REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
OBJECTIVES NOTES: UNIT 7: GIFTS & OTHER PROPERTY TRANSFERS
1
Valid gift requirements

Donor/ settlor may benefit others by either (i) outright gift; (ii) transfer to trustees;
or (iii) self-declaration as trustee but where route selected, done incorrectly (e.g.
wrong forms used), (i) court will not give it effect by applying another route; & (ii)
will not save gift by pretending was, say, trust creation (Milroy v Lord (1862)).
2
Consequences of failed gift attempt

Gift invalid where (i) donor’s intention wasn’t to make gift; (ii) donor incapable of
forming intention; or (iii) fails to correctly transfer property and since, by Milroy,
courts will not save invalid gift, disappointed intended recipient can’t sue unless can
show contract with donor which most unlikely without consideration so recipient
without value = volunteer whom courts will not help – equity will not assist
volunteers, albeit there are exceptions.
3
Property which may be gifted

(i) chose in action (e.g. shares, cheques, money & debts due); (ii) land (freehold/
leasehold, reg or unreg); (iii) equitable interests but legacy whilst testator still alive
not an interest, since may change mind, but expectancy/ hope (spes) where legacy
neither owned nor carries rights; & (iv) chattels.
4
What donor must do to perfect gift

(i) donor must have necessary mental capacity to understand nature/ consequences
of transaction & degree required depends on circumstances varying from fairly low
with trivial gifts to comparatively high with wills or where effect of gift to dispose
of asset of major value (Re Beaney [1978]); (ii) donor must demonstrate by words/
conduct intention to make gift (Hussey v Palmer [1972]); & (iii) property must be
transferred in correct manner, transferor must have done everything necessary to
transfer (Milroy v Lord) & where so equity considers gift perfect even if legal title
not yet passed.
5
Requirements according to property type

(i) With shares gift perfect when legal title passed on registration but in equity,
gift complete when donor has done everything has to do & donee has within
control all necessary to complete title (Re Rose [1952]); (ii) cheques may be
revoked pre-presentation but in theory may be endorsed to donee; (iii) with bank
notes, title transferred by delivery without need for writing; since note = bearer
instrument where bearer/ possessor’s rights conveyed by instrument; (iv) benefit
of debt may be assigned (=transferred) under s.136 Law of Property Act 1925
provided (i) in writing & (ii) notice given to debtor; (v) were land reg, cert
merely evidence of ownership owner & subsequent completes legal title but,
where donor did all that was necessary, by Rose, gift complete & perfect & donee
had within control that needed to complete title (Mascall v Mascall [1984]); &
(vi) with chattels, title passed by physical delivery or by deed (Jaffa v Taylor
Gallery Ltd [1990]) & for def to prove gift &, where alleged donor had died &,
could not explain intention, courts to approach def’s claim with suspicion
(Thomas v Times Book Co Ltd [1966]).
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REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
Equity’s role re gifts
6

Where equitable interest transferred separately from legal title, by s.53(1)(c ) Law of
Property Act 1925, to be valid must be in writing signed by donor or agent & such
interest transferable to 3rd party directly, by directing trustees to hold in trust for
party, by contracting assignment for valuable consid or donor declaring himself
trustee (Timson’s Executors v Yerbury (Inspector of Taxes) [1936]) & disposition
not in writing ineffective transfer (Grey v IRC [1960]) but section only relevant
where dealings in equitable interests divorced from legal ones & where beneficiary
directs trustee to transfer legal estate to another – with intention equitable estate be
transferred as well – section doesn’t apply because (i) legal title transfer includes
equitable title; & (ii) no need for additional action/ words to achieve this (Vanderell
v IRC [1967]).
7
Differences re testate/ intestate deaths

Where deceased died testate, executor(s) are appointed, by will terms, personal
representatives (PRs) but where death is intestate, absence of will means no
executor so court appoints administrator (frequently next of kin) to act as PR
following application by such person & granting of Letters of Administration
enabling him/ her to so act.
PRs’ roles
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
Collecting & bringing under control assets, payment of debts & distribution of
remaining assets to named beneficiaries who may have been given either vested or
absolute gifts or contingent or conditional ones & on deceased’s death, legal title to
estates vests in PRs (whether executors or administrators) who, as deceased’s reps,
deal with paperwork etc involved in winding up estate.
9
Requirements for valid will

By s.9 Wills Act 1837 (as amended by Admin of Justice Act 1982), will (i) must
be written/ typed; (ii) executed (=signed) by testator before 2 independent
witnesses; & (iii) witnesses must then attest (=sign) in testator’s presence & where
testator unable to sign personally, another may sign for him provided at testator’s
direction & in his presence;

By s.15, any gift to witness or spouse of witness void, will otherwise remaining
valid, testator may amend/ revoke will at any time during lifetime & revocation
occurs by later will revoking earlier, destruction of will or testator’s marriage.
Different legacy types
10

11
(i) Pecuniary legacy = gift of money; (ii) Specific legacy = particular asset to be
distinguished from other similar property &, should testator have disposed of at time
of death, gift fails; (iii) Specific devise = specific gift normally relating to land; &
(iv) Gift of residue = that left post-payment of debts/ other legacies.
Effect of gift failing

Where specific gift fails because, say, named beneficiary pre-deceases testator,
lapse occurs whereby gift fails & goes to residual beneficiary & where gift of
residue similarly fails, residue, having failed to have been disposed of by will, is
dealt with under intestacy rules, normally going to next of kin.
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REVISION NOTES W301 LAW: OWNERSHIP & TRUSTEESHIP – RIGHTS &
RESPONSIBILITIES
12
Where gift recognised as valid despite being imperfect

13
In equity, gift complete when donor has done everything he has to do & donee has
within his control that necessary to complete title (Re Rose).
Rule in Strong v Bird



14

Where creditor wishes to forgive/ release debt, oral statement ineffective release
since wasn’t under deed & legal transfer/ release must take place so that gift/ debt
properly transferred/ released by deed & this requires change of the property at law
– with gift this = vesting legal title in donee & with debt = proper release & this
achieved post-creditor/ donor’s death, where debtor is executor & proved will,
since legal effect = releasing debt & perfecting release but donee must prove (i)
donor’s continuing intention to give; & (ii) transfer of legal title/ release of
obligation;
Whilst argued that Rule applied only to debt release & not imperfect gifts, Strong
referred explicitly also to donation & equated ownership transfer to debt release so
was applicable thereto (Re Stewart [1908]) & also to administrators in intestacy (Re
James [1935);
Rule only applied to present intention of actually giving rather than intention to
give at some future time so applies only to immediate gifts (Re Freeland [1952]) &
intention must continue until donor’s death since must be clear donor’s intention/
belief was that property effectively & exclusively given to donee &, should donor
have acted in some way suggesting still owns property, then intention not
continuous (Re Gonin [1979]).
Requirements for valid gift made in contemplation of death (Donatio Mortis
Causa = DMC)
By Cain v Moon [1896], gift must (i) have been made in contemplation of (albeit
not necessarily in expectation of) death, this was matter of fact in every case &
whilst donor need not be in extremis, must be evidence of some risk justifying his
contemplation of early death (although death need not arise from cause
contemplated (Wilkes v Allington [1931])) but, where such risk exists but passes,
DMC revoked; (ii) have been delivered to donee so that post-delivery donor must
have parted with any power to control the property & must have parted with
dominion over it so that ceases to be able to alter gift in any way (Re Lillingston
[1952]); & (iii) be conditional, & only takes effect, on donor’s death (i.e. reverts to
donor if recovers) ( Cain v Moon).
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