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'Although equity will not aid a volunteer, it will not strive officiously to defeat a gift.’ (Lord Browne in T Choithram International SA v Pagarani [2001] 1 W.L.R.1)

Critically evaluate this statement in light of the exceptions to the maxim that equity will not aid a volunteer.

  • Demonstrate a systematic, contextual and critical knowledge and understanding of the key theories, concepts and principles of Equity and Trusts
  • Critically understand the limitations of current law and proposals for reform
  • Subject-specific Skills
  • Consolidate skills of independent research, enquiry, analysis, synthesis and convey complex information from a wide range of sources
  • Reflect on and evaluate equitable concepts, doctrines, interests and remedies
  • Critically analyse the importance of formality requirements and distinguish between legal and equitable interests
  • Identify and categorise trusts, and critically evaluate the requirements for a valid trust
  • Critically analyse the rules applying to the creation and operation of trusts
  • Identify and assess the role of trustees and their liability as well as the remedies of beneficiaries
  • Consolidate essay writing skills to devise and sustain arguments in order to construct well-structured and balanced legal reasoning.

Equity and Volunteerism in Donations

Founded on trust is a beneficiary is a volunteer except he has offered a valuable consideration. In an instance a gift is created, the beneficiary would for all time be a volunteer because it is by designation made with no reflection. In addition, the conventional reasonable maxim holds that equity would not aid a volunteer. Therefore, a gift would not be perfected through interpreting the donor of the specific gift as a trustee of the property in question. The doctrine that equity would not aid a volunteer apparently confines the idea that in a situation where an individual obtains a benefit for no consideration, then equity would not impose a responsibility to ensure that the benefit is obtained. This results in the context of gifts, to the renowned principle where “equity will not perfect an imperfect gift”. In this regard, it appears that a requirement that all the three aspects of valid gift be strictly fulfilled. In many situations, the case law has offered exceptions to the sometimes onerous third requirement that gifts should be delivered to the beneficiary of the gift. In general, this implies that where a gift is made imperfectly means that equity cannot allow the anticipated recipient to claim the specific gift based on trust. Nonetheless, there are some exceptions to the principle. The paper will investigate these exceptions plus the degree in which the principle has been accrued from “equity will not assist a volunteer” to a point where “equity will not assist a volunteer” using case laws.

The primary case in this instance is Milroy vs. Lord in which a voluntary title deed that alleged to allocate fifty company shares to Samuel Lord founded on trust for Milroy. Lord was an agent for Milroy founded on the authority of attorney and the requirements of the transfer of the shares were not adhered to. Therefore, Milroy made the decision to create a trust that had been affirmed. However, it was maintained that an unsuccessful transfer will not amount to affirmation of trust in the absence of apparent purpose to generate trust. Additionally, in order for the settlement to be regarded as valid, then the settler should have done everything that are pertinent to be undertaken during the transfer of the property that will make the settlement binding on him. Because shares had not been transferred in this instance, it means that no trust was created; hence, no gift was made. This particular case requires that for a resolution to be obligatory, there must be either an absolute transfer, an affirmation of person as trustee, or a transfer of particular assets to a third party as trustee. Accordingly, the presiding power established by Turner L.J in Milroy vs. Lord created adequately precise principles concerning the transfer of property. Thus, the absence of consideration in return for the settler’s pledge would deem a beneficiary  a “volunteer”, as well as equity would not aid a volunteer based on the ground that it is biased nature will not impose a duty. While firmly using the Milroy vs. Lord, it is needed that trust could unquestionably fail the law, as well as in equity since shares were not duly registered, where the shares were not even send to the firm. The verdict of Re Fry long-established that the doctrines that were established in Milroy were the donor had fulfilled all legal requirements; however, had not adhered to extra formalities, that made the transfer of shares to be incomplete at the law along with equity . In addition, Clarke L.J crafted the vastness of his decision in Pennington on the evaluation of the donor’s intent, a hazardous strategy with a classically blurring impact on a recognized principle. Because the Court of Appeal maintained that the transfer of shares in Pennington case to be applicable, it could be fair to claim that the verdict thus far weaken well developed power. Therefore, the Milroy doctrine must only be deemed “comparatively straightforward” because many exceptions have consequently occurred, most persuasively in Strong vs. Bird, Re Rose, Rose vs. IRC, AND Choithram. 

