Certainty of Intention Flashcards
What is the certainty of intention?
It questions whether a settlor intended to create a trust and not something else. Equity looks so substance and not form. It is about finding the intention of the settlor.
What is the test for certainty of intention?
Is whether on a construction of the words used and/or from the behaviour of the parties there is a clear intention that the property is to be held on trust for the benefit of a third party.
Is a mere expression to create a trust sufficient?
No it is insufficient, the intention must be unequivocal and clear, which intends to separate the legal and equitable ownership and impose the obligations of trusteeship on the holder of the legal title.
What type of words need to be used to obligate the recipient?
Imperative commanding words e.g. ‘I direct’, ‘you must hold on trust’ they leave no doubt that an obligation of a trust is intended.
Are precatory words such as ‘I hope’ and ‘I desire’ sufficient?
No. The words need to impose a mandatory legal obligation on the trustee.
What happened in Lamb v Eames?
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.
HELD: No trust created, no obligation, just precatory words.
What happened in Adams and Kensingston Vestroy?
A gift by will to a wife in full confidence that she will do what is right.
HELD: no trust again use of precatory words.
What happened in Steele’s Will Trusts?
Judgement confined to just these facts. Solicitor had used ‘I request my son to do all in his power’ a statement drafted from a previous case known as Shelley when precatory words were accepted. Judge had to rule it was valid even though precatory words aren’t accepted anymore
What happened in Shah v Shah? Rule?
Where there is written evidence, you have to look into what the words mean. The rule with lifetime declaration’s of trusts, is that you have to focus on the written evidence you cannot rely on extrinsic evidence.
What if there is no written evidence?
Paul v Constance?
Oral conversations, nothing was written down. It was their conduct and conversations that were looked at and they can be generally at to see if there is a certainty of intention to create a trust.
What happened in Rowe v Prance?
P was a married man having an affair with R. Bought a yatcht solely in his name, but referred to the yatcht as belonging to both of them ‘ours’. P left R and claimed the yatcht as his own.
HELD: she had a share of the yatcht as their oral conversations had created a trust with certainty of intention
Does the use of the word ‘trust’ make a trust enforceable? Tito v Waddell?
No. A governmental trust was acknowledged as not being enforceable by the court.
What are sham trusts?
Trusts that have no certainty of intention, the intention is not genuine.
How was sham trusts defined in Snook v London and West Riding Investments Ltd?
Sham means when things have been done or signed intended to appear to third parties or the court that there were legal rights and obligations which were actually different from what the parties actually intended.
What happened in Midland Bank plc v Wyatt?
Mr Wyatt had a declaration of trust draw up, declaring himself as a trustee of his house for his wife and daughter. He never told his family or his business partner nor his wife during the divorce. Business venture failed, attempted to use the trust against his creditors to claim they could not have the house as he was only holding it on trust.
HELD- sham trust, no real certainty of intention.
