Lecture notes
Lecture notes for Equity and Trusts
- Module
- Equity and Trusts
- Institution
- The University Of Essex (UoE)
Includes Certainty of subject matter and capacity and the beneficiary principle
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Equity and TrustsLecture 3
Certainty of Subject Matter
Certainty of subject matter
Two aspects we need to be aware of:
a) The trust property (we need to know what the trust property comprises)
b) The beneficial interest(s) (what is each of the beneficiaries entitled to?)
It is important because:
- Beneficiary – allows them to enforce the trust
- Trustee – If Trustee acts outside of the terms of the trust, they could be liable for a
breach of trust that could see them face serious consequences.
- Court – If court is involved, they have to know the above aspects.
a) Certainty of Trust Property:
CASE EXAMPLES – examples where there is no certainty of trust property
You must identify exactly what property is subject to the trust. So, the trust property and
extent of that property must be described in clear, definite, and certain terms.
Examples where this hasn’t happened:
Sprange v Banard (1789) 2 Bro CC 585
In this case, a woman left property to her husband, and she left it for his sole use during
his lifetime. But when he died, he had to leave it to the wife’s siblings. The phrase used
was:
“At his death, the remaining part of what is left that he does not want for his own wants”
should be left to brother and sister of woman.
This statement was challenged and ended up in court where it was concluded that there
wasn’t sufficient certainty, as they didn’t know what property should be going to the
siblings. `it wasn’t clear if this was subject to a trust, as the word ‘part’ was not sufficiently
certain. So, it was found there was no trust, and the husband took the property absolutely,
so he could do whatever with it while he was alive and leave it to who he wanted after he
passed.
Palmer v Simmonds (1854) 2 Drew 221
A woman left her residuary estate (everything once legacies, debts, expenses, and tax have
all been paid out) to her husband for his own use and benefit while he was alive (life
interest) but was subject to a proviso that when he died the bulk of what was left should go
to four named relatives.
“I have full confidence…that…he will… leave the bulk of my residuary estate…”
, The question posed again was ‘Is this sufficiently certain to impose a trust’. The matter went
to court, and they said of course not. The meaning of bulk was not sufficiently certain and
didn’t quantity what property should be left and used to benefit these four named relatives.
So, no trust was found. Husband took property absolutely.
Words must be: DEFINITE, CLEAR and CERTAIN
CASE EXAMPLES – examples where these is certainty of trust property
Re Thompson’s Estate (1879) 13 CHD 144
There was a testator who left property to his widow as a life estate, but when she died it
had to go to various trusts. The descript used was:
“Any property” remaining at her death had to be held on these various trusts that had been
identified.
The court held that the descriptor was sufficiently certain, they can quantify any property
(all property left when she dies).
Re Last [1958] P.137
A testatrix left all her property to her brother subject to when he died, anything remaining
must go to certain named people
“Anything remaining”
Court found the descriptor was sufficiently certain.
Re Golay’s WT [1965] 1 WLR 969
Testator owned several properties. He left instructors to his trustees that his daughter was
to have one of the properties and receive a reasonable income from the rest of the
properties. Trustees were allowed to choose which property the daughter should have but
they were concerned about the phrasing of ‘reasonable income’ and whether it was
sufficiently certain.
“To… receive a reasonable income from my other properties”
Court held that it was able to ascertain and establish and identify what constitutes a
reasonable income – something that can be measured and assessed objectively by
reference to her current income and living standards. In this case the court could determine
the descriptor as sufficiently certain.
b) Certainty of beneficial interest
CASE EXAMPLES
Boyce v Boyce (1849) 6 Sim 476 (EXISTING METHOD CASE)
Facts: A testator left two houses on trust in his will to two named individuals (Maria and
Charlotte). It is stipulated in the will that Maria was to choose her property first and
Charlotte would have whichever property was left. Unfortunately, Maria died during the
lifetime of the testator, and he didn’t change his will, so when he died, there were these
two houses on trust and directions that Maria was to choose first, but she couldn’t since she
had died. So, the question arose as to whether Charlotte could have one of the properties.
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