1. Certainty
-McPhail v Doulton (1971)WILBERFORCE- “trusts should be upheld if
there is sufficient practical certainty in definition for it to be carried out”
a) Intention
- Milroy v Lord (1862) - express trusts can be made orally
-Re Adams & Kensington Vestry (1884) - “full confidence” “what is
right” for kidsNO TRUST as not certain intention
-Jones v Lock (1865) - 900 quid for baby- “loose conversation cannot
form intention for trust” instead is a failed gift
-Comisky v Bowering-Hanbury (1905) - “full confidence” BUT “she will
devise” “I hereby direct”- gift to wife subject to trust to niecechange
in court view- more certain words
-Re Gulbenkians settlement (1970)-if intention expressed in writing/will
courts “will bend over backwards” to enforce- make sense of it without
doing violence to it
-Paul v Constance (1975)-bank account/bingo- “as much yours as
mine”- oral agreement held certain enough for intention
-Re Kayford Ltd (1975)-mail order company set up separate bank
account for each client- this is a trust intention through separate bank
accounts what they want will be upheld, even if they unaware that
they’ve created a trust2 ABOVE CASES SHOW INTENTION THROUGH
CONDUCT
-Gold v Hill (1999)-looks after wife and kids not enough
-Tito v Waddell (NO.2) (1977)-use of word trust not essential “look at
substance over form”
-Pearson v Lehman Brothers finance (2010) - it is an objective
assessment derived from express agreement
-Rowe v Pearce (1999)-leave wife/sell home/buy yacht- only did last
onetrust in equal shares as had said purpose was to travel together
and was “ours”
-R v Clowes (No.2)(1994)-fraud case/brochure for fraud investment- yes
is a trust because he said there will be separate bank accounts and
they would be beneficiariesin commercial context intention must be
very clear for a trust
-Re Lewis of Leicester ltd (1995) - basically like a Debenhams store- as
each company used separate til into separate bank accounts it’s a trust
-Snook v London & west riding investment (1967)- sham trust is where
you make 3rd party believe they are entitled to certain rights when in
fact they are entitled to other rights too
-Midland Bank v Wyatt (1997)-mistaken legal advice, creates a trust of
family home- unaware that real intention is to protect home when
, business goes bust even though not intentional fraud behaviour- still
MISLEADING so still a sham
Conaglen- reason for this high threshold is so that normal trusts are not
tampered with
b) Subject matter
-Re Ellenborough- cannot have trust for future property outside of
testamentary trusts
-Sprange v Barnard (1789) - “sole use of husband...remaining part of what
is left” to siblingsNO not enough, cannot ascertain the shares- absolute
gift to husband
-Boyce v Boyce (1849) - “Maria shall not choose” goes to other
sistersNOT CERTAIN SUBJECT MATTER because if Maria dies before
choosing then couldn’t occur
-Palmer v Simmonds (1854) - “bulk of my residuary estate” not certain
enough
-Re Last (1958) - “absolutely” to brother “anything left” to others YES
ENOUGH life estate for brother then distributedChange in courts
approach
-Re Golays Will Trusts (1965) - certain subject matter for “reasonable
income” by reference to previous standard of living
-Hunter v Moss (1994)-50 shares for hunter- succeeded even though
impossible to ascertain- affirmed previous case law and because each
share is identical, intangible, practical- need identity + proportionate
amount of each share for certainty—distinguished below case as
concerned with chattelsno issue with self-declaration of trust
-Re London wine co (1986)- sold wine/remained in bulk- cannot identify
whose is whose so no certainty of subject matter
-Re Goldcorp exchange (1994)- case of losing gold bullion for similar
reasons as above BUT NOWADAYS Section 1(3) Sale of Goods
(amendments) act 1995 when you purchase part of bulk, you acquire
property rights over that bulk
-Pearson v Lehman Brothers finance (2010)- looked at Hunter case and
said if tangible, it needs to be identified and separated but if intangible
and of same value it is irrelevant ALSO says Goodes view that you didn’t
buy 50 shares but 5% beneficial co-ownership is best view
c) Objects
Note IF FAILURE OF CERTAINTY OF OBJECT=RESULTING TRUST
Virgo- different types of trusts need different levels of certainty 6 matters
always required:
- Essential test of certainty
- Conceptual certainty
- Evidential certainty
- Ascertainment
- Size of class
, - Test of capriciousness
-Emery (1982)- says conceptual/evidential/ascertainability/ administrative
workability are proper distinctions
i) Fixed trusts
-IRC v Broadway Cottage Trusts (1955)- complete list test required to
satisfy all the certainties
ii) Fixed trust subject to condition
-Condition Subsequent=beneficiary has interest that is subsequently lost
if condition is satisfied
-Clayton v Ramsden (1943)- “a person not of Jewish faith”- this is an
example but is void as hard to define who is Jewish
- Re Coxen (1948)- held house for wife unless trustee reasonably believed
she didn’t reside there- Court determine conceptual certainty/trustee
determine evidential certainty therefore yes certain!
-Re Jones (1953)- forfeit money if “had a relationship” with certain
personVOID as “relationship” hard to define
-Re Wynn (1953)- trustees granted absolute power to resolve all issues of
trust- VOID cannot remove beneficiary right to go to court
-Re Coates (1955)- power to wife to distribute if forgotten- “friends”
usually conceptually uncertain but as it is wife view it is fine
-Re leek (1969)- “trustee believes has a moral claim to it” on true
construction this is conceptually certain- not about what moral is, but
what trustee thinks “moral is” dependent on trustee relationship to
settler
-Re Tucks Settlement trust (1978)- “Jewish blood” trust instrument gives
power to rabbi this satisfies conceptual certainty- LEADING CASE
-Re Wrights will trust (1981)- gift to trustees with absolute discretion to
give to who they think have helped me conceptual uncertainty as to
who that class of people areALSO if 2 objects, 1 certain other not,
SEVERANCE CANNOT OCCUR
-Re Teppers Will Trust (1987)-same thing about Jewish faith but placed
“testator in his armchair” by specifying that it would be adjudicated by
local rabbi THIS IS CERTAIN OBJECTS
-Blaithwayt v Lord Cawley (1976)- same but with priest and Roman
Catholic
Condition precedent= don’t distribute unless object satisfies requirement
-Re Barlow’s Will trusts (1979)- sell pictures at reduced rate to friends and
family- “friends” sufficiently certain here because it not in relation to
creating a class, but instead creating a requirement
iii) Discretionary trusts
-McPhail v Doulton (1971)- “benefit employees/relatives/dependants”-
WILBERFORCE ESTABLISHES “is or is not” test for discretionary trusts it
will succeed where any given individual can be determined to be inside or
outside the classwill not fail because class size cannot be ascertained
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