Equity and the Volunteer Maxim

Introduction

The maxim “equity does not assist a volunteer” captures a core rule in equity and trusts. A person who gives no consideration (a volunteer) cannot ask a court to perfect an imperfect gift or an unconstituted trust. In practical terms, if a donor or settlor has not completed all required steps to pass title, equity will not step in to finish the job for a volunteer.

This matters whenever someone tries to make a gift or set up a trust. To create a valid trust you need the three certainties (intention, subject matter, and objects) and proper constitution. Constitution usually means the legal title to the trust property has moved to the trustees, unless the settlor has clearly declared themself a trustee. Where the transfer is incomplete, the general rule is that the arrangement fails against a volunteer.

There are, however, well‑known exceptions and workarounds, especially where the donor has done all they reasonably can, the donee later acquires legal title through the estate, or the donor is one of the trustees. Key cases include Milroy v Lord, Jones v Lock, Strong v Bird, Re Rose, T Choithram International SA v Pagarani, Pennington v Waine, and Re Ralli’s Will Trusts. This guide sets out the rule, the exceptions, and how to apply them in practice.

What You'll Learn

• What counts as a “volunteer” and why consideration is decisive
• The main rule: equity will not perfect an imperfect gift or unconstituted trust
• How to constitute a trust and the difference between transfer to trustees and self‑declaration
• The conditions for key exceptions: Strong v Bird, Re Rose, Pennington v Waine, and Choithram
• How Re Ralli’s Will Trusts operates when title fortuitously reaches the trustee
• When volunteers can and cannot obtain equitable remedies
• Practical steps to get gifts and trusts over the line for shares, land, chattels, and bank accounts

Core Concepts

Who is a volunteer and why it matters

• A volunteer is someone who has given no value in return. Typical examples are donees of gifts and beneficiaries under voluntary trusts.
• Consideration can be nominal but must be real. Marriage consideration in traditional marriage settlements counts as value; a purely voluntary covenant does not.
• The consequence: equity refuses to “complete” the transfer for a volunteer. If title has not moved and no valid declaration of trust has been made, the claim generally fails.

Related maxims often quoted alongside the rule:

• Equity will not perfect an imperfect gift.
• Equity will not treat as done that which ought to be done.

Constituting gifts and trusts

• Gifts: require intention and transfer of title (by delivery for chattels, assignment/registration for intangibles, deed/registration for land). Mere words of gift usually do not create a trust.
• Trusts: need the three certainties plus constitution.
  • Transfer to trustees: the settlor must complete every step necessary to vest legal title in the trustees.
  • Self‑declaration: the settlor can declare themself a trustee of the property, which avoids the need to transfer title to another person, but the declaration must be clear.
• Key rule from Milroy v Lord [1862]: you cannot rescue a failed transfer by re‑labelling it as a trust after the event. If the chosen method fails, the attempt fails.

Typical failures:

• Jones v Lock [1865]: telling a baby “I give you this cheque” without transfer formalities did not create a trust.
• Richards v Delbridge (1874): a note on a lease stating it was given to a child was not an effective assignment or trust.

Note on formalities:

• Trusts of land must be evidenced in writing: s.53(1)(b) Law of Property Act 1925.
• Dispositions of existing equitable interests must be in writing: s.53(1)(c) LPA 1925.

Recognised exceptions to the volunteer rule

1. Strong v Bird (executor/administrator rule)

   • If the donor intended to make a present gift (or to release a debt), maintained that intention until death, and the intended donee later becomes the donor’s executor (or administrator), the imperfect gift is completed upon the donee obtaining legal title via the estate.
   • Extended to imperfect lifetime gifts (Re Stewart [1908]) and to administrators (Re James [1935]).
   • It is not a cause of action; it allows the donee to keep the property if legal title vests through the office of personal representative.

2. Re Rose (the “every effort” principle)

   • If the donor has done all they reasonably can to transfer the property (e.g., executed proper stock transfer forms and delivered them to those who must act), equity may treat the transfer as effective from that date, even if registration by a third party happens later.
   • Contrast Re Fry [1946], where the donor had not obtained the necessary Treasury consent; not all steps had been taken, so the gift failed.

3. Pennington v Waine (unconscionability)

   • The Court of Appeal enforced a share gift in equity despite incomplete steps, based on unconscionability. Later cases urge caution; do not rely on Pennington unless facts are very strong (e.g., Zeital v Kaye [2010] shows the limits).
   • Safe practice is to satisfy Re Rose rather than bank on Pennington.

4. Choithram (donor is a trustee)

   • In T Choithram International SA v Pagarani [2001], a donor who was one of the trustees said he gave property to a charity. The Privy Council treated this as a valid declaration of trust: equity would not “strive officiously to defeat a gift” when the donor could vest title in himself as trustee and then to co‑trustees.

5. Re Ralli’s Will Trusts (fortuitous constitution)

   • If trust property later comes into the hands of the intended trustee through another route, the trust may be treated as constituted at that point, even though the original route failed. The focus is on whether title is with a trustee, not how it got there.

Volunteers and equitable remedies

• Specific performance is usually unavailable to volunteers on a bare covenant to settle property. Classic line of authority includes Re Pryce [1917] and Re Kay’s Settlement [1939], where the court would not order performance at the request of a volunteer beneficiary.
• A party who gave consideration (e.g., the covenantee) may have better prospects, especially if the covenant is by deed or part of a contract.
• A volunteer can still benefit where an exception applies (e.g., Re Rose timing, Strong v Bird completion, or Choithram where the donor is a trustee).
• Practical point: a clear self‑declaration of trust by the intended settlor avoids most volunteer problems, provided any statutory writing requirements are met.

