TRUSTS - THREE CERTAINTIES

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 6. Capriciousness

**No DT has ever been invalidated/void for capriciousness R v District Auditor WY: was administratively workable, but failed for capriciousness (CHECK THIS INTERNET SAYS DIFFERENTLY) Re Manistry: capriciousness is where 'negative any sensible intention on the part of S... if S had any sensible intention or expectation, he would not have required T's to consider only an accidental conglomenration of persons who have no discernable link with S'. In this case, although was in the context of a fiduciary power, Templeman J suggested that a power given to T's to benefit 'the residents of Greater London' would be capricious because terms of the power negative any sensible intention on part of S Size of class is relevant, but also connection between S and the class itself Consideration should be given to the nature of the class to determine whether S had a good reason to benefit that particular group - if arbitrary, likely to be void

CERTAINTY OF SUBJECT MATTER B. Identity Hunter v Moss Principles

1. Clarifying identity on death - if had been a declaration of trust of 5% of the shares in a will - valid 2. Types of shares - if there had been a lifetime declaration of trust by S of 50 shares, and S held shares in TWO companies, this would be void because not clear whether S intended shares in company A or B 3. Tangible - intangible - difference justified because intangible property of same type will be EXACTLY the same in any material sense. So a trust of part of larger whole will be upheld if property is intangible, provided it is identifiable and there was intention to create a trust from a particular bulk/fund (MacJordan Construction v Brookmount) 4. intention to create a trust from a particular fund - not sufficient to say identification turns only on whether tangible v intangible. S must intend part of that fund to be held on trust. In MacJordan, claimed money held on trust when contractors provided client could retain 3% of contract price, pending confirmation that building work was satisfactory. Builder claimed money in C's bank account held on trust when C became insolvent. Never had assuemd an obligation to establish the retention from the account = claim failed. For Hunter, different as S had intended shares to be held on trust for C. the shareholding was equivolent of a fund that was sufficiently identified, and part of which was held on trust for C because this is what S had intended

CERTAINTY OF OBJECT Six Elements

1. Essential test - different for fixed or discretionary trusts 2. Conceptual certainty - whether possible to define with sufficient certainty the DESCRIPTION OF THE CLASS. The definition/description of the objects. 3. Evidential certainty - ease of PROVING that someone is an object 4. Ascertainability - whether/where an object of the class is LOCATED, e.g what if it is clear that someone is an object, but cannot be located? 5. Administrative workability - SIZE OF CLASS, Q of whether the size of the class is too large to be administered 6. Capriciousness - is there some SENSIBLE INTENT behind the S's choice of object(s)? Issue of ascertainability does not defeat trust - distribution can be made to the other objects, or paid into the court via Benjamin order

CERTAINTY OF INTENTION Sham Trusts Principles

1. Shalson v Russo: must be an intention to create a false or misleading appearance that a trust has been created 2. Midland Bank v Wyatt: can be sham even if no misleading or dishonest motive, e.g some other ulterior motive than the creation of a genuine trust. National Westminster Bank v Jones: 'a finding of a sham trust carries with it a finding of dishonesty' 3. Shalson v Russo: only teated as a sham if both S and T intended it to be so. Midland Bank v Wyatt: may be sufficient that one party, who was reckless as to the transaction are deemed to have intended to mislead. A v A: not sham as T's did intend - need conspiracy to mislead 4. A v A: T who purports to treat valid trusts as a sham may be liable for breach of trust instead 5. Under s.423 Insolvency Act 1986, declaration of trust can be set aside where made to defraud creditors (s339), such as where S's purpose is to put assets beyond reach of creditors (IRC v Hashmi)

CERTAINTY OF OBJECTS RESOLVING UNCERTAINTY Methods 5. Letters of Wishes

A means of communication by S to T's, of non-binding requests to take certain matters into account (Breakspear v Ackland) Can be used to avoid the dangers of having uncertain objects in trust by referring to descriptions in a letter that are conceptually uncertain but which may assist Ts in exercising their discretion

