Gifts

Hello. My name is Gary Watt. I'm a Professor in the law school at the University of Warwick and the author of some books for Oxford University Press on trusts and equity. I'm doing these very short taster videos just to give you an idea of how I approach complex topics in the law of trust and equity. And my basic approach is to try and simplify complexities by producing a very helpful image, or a picture, or a symbol, that will just get you to see the whole picture in a small image.

So, we’ve used bananas in other videos, and rulers—you can look at all of those; I hope you do. What I'm going to do now is start with a phone. And this is just to do a little bit of acting but hopefully you'll remember it this way. So I'm going to ring a friend, and I'm going to make them a promise.

‘Hello... Hello, is this Joe? Oh, hi, Joe. It’s Gary here. Happy birthday! Yeah, I've got you a present. I'm going to bring it around later, okay? Are you going to be in? Okay, I'll pop round just in about an hour or so. Okay, all right, happy birthday, see you soon.’

Okay. Well, I have got a nice present for Joe, but I'm not going to give it to him. I promised, but I'm not going to deliver. Now does that sound bad? It might be morally bad. It might be a little bit mean. But law will not make me complete my gift to Joe, because Joe hasn't paid for it. If there was a contract, that would be different, but it was a voluntary promise, he gave me nothing, and therefore he can sue me for nothing.

Now, there is a principle that applies to all gifts—the principle I've just described—it’s the principle that equity will not assist a volunteer, someone who is the beneficiary of a merely voluntary promise. It applies to trusts also. But, this very strong principle, that the law will not take property from your hands—that equity will not take property from your hands unless you actually deliver the gift or execute a formal deed to deliver the gift, to transfer the gift—this very strong principle has been diluted in some significant cases.

Now I just want to mention one, and this is the case of Pennington v Waine [2002]. It takes a big part of the chapter where I look at constitution of trusts. This case of Pennington v Waine [2002] was a case where an old lady went to see her accountant, shall we say, and said, ‘I would like to pass on some shares to my nephew.’ She filled in the forms, they were left with her agent—with her accountant, auditor—but she died before she could actually completely transfer this gift. So the question was, a bit like the telephone conversation, well she wanted to, but she didn't. Will the law now take the property from her dead hand to give it to her nephew?

I don't know what you think about that. I'm a little bit suspicious of the court taking my property from me when I'm dead. I really ought to make that choice for myself when I’m alive. If I don't quite complete it, maybe that's just my problem. It might seem that the court is trying to do you a favor by completing an intention that you didn't act upon. We'll have to ask ourselves whether we are happy for the court to do that, but I am saying that that's what happened in Pennington v Waine [2002], this court of appeal case. The court decided that the old rule—equity should not assist a volunteer—might be displaced by a new principle, and the principle being equity should not strive officiously to defeat a gift. And so they did pass on that property from the dead lady, from her estate, to her nephew, even though she hadn't delivered the gift.