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Re Rose Revisited
Published online by Cambridge University Press: 09 November 2009
Extract
The case of Re Rose, Rose v. I.R.C. is a well-known authority for the significance of the last act; equity treats a gift as complete where the donor has done all in his power to divest himself of the property, and to vest it in the transferees. The Court of Appeal followed a first instance decision, Re Rose, Midland Bank Executor and Trustee Co., Ltd. v. Rose, whose similar name was purely coincidental. In the earlier case, the unusual provisions of a will made it necessary for one Hook to argue that the transfer of preference shares had taken effect prior to the death of the testator. Jenkins J. held that it had, although registration of the transfer by the directors did not occur until later, because the testator had done all he could to transfer the shares before his death. Midland Bank v. Rose was approved, obiter, by Lord Wilberforce in Vandervell v. I.R.C. In Mascall v. Mascall, it was expressly argued that Rose v. I.R.C. was wrongly decided, but the authority of the earlier Court of Appeal decision was upheld, so there is little doubt that what has been called “the Rule in Re Rose” is correct.
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References
1 [1952] Ch. 499.
2 [1949] Ch. 78.
3 Under the will. Hook was entitled to the shares only if they had “not been transferred to him previously to [the testator's] death”. The residuary legatee argued that there was only an incomplete or inchoate gift by the time of the testator's death, which triggered the proviso but also prevented Hook acquiring the shares inter vivos: see [1949] Ch.78, 88–89, and the fuller explanation of Evershed M.R. [1952] 1 Ch. 499, 511.
4 [1967] 2 A.C. 291, 330.
5 (1984) 50 P. &C.R. 119.
6 E.g., Parker, & Mellows, , The Modern Law of Trusts, 6th ed., by Oakley, A.J., (1994), p. 64.Google Scholar
7 [1952] 1 Ch. 499, 510–511, per Evershed M.R., 518, per Jenkins L.J.; Morris L.J. agreed with both judgments.
8 Indeed, it is now clear from Westdeutsehe Landesbank Girozentrale v. Islington L.B.C. [1996] A.C. 669, 705C–F, that conscience is the basis of all trusts, whether or not constructive.
9 A point made by Jenkins L.J. [1952] 1 Ch. 499, 515.
10 In the earlier case, Midland Bank v. Rose, the transfer was executed by the testator in August 1944, but not registered by the company until March 1946.
11 [1996] A.C. 669, 706H–707E.
12 [1948] Ch. 465. This analysis of Re Diplock implies that Millett J., as he then was, was wrong in Tracing the Proceeds of Fraud (1991) 107 L.Q.R. 71. 81, where he argued that the volunteer would be a trustee in the full sense.
13 Section 38(2) of the Customs and Inland Revenue Act 1881, as amended by the Customs and Inland Revenue Act 1889 s. 11, made duty payable on transfers by the testator within twelve months of his death, whether by declaration of trust or otherwise, and also on any transfer made at any time, if the donor retained any interest in the property.
14 [1949] Ch. 78.
15 [1946] 1 Ch. 312.
16 Under Regulation 3A of the Defence (Finance) Regulations 1939, Statutory Rules and Orders No. 1254 of 1940.
17 As Romer J. observed: [1946] 1 Ch. 312, 319.
18 [1949] 1 Ch. 78, 89.
19 [1949] 1 Ch. 78, 88.
20 See note 9 above.
21 In Richards v. Delbridge (1874) L.R.Eq. 11, 14, the test for declaration of trusteeship was for the would-be trustee to evince an intention to deal with the property in such a way “as to deprive himself of his beneficial ownership, and to declare that he will hold it for that time forward on trust for the other person”. We would suggest that that should also be the appropriate test here, and it clearly suggests an irrevocable commitment.
22 (1984) 50 P. & C.R. 119. See note 5 above.
