Though Walsh v Lonsdale is authority for the proposition that contracts for the sale of land can be given effect if specifically enforceable – this does not apply to gifts, no longer does equity ‘deem done that which ought be’
The general rule is that where a donor purports to make a gift but fails to take the steps necessary, equity declines to provide a remedy in favour of the done
- These represent applications to the maxims that ‘equity does not assist a volunteer’ and ‘will not perfect an imperfect gift’
  - But the first isn’t applied for volunteers enforcing a validly establish trust under which they are beneficiary – but where a donor purports to make a gift of property and fails to take the necessary steps for transfer; equity refuses to assist
Generally applications of the principle is straight forward –
- For legal interests the legal requirements must be complied with (deliver with intent to pass possession for chattels or execute a deed of gift)
  - Failure to do so means equity will not perfect the imperfect gift
- If the donor has equitable title – the requirements of equity must be satisfied
  - In general equity is satisfied with a ‘clear manifestation of an intention to transfer an equitable interest to a done or to a trustee for the donee (Comptroller of Stamps v Howard Smith)
Some cases are more complex – what constitutes ‘imperfect’ in the circumstances in indicative. For general law land the process is outlined in Walsh v Londsdale but certain situations have legal requirements for the transfer of title involving several steps.
- In certain circumstances equity regards the gift as complete even if all the steps are not complete – in such a case the donor retains the legal interest until the steps are taken, but holds it in trust for the donee (representing an exception to the ‘equity will not assist a volunteer’ rule)
In Milroy v Lord (1862) it was held:
- Facts: Donor intended to establish a trust of shares for his niece. He executed a deed poll setting out its terms but never executed the document for transfer. The memo of association fo the company required registration for transfer to be executed.
- Law: The law is settled that in order to render a voluntary settlement valid the settler must have done everything, which according to the nature of the property in the settlement was necessary to be done in order to transfer the property and render the settlement binding
  - There are many ways to transfer property; but one of these MUST be resorted to since there is no equity in this court exists to perfect an imperfect gift.
  - Further, the court does not give effect by applying another of these modes – if transfer is used to give effect the court does not hold that the intended transfer operates by trust; since then every imperfect instrument would be made effectual by being converted int o a perfect trust
- Held: Since the donor didn’t take the first step of executing the transfer – the gift was incomplete and no assistance could be derived from equity.
Milroy v Lord was refined in Re Rose
- Facts: The donor executed documents in appropriate form transferring shares to his wife in one case and to his company secretary. The donor handed the transfers to the secretary as agent for the wife and the transferred were lodged for registration. The donor died and the questions was when the gift became complete (this was key to determining what kind of tax would apply to it)
- Held: Since the donor did everything necessary to transfer the gift, the beneficial interest in the shares passed upon execution of the transfers and handing them to the transferees; accordingly an equitable interest in the shares passed to the donees before registration.
- Lord Evershed reviewed Milroy v Lord saying that the statement that documents that intend to transfer cannot take effect as a trust is too broad
  - Though one purporting to transfer property executes documents not apt to do so a trust won’t exist, but it doesn’t flow from this that during some limited period a trust may arise giving effect to a proper transfer
  - AS per the authority of Milroy v Lord the settler did, “according to the nature of the property comprised in the settlement was necessary to be done by him in order to transfer the property” – this does not negative the conclusion that, pending registration, the settler was a trustee for the legal interest of the transferee
Re Rose illustrates that in certain cases equitable interests may pass to a donee before legal title – diminishing the ‘equity will not assist a volunteer’ proposition. It may be said that this occurs where several steps need be taken e.g.:
1. Some acts which can only be done by the donor (execution)
2. Some acts which can be done by either the donor or donee (e.g. lodgement for registration)
3. Others can only be done by third parties
In Milroy v Lord no action within neither a) or b) or c) was done; but in Re Rose it was stressed that all that was necessary by the donee was done, suggesting that gifts may be complete even if a) is done
In Anning v Anning (1907) the HCA split as to when a transfer would be effective
- Griffith CJ held it was sufficient if all acts under a) was done
- Higgins J said it was necessary for a) and b) to be done
- Isaacs J said all three had to be done
  - But in Corin v Patton (1990) the Mason, McHugh and Deane JJ preferred Griffith CJ’s approach in line with the QLD Property Law Act

Jones v Lock (1865) 1 Ch App 25

Facts: Robert Jones was an ironmonger. On returning from a business trip, asked by the nurse what he brought back for the child he put a 900 cheque into the child’s hand saying ‘look you here, I give this to baby; it is for himself...’ The wife warned that the baby would tear it and he said ‘Never mind if he does, it is his own and he may do what he likes’. He then took the cheque away and said to the nurse that he was going to put it away ‘for my own son’. Jones received this cheque in payment of a mortgage and previously informed his executor of his intention of adding 100 to the amount and investing it for his child. Shortly after he died and the cheque was found in the safe of the executor. The mother claimed against the estate on behalf of the child for 900, arguing it had been given to the child.

Lord Carnworth LC:

No doubt gifts can be conveyed through a real estate or by delivering a chattel
Authority supports that a parol declaration of trust can be perfectly valid even when voluntary – the all turn on the question “whether what has been said was a declaration of trust (enforceable) or an imperfect gift (where equity will not aid a volunteer)”
I cannot bring myself to the conclusion that Jones intended to make a declaration in trust – it would be dangerous if loose conversation of this sort in important transactions of this kind had such an effect
He commented that the evidence was clear but that it was not Jones’ meaning to enable the child, by his next friend to bring an action in trover for the cheque or file a bill for 900 – he merely meant to say that he could make provision for the boy
The testator would be surprised if he was told that at that point he parted with the 900 and could no longer dispose of it. It all turns on the facts, and here they don’t lead me to the conclusion that the testator meant to deprive himself of all the property in the note or declare himself a trustee of the money for the child.

Chrichton v Chrichton [1930] HCA – where a person applied for and paid for Commonwealth bonds in a Commonwealth loan, subsequently arranging for the bank to acknowledge that they held them in his wife’s name, the gift was held to be perfect

Corin v Patton (1990) 169 CLR 540

Facts: The respondent, Mr P, and his deceased wife were joint registered proprietors of land. When joint tenants die, the remaining joint tenants become entitled to the property through ‘survivorship. But a joint tenancy can be severed by an effective disposition of one’s interest (converting it to a tenancy in common).

Ms P did so, wishing to sever her interest from that of her husband; executing a transfer of her interest to her brother Corin. At the same time a deed of trust was executed under which C agreed to hold the property in trust for Ms P – these were both handed to Ms P’s solicitor. The land was the subject of an unregistered mortgage to the State Bank of NSW which held the duplicate certificate of title.

Ms P didn’t take steps to have the duplicate produced so that the transfer could be registered. She died shortly after execution of the transfer of the deed of trust. The HCA had to decide whether she had disposed of her interest prior to her death. Thus severing the joint tenancy.

Mason CJ and McHugh J:

After holding that there were three ways a joint tenancy could be converted to a tenancy in common (effective disposition, mutual agreement between tenants or a course of dealings evidencing the tenancy was in common) they set out the judgement of Turner LJ in Milroy v Lord and considered the conflicting approaches of Griffith CJ and Isaacs J in Anning v Anning:

Griffith CJ took the view that ‘necessary to be done’ in Milroy was used in the sense of nothing remaining to be done by the donor – but if the donee cannot establish title then the gift is imperfect
Isaacs J took the view that for any reason the transfer of the title is incomplete then equity regards it as imperfect and will not enforce...

#7350 - Acquisition Gifts - Property, Equity and Trusts 1

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