Three certainties notes


Parkinson 'Reconceptualising the express trust' 20

Widespread agreement that trusts are a property right. Two propositions are fundamental- 1) there is separation of legal and equitable title 2) for a trust to exist there must be trust property. Author thinks it is better understood as a species of obligation rather than proprietary. 

It is clear the beneficiaries under discretionary trusts do not gain proprietary interests. Will be many discretionary trusts where Saunders v Vautier will not work as the class is not closed etc. Impossible to say where the beneficial interest lay in Baden Trusts No.2. Another example of a legal estate being held on trust without an equitable right being located elsewhere was Re Denleys Trust where it was upheld to provide a sports ground for employees. Goff saw no infringement of the beneficiary principle in a situation where there are direct or indirect beneficiaries of the trust. This has been contraversial. Difficult to see how theres an equitable interest as they couldnt wind it up and that the trustees could invite people to use it means there wasnt an indentifiable group. 

It is possible that the Quistclose trust will come to be understood as an umbrella term for a variety of trusts concerned with the limitations of equitable character placed on the use of money by lenders and which do not always share the same structural characteristics. 

The core idea lies in the notion of equitable obligations in relation to property.

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Parkinson 'Reconceptualising the express trust' 20

In most cases this will give the beneficiary property rights in equity. 

Requirement of trust property- so ownership and obligation can be clearly distinguished. Author argues that there is no need for identifiable trust property, it is enough that there is identifiable subject matter within which the trust property must be located. Just needs to be defined with sufficient clarity. Requirement of certainty of obligation.

Identification of the trust property- distinguished the equitable obligation which arises under a trust from other forms of obligation which need not be satisfied out of any specific property. Hunter v Moss very criticised. In Haytons view the creation of a beneficial interest in another out of property which one owns can only occur when that property is segregated so as to be capable of separate identification. He said had to create a separate parcel of property to which the trust obligation could attach. 

Is there a need for segregation? where the intention to create a trust is clear, where this is an identifiable fund which is subject to trust obligations there will be a trust even though the fund is not held separately from the general assets. Desirable but not necessary. 

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Parkinson 'Reconceptualising the express trust' 20

Certainty in a mass can be achieved in three ways. 1) where the property within a mass is identified by subtraction or identifying a proportion of the mass 2) where the trustee subsequently identifies the trust property by segregating that property out of the mass 3) where property is impressed with a trust before it is mingled. i) Hunter v Moss was the first type. Was intangible assets. ii) Diplock said 2 can work if the trustee withdraws property from a mixed fund for the purposes of identification as trust property. iii) Stephens Travel. 

Certainty- Re Golay's Trust wasnt void for uncertainty. He said courts are constantly involved in making objective assessments of what is reasonable so could define a reasonable income. Shows the obligation must be sufficiently certain, not the property. 

Redefining- Hayton says the trust should be described as 'an equitable obligations binding a person to deal with property owned by him as a trust fund segregated from his private patrimony whether for the benefit of persons of whom he may himself be one, and any of whom has the right to enforce the obligation or futherance of the purpose which can be enforced by an enforcer provided for in the terms of the trust or operation of law.' Parkinson defines as- 'an express trust is an equitable obligation binding a person to deal with identifiable property to which he has legal title for the benefit of others to which he is in some way accountable.' 

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Emery 'the most hallowed principle' 1982

Question will be 'has the settlor expressed his intention with 'sufficient pratical certainty?' 

The degree of conceptual certainty should be enough to say in principle 'no matter who' that he is a member of the class or not. The terms of a gift may be as such that it will suffice to say of a particular individual if he is eg conditions precedent. 

Four different kinds of questions on certainty- a) conceptual- what is the meaning of the terms used by the settlor? b) evidential- eg documents proving that a person belongs to the class c) ascertainability- doubts about beneficiaries where abouts and d) administrability- questions about the nature of the trustees duty towards the objects. 

a) conceptual certainty- words used to define class must have precise boundaries of meaning. May be impossible to figure out and so void. 

b) evidential- may be impossible to decide if in the class as the facts cannot be established. There may be considerable evidential difficulty in defining relatives. Need to be able to gather facts showing a person is in the class.

c) ascertainability- may not know where the definite members of the class are. 

