Equity & Trusts - Imperfect Gifts

As a general rule equity will not assist a volunteer and this is a principle that first originates from Turner LJ in Milroy v Lord [1862] who pointed out that “for then every imperfect instrument would be made effectual by being converted into a perfect trust”.

An exception to this does exist in the case in of Re Rose [1952] where it was held that the equitable interest will pass where the transferor does everything necessary to make the gift. This was given a more precise interpretation in Pennington v Waine [2002] where it was said that the transferor should not be able to take back the gift even if they wanted to.

Another exception is donatio mortis causa which translates from the Latin as ‘gift on the occasion of death’. The death in question has to be imminent such as where a person is on their death bed, has been in a serious accident or is about to undergo a major operation. It also has to be clear about who the gift is for and an intention to give up dominion has to be signified as in Wilkes v Allington [1931] and Sen v Headley [1991].

Another exception is that when a debtor is appointed as an executor of the estate of the person to whom he owed the money then that debt is discharged. This is known as the rule in Strong v Bird [1874] and can also be used to complete an incomplete gift as per Re Stewart [1908].

Proprietary estoppel is not really an exception but rather provides compensation to people who relied on a representation to their detriment. The classic example of this is Pascoe v Turner [1979]