CERTAINTY OF OBJECT FIXED TRUSTS SUBJECT TO CONDITIONS 6. Capriciousness

Although no authority on this point, presumably if the condition can be characterised as capricious, in sense that S had no sensible intent, condition should be regarded

CERTAINTY OF SUBJECT MATTER B. Identity Hunter v Moss

Although not clear what shares were held on trust, trust was valid. no need to differentiate between shares. Shares were of a single class and in one company; all the same. Dillon LJ: 'just as a person can give, by will, a specified number of his shares... he can declare himself trustee of 50 of his ordinary shares, and that is effective to give a beneficial proprietary interest to the beneficiary under the trust' ** A trust of a mass will not fail for uncertainty where there has not been an appropriation of any specific part of the mass for B, as long as the mass itself is sufficiently identifiable and as long as B's proportionate share of the mass is identifiable *** Everything to be presumed against T

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 1. Essential Test Re Baden's Deed Trusts (No2) STAMP LJ

BOTH CC AND EC For Stamp, under the any given postulant test, you need: - clear definition of class - sufficient information to say who is and is not in class - need both EC and CC - Virgo: 'this is most consistent with the test proposed by Lord Wilberforce, but means discretionary trusts are more likely to be found void and therefore this would not be consistent with principle that S's intent must be respected'.

CERTAINTY OF OBJECTS FIXED TRUSTS 1. Essential Test

COMPLETE LIST TEST - trustees are required to distribute the property to B's in the proportions identified in trust document, must be possible to identify all of the objects in the class IRC v Broadway Cottages: 'there can be no division in equal shares amongst a class of persons unless all members of the class are known' - at time of distribution, if not the trust is void In order to establish the complete list test must: 1. Determine all B's at the time of distribution 2. Establish CC 3. Establish EC

CERTAINTY OF INTENTION Use of word 'trust'

Charity Commission v Framjees: do not need to use 'trust' Town Investment v Dept of Environment: use of 'trust' does not automatically create one Re Kayford: 'a trust can be created without using the words 'trust or confidence'' Paul v Constance: 'the words that he did use on more than one occassion, namely 'this money is as much yours as mine convey clearly present declaration that the existing fund is as much the Ps as his own' (Scarman LJ) 'Loose conversations' not sufficient (Jones v Lock). However, need not use the words 'i declare myself trustee', but must do something which is equivalent to it, and use expressions which have that meaning (richards v delbridge)

CERTAINTY OF OBJECT RESOLVING UNCERTAINTY Methods 1. T as Arbiter

Creator of trust might give T an express power to resolve uncertainty But S cannot delegate all responsibility, nor exclude the jurisdiction of the court. this conflict has tended to be settled by recognising that T's are able to be arbiters of EC but not CC Re Coxen: legitimate for T to allow trustee to determine whether a condition for revoking gift had been satisfied, but if defining concept is unclear, not sufficient to leave to trustees to save the trust (Re Wright's WT). Thus, could resolve evidential certainty, e.g with long standing friends - but if class conceptually uncertain, e.g 'those under a moral obligation', cannot get T to decide if class CC, provision cannot save trust. Although, may depend on the construction of the provision; Re Leek

CERTAINTY OF OBJECTS FIXED TRUSTS 2. Conceptual Certainty

Definition/description of the class must be sufficiently certain, e.g 'friends' would not be certain, but 'fellow members of my school choir' would be If definition of objects is unclear, cannot satisfy the complete list test

CERTAINTY OF OBJECT FIDUCIARY POWERS 4. Ascertainability

Does not defeat validity of the power since there is not an obligation to exercise this power

CERTAINTY OF OBJECTS FIXED TRUSTS 4. Ascertainability

Does not matter that the location or continued existence of particular B's cannot be established (Re Gulbenkian), property will be distributed amongst those who can be ascertained, and the share of anybody who cannot be ascertained can be paid into the court via Benjamin Order

CERTAINTY OF OBJECTS FIXED TRUSTS 3. Evidential Certainty

Ease of proving somebody is an object If not established, complete list test fails

INTRODUCTORY NOTES

Express trusts arise from the express intention of the parties who create the trust In order for the bequests to be valid, the three certainties laid down in Knight v Knight, of intention, subject matter, and object, must be satisfied Must establish whether it is a fixed or discretionary express trust