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Emery 'the most hallowed principle' 1982

d) administative- may be so wide that the trust is unworkable. Scope is by no means clear and no trusts have been declared void from it (at the time this was written.)

Fixed trusts- a) complete list rule- settlor has fixed the beneficial interest, need to be able to draw up a full list. Only certain if the list can be compiled. b) conceptual certainty- class must be defined in concepts clear enough for the trustees to say that no matter who is or is not a member. Need to make sure youre able to make a complete list so must be able to do against anyone. Concepts of 'resident, relative, dependent and forgotten friend' are capable of being conceptually certain in the right context. c) conditions precedent- whether beneficiaries can be defined with enough certainty for the trust to be executed. It is enough that 'it is possible to say of one or more persons that he undoubtedly qualifies even though it may be difficult to say of others whether or not they qualify.' d) evidential certainty- every member of the class must be identified. A trust of property cannot be executed if it is to be divided against all. Degree of evidential certainty will vary according to the nature of a gift. e) administrative- appears to have no application in fixed trusts. Where conceptual and evidential certainty are fulfilled the trustees will always be able to execute trust.

Discretionary trusts- a) if trustees fail and settlor is taken to have directed his trustees to distrute..

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Emery 'the most hallowed principle' 1982

one or some or all members of the class the court will divide it equally. Some cases the equal division is not what the settlor intended. Need to consider their intention. Equal trusts- Burrough type. Not equal- Baden. Must know with sufficient certainty the objects of the donor. 

b) Burrough types discretionary trust- divide equally. Need to have a complete list as cant have division if the class isnt known. Appears to be void unless complete list.

c) Baden (No.1) type- executed with no complete list. Cout may distribute property if trustees default but it will not be on the basis of 'some for everyone.' Need to be sufficiently certain so 'if it can be said with certainty that any given individual is or is not a member of the class.' 

d) Baden (No.2)- new test. Found difficulty in applying test from Baden 1 to a class of relatives. Said that even if relatives were defind as 'coming from a common ancestor' relatives passed the Baden test of certainty. 

e) conceptual certainty under Baden- identical to the complete list rule for fixed trusts and Burrough discretionary trusts. 

f) evidential certainty in Baden- trustee must know with sufficient certainty the object of...

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Emery 'the most hallowed principle' 1982

beneficiary so as to execute the trust. 

g) ascertainability in Baden- unlikely the trustees of a discretionary trust of the Baden type could be said to be under a duty to consider a potential beneficiary about whose continued existence or whereabouts if there was irresolvable doubt. 

h) administrative- a factor which by itself will void a trust. Notion appears to apply to discretionary trusts only. Baden trust may have certainty of object but will fail because it purports to impose on trustees which are so ill defined they cannot discharge. 

i) distinguishing discretionary trust of Baden and Burrough- depends what the settlor intended.

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Martin 'Certainty of objects' 1984

i) trusts for unborn or unascertained beneficiaries- does not show the list principle to be fallicious but merely indicates that it is not essential to the princople that the list be able to be drawn up at the creation of the trust if the time for distribution has not yet arrived. 

ii) implications of the Trustee Act 1927 s27 and Family Law Reform ACt 1969 s17- these provisions protect trustees who distribute amongst only those beneficiaries known to them, after following certain advertising procedures. Can distribute 'having regard only to the claims of which the trustees or person representatives then had notice.' Ascertainability is objective. The provisions merely relieve the trustees from the duty of actually ascetaining beneficiaries, even though those beneficiaries may be ascertainable, leaving it to them to pursue their claims against the property.

iii) Benjamin order- where you presumed the beneficiary is dead, but without prejudice to his right to follow the property. 

iv) list principle is not heresy. Test for the validity of a fixed trust is that a list will be able to be drawn which is on the balance of probabilities complete, as to the maximum number of shares at the time for distribution. 

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