Equities - The Three Certainties Flashcards
Knight v Knight
A trust must have three certainties over words/intention, subject matter, and objects. If just one is missing the trust will fail. There are different consequences depending on which certainty is absent.
Re Kayford
Certainty of intention
The term ‘trust’ is not necessary to create a trust. Words must have been “said” or “written”. Whilst imperative wording creates an obligation, precatory wording (such as “wish or “hope”) only creates hope and therefore do not create a trust.
Paul v Constance
Certainty of intention
Spoken words (“This money is as much yours as mine”) and conduct sufficient to demonstrate intention to create express trust.
Comiskey v Bowring-Hanbury
Certainty of intention
As the words of the trust created an obligation that the wife shall do something, this was deemed to be imperative words, therefore creates a trust.
Presence of precatory wording will not necessarily negate certainty of intention if later wording is sufficiently imperative.
Re Adams and B Kensington
Certainty of intention
“She will do what is right” was too precatory and no trust was created.
Certainty of subject matter:
Property - two questions…
Certainty of subject matter - Trust property itself
Beneficial entitlement, i.e. how much of the trust you are entitled to.
Palmer v Simmonds
Certainty of subject matter - Trust property itself
Words “Bulk of my estate” do not create certainty of subject. “Bulk” is not capable of objective determination. In this case the trust was void.
Re Golay’s Will Trusts
Trust property itself
Issue with definition of “reasonable income”. Court determines what is reasonable because the word “reasonable” is deemed to be objective. Therefore there was deemed to be certainty.
Re London Wine
Certainty of subject matter - Trust property itself
If property is tangible and not segregated, there is no certainty.
Hunter v Moss
Certainty of subject matter - Trust property itself
If property is intangible and not segregated, the certainty is not breached. However, it must all be within the same class (e.g. ordinary shares).
Boyce v Boyce
Certainty of subject matter - Beneficial entitlement
Three houses left to two daughters. Term was that Mary gets to choose first, then Charlotte gets remaining two. Mary died before choosing, Charlotte could no longer take entitlement since it was unclear which two houses were hers, therefore uncertainty of subject matter.
IRC v Broadway Cottages
Certainty of Objects - Fixed Trusts
COMPLETE LIST TEST: FT requires a comprehensive list of each and every beneficiary. Need conceptual (can the group be defined?) and evidential certainty (can the people be ascertained?)
McPhail v Doulton
Certainty of Objects - Discretionary Trusts
GIVEN POSTULANT TEST: Certainty valid if it can be said with certainty whether any given postulant is or is not a member of the class of objects (aka the “is/is not test”).
N.B. unlike with fixed trusts, certainty of object for discretionary trusts appears to be concerned only with conceptual certainty (not evidential certainty)
Re Baden
Certainty of Objects - Discretionary Trusts
Guidance on the is/is not test:
- All judges agreed conceptual certainty required but disagreed as to whether the presence of “don’t knows” would mean the failure of the GPT for certainty of objects.
- “Relatives is conceptually certain”
West Yorkshire Metropolitan CC
Certainty of Objects - Discretionary Trusts
Trust can fail due to administrative workability: If size of class / numbers are too large to form a class, it may make the trust administratively unworkable.
