The Law of Trusts Case Study Example | Topics and Well Written Essays - 3000 words

The Law of Trusts - Case Study slipIn 2004 Brian entered into a covenant below a trust deed with his children Pat and Richard. Pat and Richard layab come out march against Brian at law for remediation to compensate Pat and Richard for their loss of expectation if Brian does not work out his promise. In Cannon v Harley1 a father promised his daughter by deed that he would leave her any sum exceeding 1,000 which he received under his own fathers will. When he failed to do so, she successfully sued him at law for the amount she would have obtained had his promise been performed. It is important to note, however, that the same promise was not enforceable in equity. Equity will enforce promises made for consideration, but not ones whose only claim to enforcement is that they ar contained in a deed. None of the property referred to in the 2004 covenant has been transferred to Pat and Richard. Brian appointed Tony and Nathan as his executors and trustees under his will. Now the que stion arises who can enforce the covenant. If the Contract (Rights of Third Parties) Act 1999 were to apply to covenants (which is doubtful) then presume the requirements of the Act were satisfied, Pat and Richard would be able to enforce the covenant at law and obtain damages for lost expectation. It can be argued that they hold the benefit of the right to sue on the covenant on trust for Pat and Richard. If this argument, the trust of the covenant argument, can be made out, then Pat and Richard can compel Tony and Nathan to sue Brain. The assumption is that Tony and Nathan would recover substantial damages, which they would then hold on trust for Pat and Richard. There ar trine difficulties, which stand in the way of this argument succeeding. To be a valid trust, it is necessary three certainties, formalities, and perfect constitution. A trust will be perfectly constituted where the rights, which are to form the overmatch matter of the trust, are vested in the intended trustee . The principle laid down in the case Milroy v Lord2, Lord Turner LJ explained three ways of benefiting third parties. The easiest way to benefit the third party is by an outright gift. If the Beneficiary is minor and a gift is a real property then it is not possible. In this situation, he needs to create a trust or declare himself as a trustee. The transfer to the trustees must accord with the rules applicable to the property concerned. Legal estates in land must transfer of training by deed, equitable interest, and copyright by writing (which may include an electronic document), chattels by deed of gift or by an intention to give coupled with a delivery of possessions, a handbill of exchange by endorsement, and shares by the appropriate form of transfer followed by registration. The traditional approach withal adopted in subsequent cases like Re Fry3, required all stage should be completed. However, if the settlor wants to twist a trustee himself he must declare it in clear an d unequivocal terms, which carry out mans intention.