CERTAINTY OF OBJECT FIDUCIARY POWERS 5. Administrative Workability

FPs have been recognised as valid where T's are able to exercise the power in favour of the whole world, other than members of a limited class (Re Manistry's ST), or with no limit at all (Re Beatty) Re Hay's ST: cannot be struck down for being AW simply because of the breadth of the class

CERTAINTY OF OBJECTS DISCRETIONARY TRUSTS 4. Ascertainability

Fact that it cannot be established where object is, or whether they are still alive (McPhail v Doulton), does not invalidate the trust Rather, the inability to ascertain the location simply means that the person cannot receive distribution, e.g Benjy Orders

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 1. Essential Test Re Baden's Deed Trusts (no2)

Facts: settled fund for benefit of large class 'any of the officers and employers or ex-officers or ex-employees of the company or to any relatives or dependents of any such persons' Same case as previous, remitted case to Chancery Division to determine whether the trust was valid. Court had to apply Wilberforce's 'any given postulant' test, in doing so three separate approaches arose

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS Meaning

Gives discretion to the T's as to whom should benefit from the trust property Lewison LJ 'a right to be considered as a potential recipient of benefit by the trustees'

CERTAINTY OF OBJECTS FIDUCIARY POWERS 1. Essential Test

Held by Ts and other fiduciaries Different from DT because no obligation to distribute amongst the objects *Re Gulbenkian: test is met if it could be determined that any individual was or was not a member of the class. Vital that both T's and the courts are able to determine who are and are not objects of the power

CERTAINTY OF INTENTION Commercial Context

Henry v Hammond: general reluctant to find a trust arising from commercial context Re v Clowes (No2): Watkins LJ - a requirement to keep money separate is normally an indicator that trust was intended

CERTAINTY OF SUBJECT MATTER B. Identity Hunter, Pearson and Co-Ownership

If A declares himself trustee of 50/950, may intend that B should have a beneficial interest in ANY of the 50 shares OR that B is to get 1/19th interest in ALL of the shares - so that they will be tenants in common of the whole White v Shorthall: not necessary for B to be able to point to particular shares, rather each had an interest in all of the shares Affirmed in Pearson v Lehman Bros: 'such a trust works by creating a beneficial co-ownership share in the identifiable fund, rather than the conceptually much more difficult notion of seeking to identify a particular part of that fund which B owns outright'. The certainty of SM requires both certainty of identity of property to be held on trust, and the proportionate amount of each of b's shares Boyce v Boyce: might sometimes be able to resolve the uncertainty. T's may have been given the discretion to divide, or might be possible for courts to apply the maxim that 'equity is equality', and so divide the property equally between the B's (Burrough v Philcox)

CERTAINTY OF OBJECTS Absence

If S purports to declare a trust and there is clear intention to do so, and certainty of SM, but the objects are unclear, the express trust will be void In relation to the property itself, would not be appropriate for T to receive absolutely. Cannot be held on express trust because simply unclear who the objects are Logical solution is to conclude that T should hold on trust for S through RT (Briggs v Penny) S can demand transfer of legal title from T and, if S so wishes, declare another trust, but this time ensuring that the objects are certain. if the trust were a testamentary trust, T would hold the property for the benefit of those entitled to the deceased's residuary estate

CERTAINTY OF INTENTION Absence

If property is transferred to another, then the person will take that property absolutely (Lambe v Eames), no trust so the property belonged to the widow to dispose of as she wished If insufficiently certain, the owner remains the absolute owner, e.g Jones v Lock, no declaration of trust so cheque remained part of the father's estate If intention fails due to precaratory words, can move to T absolutely as a gift, because will is valid, can take the will as intention to give T money and anything that comes after is seen as 'hope you give to nephew but don't have to

