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William Buck and Jen Coyne, led by Clare Stanley KC and instructed by Tom Bolam and Cecilia Ricks at Fladgate LLP, acted for the First Appellant in this important appeal on the application of vendor-purchaser constructive trusts and the disposal of beneficial interests in personal property.
The case concerned whether a beneficiary may dispose of his entire beneficial interest in personal property (shares) to the trustee legal owner orally, or conversely whether s. 53(1)(c) of the Law of Property Act 1925 (“LPA 1925”) prevents disposal without signed writing.
The Supreme Court has held that a vendor-purchaser constructive trust of scintilla temporis arises between the beneficiary and trustee, which itself effects the disposal of the beneficial interest (rather than providing interim protection and giving rise to a right to apply for specific performance to convey such beneficial interest) (§§30-36). By s. 53(2), because the disposal is by way of constructive trust, it falls outside the scope of s. 53(1)(c) LPA. The agreement may be made orally.
The Supreme Court also confirmed, dismissing the Respondents’ application for permission to cross-appeal, that s. 53(1)(c) LPA is not confined solely to equitable interests in land, but applies to personal property.
Judgment is available here.