The Three Certainties

Knight v Knight (1840), Lord Langdale MR

Certainty of intention, certainty of subject matter and certainty of objects

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Midland Bank v Wyatt (1995)

Even if “trust” is used, this is no guarantee that a trust will be discerned

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Sweeney v Coghill (1998)

A moral obligation is not enough

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Re Snowden (1979)

If there is doubt, the burden lies on claimant to establish necessary intention on balance of probs

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Lambe v Eames (1871)

Testator gave estate to widow “to be at her disposal in any way she thinks best for the benefit of herself and her family”- Held: precatory and did not show intention to create a trust

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Re Adams and The Kensington Vestry (1884)

A gift made “in full confidence that she will do what is right as to the disposal thereof between my children either in her lifetime or by will after her decease” – Held: precatory, thus no intention to create a trust

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Margulies v Margulies (1999)

Legacy of residuary estate left to one son in confidence that “if in the interests of family harmony”, he would make provision for his brother and sister – Held: precatory; son could keep money for himself

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Comiskey v Bowring-Hanbury (1905)

HL: in looking for certainty of words or intention, one should construe document as a whole; testamentary gift to widow- in full confidence that she leaves the property on her death to one or more of his nieces did not prevent creation of trust-becau

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Re Steele’s Will Trusts (1948)

Solicitor drafted trust for client that followed outmoded precedent which featured precatory words-should have failed for lack of certainty of intention-trust upheld- the deliberate use of the precedent demonstrated necessary intention

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Midland Bank v Wyatt (1995)

Husband set up sham trust to favour family so he could prevent bank from seizing matrimonial home- held: although a legal document had been signed, there was no real intention to create a trust

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Paul v Constance (1977)

Mr C repeatedly said to Ms P about his bank account “The money is as much yours as mine”-not a gift-instead a declaration of trust-gave Ms P an equal share in bank account

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Gold v Hill (1999)

Mr Gilbert took out life assurance policy-named beneficiary was Mr Gold-Mr Gilbert had told Mr Gold he wanted the insurance money to be used to look after his mistress C and her children-conversation had effect of making Mr Gold trustee

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Jones v Lock (1865)

Father held out cheque payable to him in front of his child-said “I give this to baby”-failed gift (title to cheque did not pass)-could not be construed as a declaration of trust

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Shah v Shah (2010)

“I am from today holding 4,000 shares in the above company for you”-CA: both intentions might coexist-letter manifested clearest intention that transfer should take place immediately-to give effect to wording, there had to be a disposition of benefic

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Bieber v Teathers Ltd (2012), Patten LJ

Money advanced for a specified purpose is impressed with a trust for that purpose and does not become the recipient’s property-“The trust continues to subsist until the monies had been applied in accordance with the purpose for which they were lent”

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Patel v Mirza (2013)

Although segregation of the funds is of strong evidential value, it is not strictly necessary

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Twinsectra v Yardley (2002)

Solicitor received money from lender (T) on behalf of property developer (Y)-solicitor gave undertaking that money retained by them used only for purposes of purchasing property for the client-solicitor allowed Y to use money for other purposes-T sue

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Lassence v Tierney (1848)

If the property is transferred to a third party, then the transfer will amount to an absolute gift to the done

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Re TXU Europe Group plc (2003)

Where a settlor unsuccessfully declares himself to be a trustee, no title passes and the property remains in the settlor’s estate

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Hemmens v Wilson Browne (1995)

There has to be an identifiable trust fund-doc purported to give X the right to a monetary payment of £110,000 at any time from Y-did not create trust as there was no fund from which the money was to be paid

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Palmer v Simmonds (1854)

“bulk of my residuary estate”=ineffective-“bulk” has no clear meaning and is totally uncertain

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Lehman Brothers International (Europe) (2010), Briggs J

Re intangibles: such a trust worked by creating a beneficial co-ownership share in the identified fund, rather than seeking to identify a particular part of the fund that the beneficiary owns outright

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Re Goldcorp Exchange Ltd (1995)