CERTAINTY OF OBJECTS FIXED TRUSTS SUBJECT TO CONDITIONS Condition Subsequent

If the condition is satisfied, B will no longer be entitled to the trust property STRICTER TEST - a vested interest in a trust property is defeated by a subsequent event (Blaithwayt v Lord Lawley) Clayton v Ramsden - condition that had effect of forfeiting property held on trust if B were to marry 'person of jewish faith' VOID for uncertainty as to the meaning of member of faith Re Jones - half trust to be forfeited if daughter had relationship with the named person; 'relationship' too uncertain so void Re Tepper's WT - income at 25 provided that 'did not marry outside the jewish faith'. Scott J recognised could be conceptually uncertain as in Clayton, but willing to look to extrinsic evidence to resolve, which involved asking what 'the testator in his armchair' would have meant by 'jewish faith' Blaithwayt v Clawley: condition was if was to become roman catholic, sufficient **Only necessary to consider whether the condition is conceptually certain, not necessary to consider evidential or AW, because these are negating, rather than entitling, conditions. B already has an interest under the trust that is SUBSEQUENTLY forfeited if condition is satisfied

CERTAINTY OF OBJECTS RESOLVING UNCERTAINTY Generous Approach

In practice, the courts will take a generous approach to certainty of object Re Gulbenkian: 'it is the duty of the court to make sense of S's intentions however obscure and ambiguous' Re Roberts: 'the modern doctrine is not to hold a will void for uncertainty unless it is utterly impossible to put a meaning upon it' (Jessel MR)

CERTAINTY OF OBJECT FIDUCIARY POWERS 6. Capriciousness

In the sense that there was no sensible intention of S to benefit objects. A power will be characterised as capricious if there is no discernible link with S (Re Manistry), but not simply because of the size of the class A power to benefit anybody in the world will not be treated as capricious because no class that could be considered to be capricous has been identified, but a power to distribute to anybody who has read this book might be capricous, depending on the context, because membership of the class appears to be accidental and irrelevant to any purpose of limiting of selection objects

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 1. Essential Test

Initial approach evidenced in Re Gulkbenkian - same complete list test per Lord Denning, affirmed in Burrough v Philcox McPhail v Doulton evidenced shift in approach; 'the trust is valid if it can be said with certainty that any given individual is or is not a member of the class' (Lord Wilberforce). Known as the ANY GIVEN POSTULANT test

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 1. Essential Test Re Badens Deed Trusts (No2) MEGAW LJ

MIDDLE GROUND BETWEEN STAMP AND SACHS For Megaw, under the any given postulant test, you need: - probably need CC - need SOME evidential certainty, but just 'reasonable amount' - Number is a matter of common sense and degree - Some 'don't knows' will not be fatal - Enough that could be shown of a substantial number of objects that they are within class. Trust would be valid even though as regards as significant number of potential objects, could be proved neither that were not that were not within the class

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 5. Administrative Workability

McPhail v Doulton: 'so hopelessly wide as to not form anything like a class' (Wilberforce). Wilberforce suggested that DT for benefit of all residents of Greater London would be unworkable and void R v District ex p West Yorkshire MCC: 'a trust with as many as 2 and a half million potential B's is quite simply unworkable' (Lloyd J) Re Baden's Deed Trusts (No2): 100,000s not necessarily unworkable Re Harding: black community of four London boroughs VOID Re Hay's ST: DT for anyone other than a few specified people would be administratively unworkable Virgo - argues since no consistent rationale for size of class rule can be identified and because it is inconsistent with fundamental principle of respecting S's intentions, this rule should instead be examined when considering text of EC, e.g if objects cannot be proved to be within class, should be considered outside of it. this should be a sufficient filter to deal with this problem

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 2. Conceptual Certainty Dealing With a Class of Objects

McPhail v Doulton: must 'survey the potential field of beneficiaries', but there is no need to check all the possible beneficiaries. Re Baden's Deed Trusts (No2): 'the requirement of a survey refers to something quite different to a need to provide a list of individuals or to provide a closely accurate enumeration of the numbers in the class: it relates to the width of the field from which B's may be drawn and which T's should have in mind so that they can adopt it their methods of discretionary selection' (Sachs LJ) - T's need at least a sense of the size of the class, and arguably need at least some degree or basic level of evidential certainty to do this