Exceptions to the Maxim in Equity that Does Not Assist a Volunteer

The verdict in Milroy case functioned to frustrate incomplete deals other than provide effect to the donor’s intent and has attracted some criticism for challenging overarching doctrines of justice along with fairness. The narrow approach in this case has been commended by many for creating a clear legal position regarding incomplete transfers of properties. The case too heralds protection of requirements that provides donor’s several chances to change their reasoning and make sure that they are certain regarding issues on their transaction. In Milroy case, the court in Re Fry also assumed a restrictive approach and declined to affect a trust. In this instance, the settler presented the certificates of shares to the trustees; nonetheless, during this period, the transfer of shares should have been permitted by the treasury. In the event the settler died prior to receiving approval from the treasury. The repudiation of the court was founded on the likelihood that the share transfer could have been discarded or additional information could have been needed to validate the trust. The Court of Appeal was not willing to overrule treasury’s involvement in meeting the entire requirement and was also not certain if the deal could have been completed.

In addition, the maxim that the settler should have undertaken that which is “essential” to make up a legitimate trust was adequately used by the High Court in the case of Re Rose, Rose vs. IRC. As a result, the High Court in this case maintained that transfer happened when the specific transfer document was consented by the donor plus awarded to the done and not when the title deed of the land was registered. The validation in this case was that the donor was believed to have done everything required under his authority to facilitate the transfer of the property. The resolution of the court received some censure. Nonetheless, the validation can be obtained from the maxim where equity does what should be done; where the donor had already fulfilled all that was needed to effectively build the trust, it was not within his powers. Many scholars appear to concur that the Turner L.J’s verdict was “restructured” by the novel limb of trust creation that was pioneered in Re Rose. Hence, Lord Evershed too acknowledged that unfairness of invalidating a gift previously the donor had undertaken all the requirements needed of him. This case was to be interpreted as an exception of Milroy vs. Lord basically interpretating Milroy in a deformed way to meet the trust principles. Hence, to claim that Re Rose perfected the gift will be imprecise because no novel principles were read in to the current authority.

Thus, the verdict in the Re Rose case primarily transformed equity’s strategy towards imperfect deals. The resolution by the court relates the creation of trusts, where a trust is constituted; the courts aid the beneficiaries through imposing their rights as long as they are a volunteer. This particular case demonstrates the principle that in situations where the donor has fulfilled all the requirements regarding the transfer, they may transfer the title to a different party; however, that absolute trust has not been concluded, a reasonable significance would have passed, even when the done is a volunteer. Consequently, this code is an exception to the overall law that equity would not aid a volunteer, as well as is founded on the unfairness breaking a promise on the pledge once the donor has alleged to transfer the title though meeting all the requirements needed of him. Therefore, the principle of Re Rose has been lately extended. Also, in T Choithram International SA vs. Pagarani, a many lying on his bed waiting his death made the decision to proclaim an inter vivos trust on his assets. The settler’s intent was to be among the 9 trustees; however, the man fallen short to transfer the lawful title deed to the other trustees that led to an invalid trust not constituted based on ordinary law of trusts. Hence, the Court of Appeal made the decision that the man had neither successfully vested the property to the other trustees, nor did his utterances amounted to a gift to make him one of the trustees. In addition, the High Court did not provide a generous creation in order to treat unsuccessful words of absolute gift as talking effect if the man had declared himself trustees for the donee. Consequently, the court made the verdict that the issues founded on “equity will not assist a volunteer” or “perfect an imperfect gift”. Therefore, in the process of permitting the court’s decision, the Privy Council endorsed the maxims; however, further declared that equity would not endeavour overbearingly to overcome a gift.  This interpretation for holding a trust was for the reason that the settler had fulfilled all the requirements that create trust through declaring himself as the trustee.

