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

This case concerned an agreement made to distribute an Equitable interest in certain company shares when the company went into liquidation. In 1969 two shareholders entered into an informal and oral agreement with one another for the liquidation of a family company and for the division of the company's equitable interest in the shares of another company in proportion to their existing shareholdings. The question arose whether the action of s.53(1)(c) of the Lpa (1925) made it invalid for lack of writing.

The court of first instance held that as there was no disposition in writing then the agreement was void under section 53(1)(c) of the Law of Property Act 1925. Therefore, since the company was struck off the register in 1970, the Crown could claim the shares as bona vacantia.

The Court of Appeal held that the agreement was valid. Their reasoning was as follows. The assignee has offered Consideration to the assignor, and hence there was a valid contract to assign the equitable interest in the shares. Because there was a valid contract, the asignee could seekspecific performance. Consequently, although the assignment had not been formalized, the assignor held the equitable interest on Constructive Trust for the assignee. s.53(2) exempts Constructive Trusts from the effect of s.53(1)(c), hence the assignment was valid.