Essay
Evaluation on the three certainties of trust.
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This essay provides for an evaluation on the article of Wilde on the fourth certainty.
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IntroductionThe purpose of this essay is to determine the validity of Wilde’s central argument
which suggests the recognition of distributional certainty as the fourth certainty. In
this essay, one will first provide for a brief summary of Wilde’s argument, the
evaluation and potential arguments to oppose his viewpoints will then be provided.
The result of this essay is expected to reach a different conclusion as compared to
Wilde’s. (69 words)
Brief Summary of Wilde’s Article
David Wilde, in his article, explains that distributional certainty should be the fourth
certainty required to declare a trust, and that it should be segregated from certainty
of subject matter in the context of private trusts, and from certainty of objects despite
neither are required in the context of charitable trusts. 1
Wilde starts off by providing three certainties required for creation of trust set
out in Knight v Knight by Lord Langdale M.R.2 where the settlor is required to
indicate, with certainty, intention of creation of trust; the property which will be held
on trust; and the identity of the beneficiary or beneficiaries. 3 Certainty of subject
matter is further explained as rule that the trust property must be certain or
ascertainable.4 Uncertainty of subject matter result in non-creation of trust, and the
settlor will remain as the owner of the property and gives rise to opportunity to re-
declare the will with certainty, or be part of settlor’s estate. 5 if the property was given
as a gift, only the initial gift will take effect. 6
Wilde then explain that distributional uncertainty may occur despite the
aforementioned certainties are established, distributional certainty refers to the
beneficiaries’ shares of the trust property. The need of distributional certainty was
raised by Lord Langley M.R. on certainty of interests to be enjoyed by the objects.
Boyce v Boyce was cited to demonstrate distributional certainty. 7 Where the trust
was held to go back as resulting trust as the settlor’s estate due to unclear allocation,
thus a clear proposition that division of the trust property must be certain otherwise
that part of the trust fails. Wilde emphasized that distributional uncertainty may be
seen as either issue of uncertainty of property or uncertainty of object while both are
clearly identified.
Three rationales for segregation of distributional certainty from certainty of
property were then provided. The first rationale of segregation is due to the differing
consequences of uncertainty of distribution and of subject matter. In cases of
uncertainty of property, the trust will always be held as invalid. While in the case for
distributional uncertainty, the trust will only fail to the extent of that uncertainty. The
second rationale is that the segregation highlights the judicial tools which resolves
issues of distributional uncertainty, which are as follows:
1
D. Wilde, ”The Three Certainties To Create A Trust- Or Is It Four? Distributional Certainty.”
(2020) CLJ 79.2 349-359, at 349
2
(1840) 49 ER 58
3
ibid
4
Palmer v Simmonds (1854) 61 ER 704
5
D. Wilde, ”The Three Certainties To Create A Trust- Or Is It Four? Distributional Certainty.”
(2020) CLJ 79.2 349-359, at 351
6
ibid
7
Boyce v Boyce (1849) 60 ER
, 1) Court’s inference of the settlor’s intention. As stated in the case of Gold v
Hill it is the courts’ duty to infer the intention of the settlor if beneficiary
shares are unclear;8
2) Application of the maxim ‘Equity is equality’ which usually leads to equal
distribution.9 However the maxim cannot be invoked in cases where
inequality was clearly intended by the settlor;
3) Beneficiary’s implied right of selection as illustrated in Re Knapton where
lots were drawn;10 and
4) Beneficiary agreement as suggested by Glanville Williams where the
beneficiaries agree to apportion the property among themselves in clear
manner.11
In relation to the final rationale, Wilde suggests that administrative unworkability
should be linked with distributional uncertainty. 12 Emery’s argument which identifies
administrative unworkability as an issue of distributional uncertainty was cited to
support his argument.13
In relation to the context of charitable trusts, Wilde submits that it would be
clearer to separate distributional certainty from certainty of object as it obscures the
issue of division between the objects. (543 words)
Evaluation of Wilde’s Argument
Main argument of Wilde’s article is that there should be a fourth certainty of trust for
the purpose of better understanding a trust better. 14 Part of this essay will provide an
evaluation on the arguments submitted by the author as well as providing an
evaluation on the evidence raised to support his proposition.
The main argument as mentioned above, can be understood as an issue
where despite having established all the three required certainties to create a trust,
there will still be an issue of beneficiary interests. The purpose of recognising the
fourth certainty, is to resolve the issue of uncertainty of distribution of the trust
property. Lord Langdale MR in the leading case of Knight v Knight did raise the
issue of interests to be enjoyed by the beneficiaries. 15 Hence this is in support of the
point of Wilde that uncertainty of distribution is indeed a problematic area when there
are uncertainties as to the shares of the property.
Both cases of Boyce v Boyce and Pensions Regulator v A Admin Ltd were
then cited for the purpose of providing an illustration on the rationale for the fourth
certainty of distribution to be recognised. 16 in Boyce, failure to declare a clear
division of the trust property resulted in the failure of the trust, 17 while in Pensions
8
[1991] 1 FLR 54, 64
9
Re Steel [1979] Ch. 218
10
Re Knapton [1941] Ch. 428
11
G.L. Williams, “The Three Certainties” (1940) 4 MLR 20, 24.
12
D. Wilde, ”The Three Certainties To Create A Trust- Or Is It Four? Distributional Certainty.”
(2020) CLJ 79.2 349-359, at 356
13
Ibid, at 357
14
Ibid, at 349
15
Knight v Knight (1840) 49 ER 58
16
D. Wilde, ”The Three Certainties To Create A Trust- Or Is It Four? Distributional Certainty.”
(2020) CLJ 79.2 349-359, at 351 and 352
17
Boyce v Boyce (1849) 60 ER
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