Case Laws

It is clear that Re Rose case fashioned an exception to the code in Milroy, as well as read Milroy to imply that whilst equity would not faultless a gift in which the donor had failed to meet all the requirements under the provisions of the law to transfer the title of the property, it would present effect to an endeavoured transfer if the donor had made all the requirements regarding the transfer of the title.  The law only works in circumstances in which the actions of a third party are essential to complete the transfer of a lawful title, which normally entails the transfer of shares, but in previous cases had been used to in transfer of land along with leases. Thus, the lawful possession of shares may only be moved by the registration of the transferee on the firm’s share register.

Nonetheless, this was not the conclusion of developments in the case laws, in Pennington vs, Waine, the imperative requirements concerning the delivery were not fulfilled. Nevertheless, the transfer was believed effectual in equity. Also, though there delivery was needed in Re Rose, this does not imply that the prerequisite for the release may be bestowed within some conditions. The verdict in Pennington case makes its nearly impractical for practitioners to confidently counsel customers making transfers of property to evade court actions to advice their customers of they are compounded with an imperfect transfer of property. The Pennington case apparently overextended the borders. This decision offers the courts with a broad discretion to perfect imperfect deals where it represents a gift of Pennington that is potentially hazardous if not subject to some restrictions. As a result, it is rational to wrap up that Pennington case flags the maxim in which equity would not help a volunteer through perfecting imperfect gifts. Consequently, the present principles in this scenario demand many requirements to be fulfilled before transfer of property that permits the potential donors to change their mind in different phases during the transfer period. Also, it is tedious to permit courts a creative judgment on what it considers to be unconscionable to conclude the efficiency of endeavoured transfers of property. The principle in Re Rose must be a received development in equity because it cushions against the austerity of Milroy. It is apparent that the different provided an impetus resulting in Pennington.

In conclusion, it is obvious that the principle in Re Rose “watered” the stringent approach that was applied in Milroy case devoid of fashioning a realistic along with hypothetical problems that emanated from Pennington. Equity’s position seems more equitable; however, absolutely much more complex in its application. Therefore, it is clear that it is improbable that the maxim may be argued to be refined to integrate the donor’s craziness, as the current stance seems to leave room for aiding a volunteer where doing this way will rectify a donor’s craziness. Certainly, Pennington case can well be overturned in the prospect; nonetheless, currently, the most apt interpretation of the maxim is that equity would not aid a volunteer provided it will be unconscionable not do to so.

Milroy vs. Lord [1862] 4 De GF & J 264/45 ER 1145.

Pennington vs. Waine [2002] ECWA Civ 227/[2002] 1 WLR 2075.

Re Rose, Rose vs. IRC [1952] Ch 499.

T. Choithram vs. International SA vs. Pagarani[2001] 1 WLR 1.

Martin, J. Hanbury and Martin’s Modern Equity 19th (Sweet & Maxwell 2012).

Mitchell C. Hayton & Mitchell: Commentary and Cases on the Law of Trusts and Equitable Remedies, 13th edition (Sweet & Maxwell 2010).

Moffat G. Trusts Law, 5th. (Cambridge University Press 2009).

Pearce R., Stevens, J. & Barr, W. The Law of Trusts and Equitable Obligations, 5th edition (Oxford University Press 2011).

Penner, J. The Law of Trusts, 9th editon (Oxford University Press 2014).

Stockwell, N. & Edwards, R. Trusts and Equity, 11th edition (Pearson 2013).

Watt, G. Equity and Trusts, 6th edition (Oxford University Press 2014).

Delany, H. &  Ryan, D., “Unconscionability: a unifying theme in equity”, (2008) Conv 401.

Garton, J.“The role of the trust mechanism in the rule in Re Rose”, (2003) Conv 364.

Halliwell, M. “Perfecting imperfect gifts and trusts: have we reached the end of the Chancellor’s foot?”, (2003) Conv 192.

Morris, J.,“Questions: when is an invalid gift a valid gift? When is an incompletely constituted trust a completely constituted trust? Answer: after the decisions in Choithram and Pennington”, (2003) PCB 393.

Tham, C.H., “Careless share giving”, (2006) CONVPL 411.

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