Key Examples or Case Studies

• Milroy v Lord (1862) 4 De G F & J 264

  • Facts: Settlor attempted to transfer bank shares to a trustee for a niece but did not complete formalities.
  • Held: No trust; equity will not perfect an imperfect gift. You cannot convert a failed transfer into a trust afterwards.
  • Use: Make sure you adopt and complete the correct method from the outset.

• Jones v Lock (1865) LR 1 Ch App 25

  • Facts: Father placed a cheque in a baby’s hand, saying it was for the child; no proper transfer.
  • Held: No valid gift or trust. Loose words of gift do not create a trust.
  • Use: For gifts of choses in action, follow formal assignment/transfer rules.

• Strong v Bird (1874) LR 18 Eq 315; Re Stewart [1908] 2 Ch 251; Re James [1935] 1 Ch 449

  • Facts: Imperfect gifts or debt releases; donee later appointed executor/administrator.
  • Held: If a continuing intention existed until death and the donee becomes personal representative, the gift is perfected when legal title vests.
  • Use: As an estate practitioner, check whether this rule lets a donee keep property that was imperfectly given in life.

• Re Rose [1952] Ch 499; Re Fry [1946] Ch 312

  • Facts: Share transfers where donor’s steps were complete (Re Rose) vs incomplete (Re Fry).
  • Held: Re Rose—equity treated the transfer as effective once the donor had done all within their power. Re Fry—failure, as not all necessary consents had been obtained.
  • Use: For shares, execute and deliver the correct transfer forms and send them to the company/registrar.

• Pennington v Waine [2002] EWCA Civ 227

  • Facts: Share transfer where the donor’s steps were incomplete; donee took actions relying on the gift.
  • Held: Enforced on unconscionability grounds.
  • Use: Treated cautiously; later cases restrict it. Aim to satisfy Re Rose instead.

• T Choithram International SA v Pagarani [2001] 1 WLR 1 (PC)

  • Facts: Donor declared a gift to a charity of which he was a trustee; not all transfers to co‑trustees were made.
  • Held: Valid—treated as a self‑declaration of trust; the donor as trustee could perfect the trust.
  • Use: If the donor is (or can become) a trustee, a clear declaration of trust can avoid transfer pitfalls.

• Re Ralli’s Will Trusts [1964] Ch 288

  • Facts: Property later came into the hands of the intended trustee via another arrangement.
  • Held: Trust treated as constituted when the trustee held legal title, even though the original route failed.
  • Use: Focus on whether the trustee now holds title; the route may not matter.

Practical Applications

• Choose the right method at the start

  • For a trust with separate trustees: transfer legal title to those trustees using the required formalities for the asset type.
  • If the settlor is willing to act as trustee: use a clear self‑declaration of trust (and comply with any writing requirements, e.g., for land).

• Get the formalities right by asset class

  • Shares: execute stock transfer forms; deliver them with share certificates; arrange board approval/registrar updates or CREST where applicable; secure confirmation of registration.
  • Land: transfer by deed (LPA 1925 s.52) and register the disposition at HM Land Registry; trusts of land require written evidence (s.53(1)(b) LPA 1925).
  • Chattels: deliver the item with intention to gift, or use a deed of gift if delivery is impractical.
  • Bank accounts and debts: use proper assignment (ideally compliant with s.136 LPA 1925) or novation where required.

• Build in an exception where possible

  • Re Rose: ensure the donor has done everything within their power—sign the forms, deliver them to the company/registrar, and retain proof of delivery.
  • Choithram: if appropriate, appoint the donor as one of the trustees and obtain a clear declaration of trust.
  • Strong v Bird: in probate work, check for a continuing intention to gift or release a debt and whether the donee became the personal representative.

• Avoid relying on uncertain routes

  • Pennington v Waine is risky. Unless facts indicate it would be unconscionable to retract, complete all formalities instead.
  • Do not assume a failed transfer can be recast as a trust after the event (Milroy v Lord and Jones v Lock stand firmly in the way).

• Covenants to settle property

  • To make a covenant enforceable, use a deed or ensure consideration flows to the covenantee. Do not expect a volunteer beneficiary to obtain specific performance.
  • Where property happens to reach the trustee later (as in Re Ralli’s), consider if the trust is now constituted.

• Risk management for practitioners

  • Use completion checklists and document trails: board minutes, registrar confirmations, delivery receipts.
  • If time‑sensitive, execute a deed of trust to hold on bare trust pending registration.
  • For family arrangements, avoid informal promises; either complete the transfer or document a present declaration of trust.

Summary Checklist

• Define the parties: is the claimant a volunteer or a purchaser for value
• Confirm the method chosen: transfer to trustees or self‑declaration
• Check the three certainties and any statutory writing requirements
• Ask whether title has been transferred; if not, the general rule bars volunteers
• Consider exceptions:
  • Strong v Bird: continuing intention and donee as personal representative
  • Re Rose: donor has done all within their power; third‑party registration outstanding
  • Pennington v Waine: only in rare, unconscionable cases
  • Choithram: donor is a trustee and has declared a trust
  • Re Ralli’s: title later reaches the trustee by another route
• For covenants, ensure a deed or consideration; do not expect specific performance for volunteers
• Record every step and obtain confirmations for share and land transfers

Quick Reference