Re Brooks' Settlement Trusts
A covenant to settle property to which a person might become entitled in the future does not create a trust of that property until it is actually received.
Facts
Mr Brooks covenanted with the trustees of a marriage settlement to settle any property he received under a power of appointment in his mother's marriage settlement. Later, his mother made an appointment in his favour, and the trustees of her settlement, who were also the trustees of his own settlement, held the appointed fund. Mr Brooks argued that the fund belonged to him.
Legal principle
Farwell J held that the fund belonged to Mr Brooks, because his interest under the power of appointment was only an expectancy at the time of the covenant, and an expectancy cannot be the subject of a trust. When the fund was appointed, it belonged to him absolutely, and the covenant did not create a trust of it. The beneficiaries of his settlement were volunteers who could not enforce the covenant, and the trustees could not keep the fund for them. The case is difficult to reconcile with Re Ralli.
Related cases on formalities and constitution of trusts
- Cannon v Hartley [1949] Ch 213
- Choithram (T) International SA v Pagarani [2001] 1 WLR 1
- Fletcher v Fletcher (1844) 4 Hare 67
- Grey v IRC [1960] AC 1
- Hodgson v Marks [1971] Ch 892
- King v Dubrey [2015] EWCA Civ 581, [2016] Ch 221
- Mascall v Mascall (1984) 50 P & CR 119
- Milroy v Lord (1862) 4 De GF & J 264
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