Unallocated gold which could not be individually identified-no trust-subject matter was not ascertainable-trust claim to gold coins was unsuccessful-more than 1,000 coins were ordered thus it could not be said exactly which coins belonged to that par

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Hunter v Moss (1994)

Mr H entitled to 50 out of 950 shares-trust upheld-since the shares were identical and indistinguishable, any 50 shares in the company were capable of forming subject matter

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Re Jones (1898)

If the residual estate cannot be calculated at the time the trust is created then uncertainty of subj matter- e.g. a trust of ‘such parts of my estate as she shall not have sold’-failed as the legatee was given absolute interest in the property and t

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In the Estate of Last (1958)

Property left to brother- “at his death anything that is left, that came from me” is to pass to specified persons-held: created a trust-the brother only had a life interest in the property-could not touch the capital

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In Sprange v Barnard (1789)

Wife left stock to husband for his own use on terms that “the remaining part of what is left that he does not want for his own wants” should be bequeathed to specified individuals- trust failed as husband was free to use property absolutely -at creat

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Curtis v Rippon (1820)

Each beneficiary’s share under the trust must be allocated in some way when the trust is established

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In Boyce v Boyce (1849)

M was to choose which house she wanted-other was to be held on trust for C-M predeceased testator without choosing-held: trust failed and both houses stayed in settlor’s estate-it was impossible to say which house C should have, thus the entire trust

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In Re Golay (1965)

Trust provided T with “a reasonable income from my other properties”- held: T’s beneficial interest was certain as “reasonable” provided objective yardstick that court could employ to calculate what a reasonable income for her would be-could look at

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Burrough v Philcox (1840)

E.g. trust set up to benefit settlor’s son and daughter-shares were not specified-maxim deemed each to have equal share

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Re Endacott (1960)

There have to be beneficiaries who are certain or capable of being rendered certain

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Morice v Bishop of Durham (1804)

Strict approach-trust is void unless each and every beneficiary is ascertainable- the complete list test

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Re Benjamin (1902)

If the trustee decides eventually distribute the trust property amongst known beneficiaries, this will be done on basis that any new claimant can recover against them

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McPhail v Doulton (1971)

Test=whether it can be said, with certainty of any potential claimant, that he is, or is not, a member of the class

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Re Baden (No 2) (1973)

Megaw J, Stamp J and Sachs LJ criticised the Class Test

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Re Barlow (1979)

Trust to “old friends” was conceptually uncertain-“old” and “friends” unclear in meaning thus impossible to say who was intended to benefit

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Re Wright’s Will Trust (1982)

Trust to benefit “such people and institutions as have helped me or my late husband” failed- “help” without precise meaning

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Re Baden (No 2)(1973)

Terms “relatives” (descendant from common ancestor) and “dependants” conceptually certain

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Public Trustee v Butler (2012)

“deserving” relatives invalidated trust as it was conceptually uncertain

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Re Tucks Settlement Trusts (1978)

E.g. Chief Rabbi tasked with determining whether a wife was of Jewish blood and had been brought up according to Jewish faith- making Rabbi the arbiter resolved any evidential difficulties

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McPhail v Doulton (1971)

Lord Wilberforce: a class of beneficiaries might be so wide as not to constitute a class at all and would make trust (fixed or discretionary) administratively unworkable e.g. example of “all the residents of Greater London”

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Re Hay’s Settlement (1982)

Trust to benefit anyone in the world would be ineffective

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ex p West Yorkshire Metropolitan CC (1986)

Attempt to benefit “any or all the inhabitants in the County of West Yorkshire” failed- too large-approx. 2.5million people

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Gibbs v Harding (2008)

HC: trust to benefit “The Black Community of Hackney, Haringey, Islington and Tower Hamlets” would be too wide to sustain provide trust

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Re Manisty’s Settlement (1974)

Templeman J: example would be residents of Greater London

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ex p West Yorkshire Metropolitan CC (1986)

Trust to benefit 2.5million inhabitants was not capricious

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The Three Certainties

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