Introduction
This essay examines whether the verbal instructions given by Catherine Fox, a terminally ill billionaire, satisfy the formalities required for the constitution of valid trusts under UK equity and trusts law. Catherine’s instructions pertain to the transfer of her controlling shares in Voom, her Mayfair penthouse, and the beneficial interest in The Radnage Estate. Each scenario will be assessed against the legal requirements for trust creation, focusing on the three certainties (intention, subject matter, and objects) and statutory formalities under the Law of Property Act 1925. The analysis aims to determine the enforceability of these verbal declarations, considering their implications in the context of equity law.
Scenario 1: Transfer of Controlling Shares in Voom to Meredith
For a trust to be validly constituted, the settlor must demonstrate a clear intention to create a trust, identify the subject matter, and define the beneficiaries (Knight v Knight, 1840). Catherine’s instruction to transfer her controlling shares in Voom to Meredith appears to show a clear intention. Moreover, the subject matter (shares) and object (Meredith) are identifiable. However, shares are a form of personal property, and under UK law, their transfer typically requires written documentation to satisfy formalities under the Stock Transfer Act 1963. Verbal instructions alone are insufficient for legal transfer. Additionally, while Catherine mentions paperwork in her roll-top desk, there is no evidence that this paperwork has been executed. Without written confirmation or transfer of legal title, this trust is unlikely to be constituted, as equity will not assist where legal formalities are incomplete (Milroy v Lord, 1862).
Scenario 2: Transfer of Mayfair Penthouse to Maggie
The second instruction involves the transfer of Catherine’s Mayfair penthouse to Maggie. Under Section 53(1)(b) of the Law of Property Act 1925, a declaration of trust concerning land or any interest therein must be evidenced in writing and signed by the settlor. Catherine’s verbal instruction, though clear in intention, subject matter, and object, fails to meet this statutory requirement. There is no indication of a written document supporting this transfer, despite references to keys and title deeds in a safe. Consequently, this verbal instruction does not satisfy the necessary formalities, rendering the trust unenforceable. Equity cannot override statutory requirements in this context, and thus, the attempted trust likely fails (Hodgson v Marks, 1971).
Scenario 3: Beneficial Interest in The Radnage Estate to Macmillan Cancer Support
Catherine’s third instruction concerns transferring a 75% beneficial interest in The Radnage Estate to Macmillan Cancer Support, while legal ownership remains with her husband Richard. As with the penthouse, this involves an interest in land, requiring written evidence under Section 53(1)(b) of the Law of Property Act 1925. The verbal nature of the instruction does not comply with this formality. Furthermore, although the intention, subject matter, and object are clear, the lack of written documentation undermines the trust’s validity. Indeed, equity prioritises adherence to statutory rules over mere intention in such cases. Therefore, this trust is also unlikely to be enforceable without written evidence of Catherine’s declaration.
Conclusion
In conclusion, Catherine Fox’s verbal instructions in all three scenarios fail to satisfy the formalities required for valid trust constitution under UK law. The transfer of shares to Meredith lacks evidence of legal title transfer, while the transfers of property interests in the Mayfair penthouse and The Radnage Estate contravene statutory requirements for written documentation under the Law of Property Act 1925. This analysis underscores the importance of adhering to legal formalities in trust creation, as equity cannot remedy deficiencies in statutory compliance. The implication for practitioners and individuals is clear: verbal instructions, however well-intentioned, are generally insufficient to establish enforceable trusts, particularly concerning land or significant personal property.
References
- Hodgson v Marks [1971] Ch 892.
- Knight v Knight (1840) 3 Beav 148.
- Law of Property Act 1925, Section 53(1)(b).
- Milroy v Lord (1862) 4 De GF & J 264.
- Stock Transfer Act 1963.
