Certainties

Question 1

What are the Requirements For The Creation Of Express Private Trusts?

Answer 1

• CERTAINTY : Beneficiary principle/ Unincorporated associations, the Three Certainties
• FORMALITY: S53(i) b, S53(i)c, S53(ii) LPA 1925; S9 Wills 1837, Secret Trusts
• COMPLETE/INCOMPLETE CONSTITUTION: Milroy v. Lord, Doctrine of Every Effort, Rule in Strong v Bird, Donationes Mortis Causa, Proprietary Estoppel

Question 2

What are The Three Certainties?

Answer 2

• Intention (words)
• Subject matter
• Objects (beneficiaries)

Question 3

what case was the three certainties established and by whom?

Answer 3

Per Lord Langdale in Knight v. Knight

Question 4

how can intention be established?

Answer 4

• Words are not necessary : Paul v Constance [1977];
  Sumir Singh Dhingra v Surjit Singh Dhinga [1999];
  Re Kayford Ltd [1975], cf Margulies v Margulies [2000]
• If used, words must be imperative, not precatory Executors Act 1830,
  Lambe v Eames (1871)(‘to be at her disposal in any way she may think best, for the benefit of herself and her family‘ cf
  Hart v Tribe (1854) (“for her own benefit and the children’s benefit as she thought fit in her judgment.“)

Question 5

Precatory words: no trust

Answer 5

Re Hamilton [1895] 2 Ch 370
I wish them to bequeath the property.

Re Johnson [1939] 2 All ER 458
Property to wife “I request that on her death she leave her property to her four sisters”.

Question 6

Precatory words but context prevails

Answer 6

Comiskey v Bowring-Hambury [1905]
Testator left his estate to his wife ‘in full confidence that she will make such use of it as I should have made myself and that at her death she devise it to such one or more of my nieces as she think fit and in default of any disposition by her thereof … I hereby direct that all my estate and property acquired by her under … my will … be equally divided among the surviving said nieces”.

Re Steele’s WT [1948]

Question 7

Certainty of subject-matter

Answer 7

There must be certainty as to what property is to be held upon trust.

There must be certainty as to the extent of the beneficial interest of each beneficiary.

The property must exist.

Question 8

Certainty of subject-matter: cases

Answer 8

Palmer v Simmonds (1854) : The ‘bulk ‘of my residuary estate’

Sprange v Barnard (1789) : to H for his sole use and at his death, the remaining part of what is left and that he doesn’t want to be divided between B & S equally. No trust but an absolute gift. There is no certainty as to what is left at H’s death and he is entitled to spend the whole sum.

Re Jones [1898] ‘such parts of my estate as she shall not have sold’

Anthony v Donges [1998] 2 FLR 775, testator’s widow to get such minimal part of the estate as she might be entitled to under English law.

Question 9

Certainty of subject-matter: cases

Answer 9

Boyce v Boyce (1849): – for A, whichever she shall choose, the other to B

Re Golay (1965) ‘a reasonable income‘ connotes an objective yardstick which the courts can apply

Effect of uncertainty - no trust but cf Boyce v Boyce: a resulting trust to testator’s estate.

Question 10

Certainty of subject-matter: Future property

Answer 10

Norman v Federal Comr of Taxation (1963) (Windeyer J.)”As it is impossible for anyone to own something that does not exist, it is impossible for anyone to make a present gift of such a thing to another person, however sure he may be that it will come into existence and will then be his to give.”

Question 11

Certainty of subject-matter: Fungibles/undifferentiated items.

Answer 11

Re London Wine Co Ltd (1975) 126 NLJ 977 ( no trust because bottles of wine had not been appropriated to the contract)

Hunter v Moss [1993] 1 WLR 934 : tangible v intangible assets (50 shares in Moss’s company)

Re Goldcorp Exchange [1994] ( gold bullion not appropriated to the contract. Hunter v. Moss distinguished.

Holland v Newbury [1997] (Re Harvard Securities) (Neuberger J.)

Hunter v Moss followed. Shares were a special case.

Question 12

Certainty of subject-matter: Is Hunter v. Moss correct?

Answer 12

the case was “fair, sensible and workable… [it] is a welcome example of the court’s policy of preventing a clearly intended trust from failing for uncertainty”. Jill Martin, Certainty of subject-matter: a defence of Hunter v Moss,’ Conveyancer and Property Lawyer (1996) p227

“Logically the decision in Hunter v Moss appears a sensible one”, [ but does create “difficult questions”. Jones, Alison (1993). “Creating a trust over an unascertained part of a homogeneous whole”. Conveyancer and Property Lawyer p 471
“the unreserved judgment of Dillon LJ…. may well come to be stigmatised”. David Hayton, (1994).

“Uncertainty of subject-matter of trusts”. Law Quarterly Review 110
the decision in Hunter v Moss is wrong and should not be relied upon because a)it contradicts the requirement for “specific and identifiable property” and b) a dividing line between intangible and tangible property is spurious : 500 ball bearings are tangible, but identical; there is no reason these should also not require separation, Alastair Hudson, (2009). Equity and Trusts (6th ed.)pp102-04

Question 13

Effect of uncertainty

Answer 13

No intention – donee takes beneficially

Property not defined – no trust

Intention and property are certain but objects are uncertain – resulting trust for settlor or estate.