We have a client who gifted some valuable paintings to his daughter in the early 1980s. This was done by a deed of gift which states that ‘the Assignor hereby assigns unto the Donee the pictures in the Schedule, hereto to hold the same unto the donor absolutely’ and then ‘the Assignor hereby irrevocably declares that he holds the said pictures as Trustee for the Donee until the Donee attains the age of majority’
The daughter has since turned 18, but the paintings remain in the client’s house.
The disposition was pre FA1986, so fortunately there is not a GROB issue.
The question is whether the deed of assignment is sufficient to transfer ownership to the daughter? I think it is, because in principle chattels can be transferred by a deed of assignment OR by delivery (both is not necessary). However, a colleague take the view that delivery at 18 may have been necessary to complete the gift in accordance with the terms of the deed.
Originally the only method of perfecting a gift of a chattel was by delivery of possession but it has long been settled law that a valid deed is effective: Cochrane v Moore (1890) 25 QBD 57 at pp 65-72 cited in The Law of Personal Property by Bridge and others, Sweet & Maxwell. A valid declaration of trust is also effective.
Of course it is theoretically dangerous to leave the donor in possession. Although the donee has a right to call for possession, and has proprietary remedies such as following and tracing, there always lurks the purchaser for value without notice, leaving only personal remedies.
Indirect statutory recognition of a deed as a mode of transfer of property in goods is.1(2)(d) Supply of Goods and Services Act 1982, excluding a transfer by deed from coverage.