Lecture notes
The Three Certainties
- Module
- Equity And Trusts
- Institution
- University Of Leicester (LE)
Lecture notes including key cases, analysis and theories
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Unit 2- The Three CertaintiesLecture 1- Certainty of Intention
These are the three question you ask: (3 certainties)
Knight v Knight (1840)
Are you sure you want a trust? (gift, loan instead)
What is going in it?
Who is it for?
If you don’t have these, you don’t have a trust
Certainty of Intention - Are you sure you want a trust? (gift, loan instead)
Lawyers look at the words used to understand whether the party wanted to make a trust
Imperative words- commanding words, these show sufficient certainty of intention, “I
direct” “Obligate”
Precatory words- vague words that don’t show sufficient certainty of intention, “I hope”
Lambe v Eames (1871)
A gift by Will to a wife “to be at her disposal in any way she may think best, for the
benefit of herself and her family?
No trust
Re Adams and Kensington Vestry (1884)
A gift by Will to a wife in full confidence that she will do what is right as to the
disposal thereof between my children
No trust
Re Diggles (1888)
A gift by Will to daughter, adding “And it is my desire” that she pays some money
each year to someone else
No trust
Gold v Hill [1999]
Instruction to friend (who would receive some insurance moneys on death of client)
“If anything happens to me you will have to sort things out. You know what to do.
Look after Carol and the kids. Don’t let that bitch get anything”
Trust
Shah v Shah (2010)
A letter to confirm that that the shares were to go to his sister
He sent the letter but changed his mind
, As he hadn’t sent the stock transfer form, it was a failed outright gift
Did the words used show a certainty of intention to create a trust?
“This letter is to confirm that out of my shareholding of current 12,500 in the above
company I am as from today holding 4,000 shares in the above company for you
subject to you being responsible for all tax consequences and liabilities [arising] from
this declaration and letter.”
A trust could be formed
Before Lambe v Eames, the courts were more relaxed when accepting precatory words
Re Steele’s Will Trust (1984)
Necklaces should be held by his eldest son on trust for his wife
“I request my son to do all in his power to give effect to my wish”
Court held that he was bound by precedent from 1868, but they used precatory
words to make trusts and now they wouldn’t
Judge should have gone away from the precedent as mentioned in Re Hamilton
(1895)
What if information isn’t written down?
Paul v Constance
As nothing was written down the court will look at their conversation to see if a trust
had been made. This can be enough to show certainty of intention
If it is land, it has to be written down (deed) so you cannot use your conversation as
certainty of intention
Lecture 2- Certainty of Intention (2)
Rowe v Prance
Mr Prance was having an affair with Miss Rowe for 14 years
Bought a yacht and said they were going to sail- only registered in Mr Prance’s name
He always referred to it as “our yacht”
He didn’t divorce his wife and he fell out with Miss Rowe, he wanted to keep the
yacht for himself
In equity, Miss Rowe was a part owner in equity, didn’t matter that nothing was
written down- enough certainty of intention to create a trust
Does it need to say “on trust”
This helps but is not always conclusive, as equity looks to substance rather than form, the
court can look through it if isn’t really a trust
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