1. CERTAINTY OF INTENTION Meaning

Moffat: 'the hallmark of an express trust is the existence of an intention to create a binding trust obligation' Re Gulbenkian's Settlement: 'the court should innate common sense and desire to make sense of expressed intentions, however obscure and ambiguous the language' (Lord Upjohn) General intention to benefit SOMEONE is not enough, have to intend to benefit a recognised individual(s) by using the mechanism of a trust The intention may appear from words or wider circumstances

CERTAINTY OF OBJECTS FIXED TRUSTS SUBJECT TO CONDITIONS Condition Precedent

Needs to be established BEFORE the property can be distributed valid if can be said of just one person who satisfies the condition - Re Barlows WT: friends or family could buy before go on sale to public for a reduced price. Held that although 'friends' not sufficient for discretionary trusts or fiduciary powers, not relevent test to apply for condition precedents. Sufficient as a description for a condition precedent because there would be some people with whom S was so close to anybody would characterise them as friends. Onus is placed on the object(s) themselves to satisfy the condition

CERTAINTY OF OBJECTS FIXED TRUSTS 6. Capriciousness

No relevancy for fixed trusts

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 1. Essential Test Re Baden Deed Trusts (No2) ***SACHS LJ

ONLY NEED CC For Sachs, for the any given postulant test, you need: - clear definition of class - CC but NOT EC - It is for the postulant to prove that they are in the class, if not - they are not within it. Any 'don't knows' need to be treated as 'nos' - Simply a question of fact on evidence of whether a person falls within that class. If a particular person were not proved to be within the class, should be considered outside of it - This would not render the trust void, but would mean that the particular person was not an object of the trust - Virgo: 'in light of the fundamental principle that S's intent will be respected, the approach of Sach's is to be preferred, because this removes evidential certainty as a means of invalidating the trust' Webb & Akkouh: 'those who think that trusts should be upheld even when S's intentions can be given effect to only imperfectly, will prefer Sach's more indulgent approach'

3. CERTAINTY OF OBJECT Meaning

Objects of the trust must be defined with sufficient certainty to enable the T's to execute the trust according to the S's intention. Closely linked to the beneficiary principle. Dependent on the type of express trust at hand

CERTAINTY OF OBJECT FIXED TRUSTS SUBJECT TO CONDITIONS 3. Evidential Certainty

Once burden of providing condition has been satisfied is borne by object, evidential certainty will not invalidate the condition, but will mean that the condition cannot be shown to have been satisfied by that particular object

CERTAINTY OF INTENTION Precaratory v Imperative Words

Precaratory words = expressions of desire, hope, etc - rather than an instruction or direction. e.g 'expectation' or 'wish'. These are normally insufficient to establish the necessary file (Re Diggles, Re Hamilton, Lambe v Eame) Re Adams and Kensington Vestry: 'in full confidence' = insufficient Re Diggles: 'it is my desire that' = insufficient Re Hamilton: 'i wish that' = insufficient Should not just consider the words in isolation, it is about the whole document and surrounding circumstances. Re Adams: 'if the rest of the context shows that a trust is intended, may make a trust, but what we have to look at is the whole of the will'.

CERTAINTY OF SUBJECT MATTER A. Description

Q of fact as to whether description enables the subject matter to be properly identified Palmer v Simmonds: 'the bulk of my residuary estate' = insufficient Sprange v Barnard: 'the remaining part of what is left' = insufficient Boyce v Boyce: 'all my other houses' = insufficient - ** if first half of trust fails, second half will also be uncertain, e.g in cases where 'the test' is left to a particular B Re Last: 'anything that is left' = sufficient Re Golay's WT: 'reasonable income' = sufficient, as possible to determine what is objectively considered to be 'reasonable'

CERTAINTY OF OBJECT DISCRETIONARY TRUSTS 2. Conceptual Certainty

Re Baden's Deed Trusts (No2): Relatives - CC. Sachs and Megaw defined as 'descendants of a common ancestor', Stamp defined more narrowly as 'next of kin' Dependents - CC. Defined as 'those wholly or partially financially dependent on another'. However, it was also held that 'someone under a moral obligation' would NOT be CC. First Cousins - Sachs LJ indicated would be CC R v District Auditor ex p West Yorkshire MCC: 'inhabitants of west yorkshire' held to be CC. Re Tuck's ST: 'being of jewish blood' CC, and means 'someone of Jewish blood' Re Barlow's WT: 'friends' alone was NOT CC. Browne-Wilkinson provided some guidance as to the definition, characteristics including; long-standing friendship, which is social, and where parties meet frequently when had the opportunity to do so. Strong argument that sufficiently certain for DTs, although not yet answered by Courts, and Browne-Wilkinson held 'friends' alone cannot be CC.

