The (…)” He, then has to transfer

The general rulein equity held that to be valid a trust needs to be completely constitutedfollowing the rules established in the case of Milroy v Lord. In this later,Turner LJ held that: “The settlor must have done everything which (…) wasnecessary to be done to transfer the property and render the settlement bindingupon him (…)” He, then has to transfer the property to the trustee “for thepurpose of the settlement” or has to hold the trust himself, and because equitycannot perfect an imperfect trust. Indeed, an imperfect attempt to create atrust using third party as a trustee will not be interpreted as a declarationby the settlor of himself as trustee.

            Then if the settlor has failed tocreate a perfect trust, the court will not create a trust that was not intendedby the settlor. When the trust is imperfect, the intended beneficiary does notnecessarily acquire an interest in the property, as seen in Milroy.             So, if the settlor does not succeedto set up a trust property and did not comply with the requisite formalities,then the court will not intervene to save it , as seen in the case of Jones vLock.1To be perfectly constituted, the trust needs to be binding on the settlor andshould clearly define what interest are to be taken by the beneficiaries.

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Whenthe trust is not correctly established, beneficiaries have then no equitableinterest, in such circumstances, they are volunteers. A trust will not be completely constituted until thelegal title has been vested in the intended trustees. Then, it may fail if itdoes not follow the legal rules unless all the formal steps to vest theproperty in the trustee have been followed. Where there was an agreement to create a trust but there was no legaltransfer of the title, the trust is incomplete and there is no possibility toenforce it as the requirement for constituting a trust were not satisfied. InMilroy, what makes it an imperfect trust is that there was no intention for thesettlor to create a trust as the property was not vested in the name of thetransferee. Moreover, for an effective constitution of trust legal title mustbe transferred to the trustee.

In case of fraud, equity will not permit commonlaw to be used as an engine of fraud as seen in the case of La Rochefoucauld2.             The principle held in Milroy v Lord3, was beside confirmed by Jessel, in thecase of Richards v Delbridge4,that a man may transfer his property only in one of two ways : first he may dosuch acts as amounted in law to a conveyance or assignment of the property, andthus completely divest himself of the legal ownership, in which case thetransferee takes it beneficially or on trust, as the case may be, or thelegal owner may by one or other of the modes recognised as amounting to a validdeclaration of trust, constituting himself as a trustee. In the case ofRichards v Delbridge5,the court confirmed the decision in Milroy that a purposed gift will not save(or perfect) an imperfect gift by creating a trust. Thus, to be perfectly andcorrectly constituted, an express trust needs to see the settlor declarehimself a trustee of the trust  ortransfer to trustees to hold on trust, as confirmed by Lord Cranworth LC in thecase of Jones v Lock,6that if there is no valid declaration of trust to be held in favour of thetrustee, then the trust fails. Therefore, an imperfect transfer will not giverise to a valid constitution of trust.

In this case, no trust was created, as the grandfather did not  declare himself a trustee of the lease forthe grandson, therefore the court will not construe an ineffectual transfer asa valid declaration of trust as supported by Maitland7.            Consequently, as analysed byHalliwell8,the case of Milroy sets up three methods to establish a settlement, “by way ofgift, by way of transfer to trustee to hold on trust or by declaration oftrust”. Therefore, if it is not following one of those three methods, it willfail as equity does not assist a volunteer in perfecting an imperfect trust.

1Jones v Locks (1865) 1 Ch App 252 La Rochefoucauld v Boustead (1897)1 Ch 1963Ibid1 4George Jessel, in Richards vDelbridge (1874) LR 18 Eq 11 CA5 Ibid 6 Ibid 27 Frederic W Maitland, Equity :A Course of Lectures (Cambridge University Press, 1909),738 Margaret Halliwell,’Perfecting imperfect gifts and trusts: have wereached the end of the Chancellor’s foot’ (2003) Conv 192,3


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