NABILAH BINTI AB HADI

056804

Question 1:

What were the facts of the case GREY v IRC [1959] 3 ALL ER 603 HL and was compliance with sec
53(1)(c) necessary in the case?

The facts of the case in GREY v IRC are, Hunter attempted to transfer shares to his 6 grandchildren
under separate trusts because he wanted to avoid stamp duty. So he created the separate trusts
where he was the sole beneficiary. Later, he orally requested that his trustees hold his beneficial
interest on trust for his grandchildren. He understood that the term "disposition" was limited to
grants and assignments, and thus the oral disposition was not a disposition within the meaning of
section 53(1) (c) of Law of Property Act 1925. House of Lord in the case held that the oral direction
was an attempted disposition of a subsisting equitable interest and it was thus ineffective because it
was not in writing, as required by section 53(1)(c) of LPA 1925. However later, Grey had produced a
deed, confirming that the disposition had taken place and HOL held that this deed satisfied the
criterion of section 53(1)(c) of LPA 1925. A compliance with section 53(1)(c) of LPA 1925 is necessary
in the case because under the English’s position, the disposition of an equitable interest or a trust
subsisting at the time of the disposition must be in writing. So, there is statutory fomalities that must
be complied with in order for the disposition of an equitable interest to be effective. This is different
under West Malaysia, where oral declaration of the disposition of an equitable interest considered as
good same as the matter pertaining to the creation of trust. Hence in this case, the disposition of an
equitable interest in writing must be followed as to comply with the statutory fomalities of section
53(1)(c) of LPA 1925.

Question 2:

Powers can be classified in a number of ways. Explain when a power can be a trust power.

Power is a form of official authority that such power was given by the owner of property where
usually on behalf of third person. Further, trust is the one where it is properly constituted and it must
be carried out for the benefit of beneficiary. A mere power has several important characteristics that
can distinguishing it from the trust power. First, it is a power that is discretionary where the donee
may or may not exercise the power thus he is not subjected to a court action if the power of
appointment is not exercised. Second, until the donee exercises the power of appointment in favour
of the relevant objects, those relevant objects just can hope that the appointment will be in their
favour. Next, a trust power has its own important characteristics where distinguishing it from the
mere power. The first one is the trust power is imperative in nature. The imperative obligation that
impose on the trustee means that he must carry out the wishes of the settlor where he has no choice
whether or not to act. If the trustee is unable or unwilling to act, the court may replace the trustee or
intervene to carry out the settlor's wishes. It is stated earlier, that no action can be brought if the
power of appointment is not exercised under mere power, but it is different under trust power
where the beneficiaries of a trust can bring an action whenever a trustee fails to act. Second, the
important characteristic under trust power is the beneficiaries own the beneficial ownership in the
relevant property. A fixed trust is where the beneficiaries have clearly identifiable interests in the
trust property and a discretionary trust allows the trustees to select from a list of beneficiaries who
will benefit from the trust.