CERTAINTY OF OBJECT FIDUCIARY POWERS 2. Conceptual Certainty

Re Gulbenkian: objects of the power included those with whom particular persons had been 'residing'. Held that this was not conceptually UNcertain because the court COULD determine whether a particualr person matched the description adopted At odds with Baden (No2), in which particular concepts needed a clear definition to be valid; though might be because latter case involved a DT or was decided slightly later

CERTAINTY OF OBJECT RESOLVING UNCERTAINTY Methods 3. Severance

Re Leek: held that not avaiable Re Wright's WT: CoA refused to give effect to the gift in favour of the named charities only. Therefore, CC in one part of definition is FATAL TO WHOLE But, severance has been recognised as regards charitable trusts (Re Clarke)

CERTAINTY OF OBJECTS FIXED TRUSTS SUBJECT TO CONDITIONS 2. Conceptual Certainty

Re Tuck's ST: conceptual uncertainty would not render a condition precedent void, whereas would invalidate a condition subsequent. Virgo argues that better view is that CC uncertainty will render any condition ineffective, either as a matter of law or simply in practice

CERTAINTY OF OBJECT FIDUCIARY POWERS 3. Evidential Certainty

Same test as DT

CERTAINTY OF OBJECTS RESOLVING UNCERTAINTY Methods 4. Wide Definition of Bs

Schmidt v Rosewood: can include widely defined class of objects which give the T's the widest possible discretion in determining who should benefit. Main obstacle = AW, but could be avoided in FP rather than trust power, as recognised in Blausten v IRC

CERTAINTY OF OBJECTS FIXED TRUSTS 5. Administrative Workability

Significant in relation to discretionary trusts, but no evidence that there is relevance for fixed trusts, because all of the necessary work is being done by the complete list test If possible to name all objects, should be no concerns about size of class being such that the trust cannot be administered

2. CERTAINTY OF SUBJECT MATTER Meaning

The subject matter can be real, personal intangible (such as a debt or covenant (lord strathicoma steamship v dominion coal)), etc. There must be some property that is subject to the trust Boyce v Boyce: the confusion in relation to subject matter can be in relation to the property itself, or the respective entitlements The subject matter must be: a. Described with sufficient certainty (Palmer v Simmonds) b. Be clearly identifiable (Re London Wine, Hunter v Moss)

CERTAINTY OF SUBJECT MATTER Future Certainty

Trust will NOT fail merely because subject matter is uncertain if the terms of the trust are sufficient to identify subject matter in the future (Pearson) In cases where SM relates to what is left of the property after T's death (Sprange v Barnard), can be no immediate trust, because it will not be certain at the time of creation what can be held on trust. This could instead be interpreted as a 'floating trust', which crystallises only on T's death. This has been recognised only in the specific circumstances of secret trusts (Ottaway v Norman), but no reason why cannot be applied more generally

CERTAINTY OF OBJECTS DISCRETIONARY TRUSTS 3. Evidential Certainty

Under Sachs LJ's approach, do not need to apply

CERTAINTY OF INTENTION Precaratory v Imperative Words Additional Instruction and Previous Precedent

Use of precaratory words may not exclude the finding of a trust where there are additional instructions or where the previous precedent is being followed Additional instructions - in both Re Adams and Comiskey 'in full confidence' was used. However, in the latter, was found to have intention as it went beyond this by giving a mandatory instruction/direction Previous Precedent - Re Steele's WT words used not otherwise sufficient to create a trust, but trust is written specifically using old precedent (Shelley v Shelley) where valid trust upheld - intention. the fact that particular words are used that have been previously recognised as being sufficient to create a trust is strong evidence that a trust was intended especially where the document was drafted by a lawyer

