(1997) 94(34) LSG 27; Times July 28 1997 (CA).

Facts:

A company  went into liquidation and there was an agreement made to distribute the equitable interest in the company shares. The agreement was made informally ( not in writing) and the question arose whether the agreement should be rendered void due to lack of compliance  to S53(1) c of Law of Property Act 1925 which requires that all “disposition of equitable interest” must be done created in writing.

Held : (CA )

It was held that the agreement was valid because the assignee has offered consideration to the assignor, and hence there was a  specifically enforceable contract to assign the equitable interest in the shares. .Although the assignment had not been formalized, a constructive trust arose in favour of the assignee. By virtue of S53(2) constructive trusts are exempted from the writing requirement of  s.53(1)(c), hence the assignment was valid.

c/f: Oughtred v IRC