust for the third party, through a
contract in exchange for a valuable payment, or by declaring himself to be the
trustee of the third party.
Section 53(1) of a contract says that a transfer of a person's residual equitable
stake in a contract may not be a sale. (c). If a contract can be made that is
especially binding for the property held in trust, then this may be a good idea.
As Lord Radcliffe and John Justice agreed at the first instance in the case of
Oughtred vs IRC, trust property is passed if it is the kind of thing that can be
the subject of a contract that is especially enforceable. With a constructive
trust, the interest can be passed with little paperwork. Megarry Justice in Re
Holts Settlement and the Court of Appeal in Neville vs Wilson, the most recent
case, both agreed with this point of view. It will be enough to say the
accusation out loud because her investment is stock in a private company and
the contract would be especially actionable. If the company had been a public
limited company, which requires all deals to be in writing, the contract would
not have been written the way it was. Lord Radcliffe's point of view makes it
harder to find out who a trustee is because it allows for informal and secret
tasks. It's not surprising that Lord Radcliffe's point of view has been criticised,
since this is exactly the problem that Section 53.1(c) was meant to fix. The
parties deny that there is a trust, but equity has decided to apply one anyway.
They say that a "constructive trust" is not a legal transfer (Lord Cohen).
Romer Justice also talks about the idea of the original beneficiary setting up a
trust to hold his interest in the land. If the declared subtrust is a bare trust in
which the subtrustee has no active duties to perform, the courts seem to have
made a distinction between valid declarations of a subtrust and actions that
give the impression that they are a disposition of the equitable interest but are
actually a subtrust disposition.
During the Grey vs IRC case, John Justice used the words "sub trustee fading
from the picture." However, keep in mind that if he still has responsibilities to
fulfil, this won't be considered a disposition. In the cases of Grainge vs
Wilberforce and Grey vs IRC, Brian Green made a case that showed this wasn't
true. He said that Up John is wrong to think that this particular clause gets rid
of all or any of the equitable interest. Nelson vs Greening and Sykes are two
court cases that happened in the last few years. Lawrence Collins LJ pointed
out that this court is not bound by the decision in Grainge vs Wilberforce, and
it has already rejected the idea that a beneficiary's self-declaration of trust
disqualifies him. Australia's top court was in charge of the case of Grainge vs
Wilberforce. This line of thought could be used to show that not all subtrusts
need to be written down. In accordance with paragraph (c) of section 53 1 of
the Law of Equity Act of 1925, "disposition" is the act of giving a person's
equitable claim in a property to another person.
As Lord Radcliffe and John Justice agreed at the first instance in the case of
Oughtred vs IRC, trust property is passed if it is the kind of thing that can be
the subject of a contract that is especially enforceable. With a constructive
trust, the interest can be passed with little paperwork. Megarry Justice in Re
Holts Settlement and the Court of Appeal in Neville vs Wilson, the most recent
case, both agreed with this point of view.
Lord Radcliffe's point of view makes it harder to find out who a trustee is
because it allows for informal and secret tasks. Since this is exactly the
problem that Section 53.1(c) was made to fix, the objection is even funnier.
Even though the parties say there is no trust, the court of equity has decided to
act as if there is one. Lord Cohen's argument that a transfer is not always part
of a positive trust is used to support this point of view. Romer Justice also
talks about the idea of the original beneficiary setting up a trust to hold his
interest in the land. If the declared subtrust is a bare trust in which the
subtrustee has no active duties to perform, the courts seem to have made a
distinction between valid declarations of a subtrust and actions that give the
impression that they are a disposition of the equitable interest but are actually
a subtrust disposition. During the Grey vs IRC case, John Justice used the
words "sub trustee fading from the picture." However, keep in mind that if he
still has responsibilities to fulfil, this won't be considered a disposition.
John Justice in Grey vs IRC and Grainge in Wilberforce both disagreed with
this point of view, which Brian Green has argued against. He disagrees with Up
John's opinion and says that the relevant rule doesn't make the equitable
interest invalid in whole or in part. The thought that a beneficiary's self-
declaration of trust takes him out of the picture was recently shot down by
Lawrence Collins LJ in Nelson vs Greening and Sykes. He said that the ruling
in Grainge vs Wilberforce was not binding on this court. This was done because
someone said that this court had to follow what happened in Grainge vs
Wilberforce. With this way of thought, you could make the case that a written
subtrust agreement is not always needed.