In the law of equity and trust, S53(1)(b) and S53(1)(c) of Law of Property Act 1925(LPA 1925) play
an important role. They established the requirements for the creation of trusts and equitable
interests disposition in writing. This essay aims to describe the two statutory provisions and discuss if
there are any exceptions to the criteria or circumstances when other indications will be utilised as to
analyse their powerful position.
The creation of a trust in respect to land is covered under S53(1)(b) LPA 1925. The creation of
personal trust does not require any formalities. Subsection (b) laid down the requirement of a signed
written document but non-compliance has no bearing on the trust's validity but rather the trust will
be valid but unenforceable. It's worth noting that writing requirement isn't strict; as long as there's
some form of written evidence, the provision is met. In the cases of McBlain v Cross and Childers v
Childers, telegram and letter are sufficient. The trust can even be written subsequently and it will
work retrospectively, making it enforceable from the date of the oral declaration rather than the date
of the document as per Foster v Hale.
However, as to the document's retrospective effect, it's suggested that written document not an
accurate representation of when the trust was established or who owns the property. When the
written requirement is later met, all benefits accrued prior to the date of the written document will
belong to the intended beneficiary. As a result, it cannot be said that the beneficiary received benefits
under the trust because of the document rather the real indications appear to be the settlor's oral
declaration and intention. Nonetheless, it should be highlighted that written documents are
important because their absence would indicate that the intended beneficiary would receive nothing.
Therefore, still a powerful indication.
Nonetheless, "equity will not allow the statute to be used as a tool of fraud" and there may be a
situation where a transferee obtains a land transfer from the transferor on the basis of an oral
agreement to hold the land on trust for a beneficiary or the transferor himself and then refuse to
perform the trust, claiming that there can be no enforceable trust without a written document. He
can now enjoy the property because he has the legal title. As a result, in Rouchefoucould v Boustead,
the courts held that oral evidence was sufficient to establish a valid and enforceable trust. Following
this decision, it can be confidently assumed not only written and signed evidence indicate a valid
trust and the beneficial interest can go to the beneficiary but also the oral evidences can be sufficient
too.
Bannister v Bannister and Paragon Finance v Thakerar found that constructive trust can be imposed
even if only oral evidence exists to prevent unjust enrichment and unconscionability (detrimental
reliance). As a result, whereas s53(1)(b) LPA 1925 prohibits the use of parol evidence to prove an
orally declared trust, s53(2) LPA 1925 can be used to avoid the signed written requirement of trust.
Thereoref, while s53(1)(b) is a powerful indication, the courts appear to have developed certain
situations in which exceptions apply to move away from the indication.
S53(1)(c) LPA 1925, on the other hand, is concerned with the formalities of equitable interest
disposition and applies to all properties, involving land and others. In the event of dispose the
subsisting beneficial interest under a trust it also requires a written and signed agreement. In
comparison to s53(1)(b), this is far more greater indication that non-compliance will result in a void
disposition.
There must be documents in cases of assignment of interest as well as direction to trustee to hold on
trust for another, as in Grey v IRC. Hence , it is apparent that this provision serves as a strong signal
that when equitable interest is passed to another, the holder of interest can be identified by
regarding the documents.
Another situation is that a declaration by an equitable owner of himself as a trustee, which can be
divided into two scenarios. If the original beneficiaries are removed from the picture as a result of the
disposition, s53(1)(c) LPA 1925 applies since it amounts to disposition as per Grainge v Wilberforce.
Although, as per Nelson v Greening & Sykes, even if it is practicable to abandon original beneficiary, it
can’t be insist. Under Saunders v Vautier, it appears that beneficiary/sub-trustee drops out by
an important role. They established the requirements for the creation of trusts and equitable
interests disposition in writing. This essay aims to describe the two statutory provisions and discuss if
there are any exceptions to the criteria or circumstances when other indications will be utilised as to
analyse their powerful position.
The creation of a trust in respect to land is covered under S53(1)(b) LPA 1925. The creation of
personal trust does not require any formalities. Subsection (b) laid down the requirement of a signed
written document but non-compliance has no bearing on the trust's validity but rather the trust will
be valid but unenforceable. It's worth noting that writing requirement isn't strict; as long as there's
some form of written evidence, the provision is met. In the cases of McBlain v Cross and Childers v
Childers, telegram and letter are sufficient. The trust can even be written subsequently and it will
work retrospectively, making it enforceable from the date of the oral declaration rather than the date
of the document as per Foster v Hale.
However, as to the document's retrospective effect, it's suggested that written document not an
accurate representation of when the trust was established or who owns the property. When the
written requirement is later met, all benefits accrued prior to the date of the written document will
belong to the intended beneficiary. As a result, it cannot be said that the beneficiary received benefits
under the trust because of the document rather the real indications appear to be the settlor's oral
declaration and intention. Nonetheless, it should be highlighted that written documents are
important because their absence would indicate that the intended beneficiary would receive nothing.
Therefore, still a powerful indication.
Nonetheless, "equity will not allow the statute to be used as a tool of fraud" and there may be a
situation where a transferee obtains a land transfer from the transferor on the basis of an oral
agreement to hold the land on trust for a beneficiary or the transferor himself and then refuse to
perform the trust, claiming that there can be no enforceable trust without a written document. He
can now enjoy the property because he has the legal title. As a result, in Rouchefoucould v Boustead,
the courts held that oral evidence was sufficient to establish a valid and enforceable trust. Following
this decision, it can be confidently assumed not only written and signed evidence indicate a valid
trust and the beneficial interest can go to the beneficiary but also the oral evidences can be sufficient
too.
Bannister v Bannister and Paragon Finance v Thakerar found that constructive trust can be imposed
even if only oral evidence exists to prevent unjust enrichment and unconscionability (detrimental
reliance). As a result, whereas s53(1)(b) LPA 1925 prohibits the use of parol evidence to prove an
orally declared trust, s53(2) LPA 1925 can be used to avoid the signed written requirement of trust.
Thereoref, while s53(1)(b) is a powerful indication, the courts appear to have developed certain
situations in which exceptions apply to move away from the indication.
S53(1)(c) LPA 1925, on the other hand, is concerned with the formalities of equitable interest
disposition and applies to all properties, involving land and others. In the event of dispose the
subsisting beneficial interest under a trust it also requires a written and signed agreement. In
comparison to s53(1)(b), this is far more greater indication that non-compliance will result in a void
disposition.
There must be documents in cases of assignment of interest as well as direction to trustee to hold on
trust for another, as in Grey v IRC. Hence , it is apparent that this provision serves as a strong signal
that when equitable interest is passed to another, the holder of interest can be identified by
regarding the documents.
Another situation is that a declaration by an equitable owner of himself as a trustee, which can be
divided into two scenarios. If the original beneficiaries are removed from the picture as a result of the
disposition, s53(1)(c) LPA 1925 applies since it amounts to disposition as per Grainge v Wilberforce.
Although, as per Nelson v Greening & Sykes, even if it is practicable to abandon original beneficiary, it
can’t be insist. Under Saunders v Vautier, it appears that beneficiary/sub-trustee drops out by
