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Eployment Law

Why are there any special formalities for the creation of trusts and dispositions of interests thereunder? Is the present position satisfactory?

While declarations of trust in personalty can be made orally, under the present law creation of trust of land and those under a will as well as any dispositions of equitable interest have to be either in writing or evidenced in writing ( s.53 Law of Property Act 1925 and s.9 Wills Act 1837). The general aim behind the formality requirements, like in contracts, is to serve as a caution to those declaring a trust or disposing of an interest under one. The need for writing also serves an important evidentiary purpose. Firstly it makes fraud more difficult and secondly it helps avoid administrative problems by recording the duties of trustees so as to enable them to exercise them properly and in compliance with the trust. More specific aims behind the formalities in declaration of trust for land is the uniqueness of land and the overwhelming need for certainty in realty. As far as dispositions of equitable interest are concerned, evidence is needed since it often is the only indicator of where a particular right resides at any given time. As wills take effect upon the death of a testator/trix it essential that their wishes are know with precision. Hence writing enables the executor of the will to administer it according to the deceased's intentions. However as case demonstrate the formality requirements are not always satisfied. The courts have been faced therefore often with difficult scenarios where there are evidence of the intentions of a party, but only an oral agreement exists. Hence in taking a more facilitative approach and giving effect to such trusts/ dispositions the courts have significantly undermined the statutory formalities provisions. This could by no means be seen as a satisfactory state of the law. But as shall be demonstrated the cases have often involved very complex situations and difficult...

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