23 The general duties of the Chief Land Registrar are set out in ss. 126–127 of the Land Registration Act 1925. See also generally, Gray, , Elements of Land Law, 2nd. ed., (1993), p. 170.Google Scholar The whole tenor of Browne-Wilkinson L.J.'s judgment in the latter case was that the plaintiff could do nothing to prevent the transfer going ahead: (1984) 50 P. & C.R. 119, 128.
24 [1952] 1 Ch. 499, 506–507. The other transfer was said to be in consideration of 10 shillings, which would be regarded as consideration in equity; nor would it matter if the consideration was not actually paid, on the view taken by Browne-Wilkinson L.J. in Museali v. Museali (1984) 50 P. & C.R. 119, 126, since the expression in the instrument would preclude the donor from denying that consideration had been received. This is also a possible justification for the decision in the later case.
25 Otherwise there would have been a complete transfer in equity in Milroy v. Lord (1862) 4 De G.F. & J. 264, where the transfer was also expressed to be for the love and affection of the transferee.
26 [1952] 1 Ch. 499. 506. He also observed, at p. 513, that this cast doubt on whether the settlement could truly be said to be voluntary.
27 As in Pullan v. Koe [1913] 1 Ch. 9.
28 See note 24 above.
29 See, e.g., the explanation in Parker, & Mellows, , The Modern Law of Trusts (n. 6 above) pp. 64–65.Google Scholar
30 [1967] 2 A.C. 291, 330. See note 4 above.
31 See note 13 above.
32 [1996] 4 All E.R. 630, 637h–j, citing what was then the most recent edition of Megarry, and Wade, , The Law of Real Property, 5th ed., (1984), p. 602.Google Scholar
33 [1960] A.C. 206.
34 Ibid., at p. 240. Lords Denning and Keith of Avonholm preferred to base their reasoning on lack of compliance with s. 53(1)(c) of the Law of Property Act 1925, so that the oral sale contract was ineffective to pass any equitable title at all.
35 In Lloyds Bank plc v. Carrick itself, the purchaser had paid the entire purchase price and gone into occupation, so that all that remained to do was to transfer the bare legal title. Morritt L.J. (citing Bridges v. Mees [1957] Ch. 475) expressed the view that in these circumstances the vendor held on bare trust for the purchaser, thereby implying that Mrs. Carrick had a full beneficial interest even prior to the conveyance: [1996] 4 All E.R. 630, 637h. That is not analogous to Rose v. I.R.C., where Mrs. Rose had also undertaken unlimited liability, so that it could not be said that all that remained to be done was the transfer of legal title.
36 (1862)4 DeG.F. & J. 264.
37 [1951] 2 All E.R. 959.
38 See note 21 above.
39 E.g., George Jessel, M.R. Sir in Richards v. Delhridge (n. 21 above) p. 15Google Scholar: “… for a man to make himself a trustee there must be an expression of intention to become a trustee, whereas words of present gift shew an intention to give over property to another, and not to retain it in the donor's own hands for any purpose, fiduciary or otherwise”.
40 [1952] Ch. 499, 509.
41 [1951] 2 All E.R. 959, 962.
42 [1952] Ch. 499, 510, per Evershed M.R., 517, per Jenkins L.J.
43 (1984) 50 P. & C.R. 119, 123 and 124.
44 See note 11 above.
45 E.g., Walsh v. Lonsdale (1882) 21 Ch.D. 9.
46 This is an application of the equitable notice doctrine, but is unaffected by the 1925 legislation since there is no purchaser for value.
47 [1948] Ch. 465.
48 [1996] 2 All E.R. 961, 990b.
49 National Provincial Bank Ltd. v. Ainsworth [1965] A.C. 1175.
50 [1994] 1 A.C. 180.
51 See especially the views expressed by Dixon and Harpum [1994] Conv. 421, 423, in their reply to Thompson [1994] Conv. 140. See also Sparkes [1995] Conv. 250.
52 This was at any rate the basis of Lord Jenkins' reasoning (n. 34 above, and text thereto).