Certainty of Subject Matter Flashcards
What is certainty of subject matter?
An exact amount does not need to be stipulated but the property forming the subject matter of the trust has to be capable of being clearly defined at some point in the future.
What is the meaning of reasonable sum in the context of income? what case? How can you work it out, is it valid?
Re Golay- it can be quantified objectively to calculate a reasonable sum. You have to use precice words to get certainty of subject matter.
HELD: that the executors had enough background information about her lifestyle that they could calculate what a reasonable sum would be.
What are the problems with bulk unsegregated assets?
There is no clear identification of what property exactly is the subject matter. You cannot just pick one at random, it needs to be segregated.
What happened in Re London Wine Company?
Wine bottles stored in a wine dealers warehouse. Dealers sold wine to customers but never separated the customers purchases out of the main stock in the warehouse. Went bust. Customers that had paid for wine argued they were held on trust for them and could not be used to pay off the companies assets.
HELD: no certainty of subject matter unless the actual bottles had been picked out and segregated.
What happened in Re Stapylton Fletcher Ltd? How is different from Re London Wine
The wine had been segregated and put in different part of the warehouse as well as a written record of which bottles had been bought for home. Thus there was a trust for the wines that were segregated when the company went bust.
HELD: certainty of subject matter
What happened in Re Goldcorp Exchange Ltd?
Bullion dealer had gone into liquidation, some of the customers gold had been segregated in safety deposit boxes in the vault.
HELD: certainty of subject matter for those segregated. None for the customers bullions that weren’t
What happened in Hunter v Moss? (tried to fuck him and got fucked)
H worked as a finance director of a company called Moss Electrical Ltd. M in an oral conversation with H said 5% of his shares are his as an employee incentive. No shares ever transferred, under Paul v Constance you can have an oral declaration of trust for personalty. Moss company sold to a bigger company M tried to keep his shares.
HELD: 1st decision no segregation, no certainty of subject matter not sure which shares would be H’s.
CA: Valid trust even though there is no segregation, seems like they felt sorry for H.
What are the criticisms of Hunter v Moss?
Hatton- the case is wrong, you should always have segregation otherwise there is no certainty of subject matter.
What the critiques of the criticisms of Hunter v Moss? Re Harvard Securities
Martin- equitable tracing rules could be used to identify the shares. Could argue segregation is for tangible things, and shares are intangible but this was not the case in Re Harvard Securities
What happened in Pearson v Lehman Brothers?
Judge had to decide whether there was a trust if shares hadn’t been segregated. Could argue that all the shares in the company are co-owned, then you can have a trust for unsegregated shares. 95% legal owner, 5% equitable owner so if sold the proceeds are split.
What is the Sales of Goods Amendment Act 1995 about, could Re London Wine Company be decided differently?
Yes. The act sattes that the sale of a specified quantity of unascertained goods forming part of an identified bulk will acquire property rights as tenants in common e.g. co-ownership.
Can you have certainty of subject matter if trying to declare a trust over future property, things you may never own? case?
No
Re Ellenborough- tried to create a trust over what she might inherit from her siblings, but they were not dead yet and could have left their money anyone.
What are the problems if the subject matter is money?
Needs to be segregated.
Re Lewis’ of Leicester was ok because the money had been placed in a separate bank account.
What happened in MacJordan Construction Ltd v Brookmount?
M were builders carrying out work for B, their contract had a provision that B could keep back 3% of the price for the job until all the building work had been finished and put right. B went into liquidation.
HELD: no certainty of subject matter, 3% of what?
What happened in Hemmens v Wilson Browne?
Mistress and Mr P, Mr P drew up a document with a solicitor stating the mistress could in the future at any time ask him for the sum of £110,000 to buy a house. The relationship broke down. Mistress tried to claim the money.
HELD: no certainty of subject matter, no identified fund where the £110,000 would come from. Too vague.