CERTAINTY OF SUBJECT MATTER B. Identity

Westdeutsche Landebank: even if the subject matter is 'defined', property must be identifiable Re Stapylton Fletcher: if not clearly identifiable, void Re London Wine: no trust, as the bottles for each customer had not been segregated from the bulk Re Goldcorp: only those customers where bullion had been segregated from bulk could establish a trust, where no segregation - no trust Identifiability is especially important where the subject matter is a part of a particular property

CERTAINTY OF INTENTION Testamentary Trusts

When determining whether a will has created a trust, an objective test is applied, save where any triggers for s.21 apply Re Freud: solicitor and daughter case. since clause was not meaningless or ambiguous, s.21 did not apply and extrinsic evidence of T's intent could be admitted. Ts objectively intended that solicitor and daughter to take property. Evidence submitted by S and D to show otherwise could not be relied upon as it was extrinsic evidence, and s.21 did not apply Loring v Woodland Trust: T should be teated as intending to leave as much money to family as possible without inciting liability for tax. Interpretation of the terms of the will may also be determined by subsequent legislation developments, e.g Re Hand WT children held to also include adoptive

CERTAINTY OF SUBJECT MATTER Absence

Where IDENTITY is uncertain, nothing to which trust can attach to, so if the property transferred from A to B, with the intention that part of it will be held on trust, B will take absolutely (Palmer v Simmonds) Where DESCRIPTION unclear, nothing that can be subject to trust, S retains the property If transfer of trust but uncertainty as to the division of it, e.g if trust fails because of uncertainty as to division of beneficial shares, T holds resulting trust for S because clear that T was not intended to have any property beneficially (Boyce v Boyce)

CERTAINTY OF INTENTION Sham Trusts

Where S has an ulterior motive to create a different set of rights Midland Bank v Wyatt: established that sham trusts are void and unenforceable Shooh v London and West Riding Investments: 'documents intended to give the appearance of creating legal rights and obligations different from the actual legal rights and obligations which the parties intended to create'

CERTAINTY OF OBJECTS FIXED TRUSTS SUBJECT TO CONDITIONS 1. Essential Test

Where T's are obliged to distribute the property subject to whether or not a particular condition has been satisfied: 1. the condition itself must be satisfied and certain 2. the test is dependent on whether the condition itself is a condition precedent or a condition subsequent

CERTAINTY OF INTENTION Self Declaration

Where a person purports to hold property for benefit of another Jones v Lock: held that it would be dangerous if 'loose conversations' were held to be sufficient; dad and baby case. Has to be an intent for the trust, not just an intent to gift Paul v Constance: evidence supported the conclusion that the money was intended to be held on trust, as deceased has confirmed 'money is as much yours as mine' Rowe v Prance: yacht case. C successfully sought declaration that yacht was on trust for both - crucial finding of fact was that had called it 'ours'

CERTAINTY OF INTENTION Essential Test

Whether the S wanted somebody to hold property for the benefit of another Sufficient to create a trust, even though the S did not understand that this was the effect of what they were doing Assessed objectively by reference to the terms of any agreement of the relationship between the parties (Pearson). Concerned with what the reasonable person would conclude was intended (Twincentra v Yardley)

CERTAINTY OF OBJECT FIXED TRUSTS SUBJECT TO CONDITIONS 4. Ascertainability

Will not invalidate since the object needs to establish that the condition has been satisfied If no object can be ascertained, condition will lapse and the property will pass to those entitled to the residue

CERTAINTY OF OBJECT FIXED TRUSTS SUBJECT TO CONDITIONS 5. Administrative Workability

burden on object to establish

CERTAINTY OF OBJECT RESOLVING UNCERTAINTY Methods 2. Third Party as Arbiter

trust may provide for an uncertainty as to object to be resolved by a TP Acceptable to resolve Qs of EC relating to identification of objects, e.g Re Tuck's ST: chief Rabbi - however, consideration should be had to the fact that Rabbi was expert in this field, so would same be said if for a friend?