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Summary Three Certainties - Equity and Trusts
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Notes on the legal concept of the three certainties with regard to the law of equity and trusts - case notes, overview etc
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Three CertaintiesWednesday, 16 February 2022 20:56
TI 1
Express trusts
- The rules on certainties apply only to:
○ Private trusts NOT charities
○ Express trusts not implied resulting or constructive
- The rules exist in order that:
○ The trustees should be able to know the extent of their duties
○ The court can determine whether there has been a breach of trust
- The three certainties are:
○ Intention
○ Subject
○ Object
Knight v Knight (1840)
○ Per Lord Langdale
○ 'As a general rule, it has been laid down, that when property is given absolutely to any
person, and the same person is, by the giver who has power to command,
recommended, or entreated, or wished, to dispose of that property in favour of another,
the recommendation, entreaty, or wish shall be held to create a trust. First, if the words
are so used, that upon the whole, they ought to be construed as imperative; Secondly, if
the subject of the recommendation or wish be certain; and, thirdly, if the objects or
persons intended to have the benefit of the recommendation or wish be also certain. In
simple cases there is no difficulty in the application of the rule thus stated.'
Vucicevic v Aleksic [2017] (USEFUL FOR THE PRINCIPLE - you don't need to use the word trust
for it to be a trust)
○ Per HHJ Matthews
○ 'This means that there must be (i) certainty of intention, that is, that the testator
intended to create a trust rather than some other legal arrangement, (ii) certainty of
subject matter, that is that the property subject to the trust can be ascertained, and (iii)
certainty of objects, that is, that the beneficiaries or purposes of the trust are clear. As I
have said on at least one other occasion, this is not a rule of trust law alone. It is just as
true of any gift under ordinary property law. For a gift to be valid, you must be certain
that the intention is to give (rather than say, lend) what is to be given, and whom it is to
be given.'
Certainty of intention
- No express trust without intention
- Put it in writing
- Use of the word 'trust'?
○ Re Kayford [1975]
- Use of precatory words
Re Kayford [1975] 1 WLR 279 (USEFUL FOR THE BASIC PRINCIPLE - you don’t need to use the
word trust to create a trust)
○ A mail order business - bedding, furniture, quilts etc
○ Took money in advance, sometimes in instalments
○ Started to experience supply shortages and financial difficulties
○ They took advice and were advised to set up a separate trust account for customer
money
There is no doubt about the so called 'three certainties' of a trust. The subject matter to be
held on trust is clear, and so are the beneficial interests therein, as well as the beneficiaries. As
Equity and Trusts Page 1
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