Equity and Trusts - 3 certainties Flashcards
What must ever trust satisfy ?
Every trust except cpt must satisfy 3 certainties Knight v Knight
What are the 3 certainties and what must they all do
Certainty of intention- is a trust intended Certainty of subject matter- what property is to be subject to trust and who are the beneficial interests Certainty of objects- who are the beneficiaries of the trust- is or is not testThey all must be sufficient
Certainty of intention - in relation to the prop in q what must settlor testator have
Settlor or testator must have greater clear certainty of intention - needs to be clear
Why must we satisfy?
1 - trustees need to know their trust obligation under trusts - can be liable for breach of trust if fail to carry out obligations 2 - 3 cert provide trustee with degree of protection by ensuring obligations are clear 3 - satisfying ensures if neck ct itself will be able to admister that trust
What is extra for trusts?
Trusts can be declared orally or in writing 3 cert apply to all trusts but cpt Must also satisfy formality req in respect of type of property E.g 3 cert sat but no formality eg not evidence in writing = unenforceable Settlor to inform trusteee
How is intention established
Intention is established by considering all circumstances of case
What does equity look at
Equity looks at intent rather than form
In working out intention what are the indicators to look out for
Clearest way to demonstrate is to use word on trust
What if On trust isn’t used
If I’m trust isn’t used - cpt will imply a trust where other words are used which are imperative enough to show mandatory trust obligation was intended - ct - imply - imperative
Indicators to look out for no. 2
Imperative, predatory Lang and conduct
Case in regards to conduct
Staden v Jones - not neck refer to word trustee by words/acts done by settlor must have intended that meaning Also constructive test
What did court also say in staden v Jones
Ct said important to construe whole doc purporting to create trust Did he really intend trust obl to kick in here, pure words for an absolute gift?
What was said in lamb v eames
Lame v eames Distinct precatory and impl CT’s
What is precatory?
Express hope, wish, moral obligation = usually indicates gift was intended
What is meant by imperative
Express a command, duty to do something - indicates usually trust or power
Examples of this precatory words?
Lambe v eames - way she may think best Re Adams and Kensington vestry - in full confidence Re diggles- it is my desire Mussorie bank v raynor Re Hamilton- I wish Re Williams - I bequest that
But - about precatory terms?
Although CT’s guided by language - remember just as there’s no magic in word trust - kinoch v Secretary of State for individ - precatory words will not prevent CT’s from finding trust if that’s what donor intended
E.g of courts not always relying
Comiskey v browning- Hambury Testator said in full confidence - look at gift how CT’s looked rest of will = trust
What is meant by conduct
Intention can also be conferred by conduct of the donor
What case was in relation to conduct
Paul v Constance - bingo - trust extended
Similar approach to Paul in which cases
Re jay ford Ltd - customer money in diff bank account Jones v lock - did not create trust Dhingra v dhingra - trust son was held entitled to money Saunders v vautier- if you are true owner of money - each can transfer legal title t you and terminate trustee
What is the effect of lack of certainty of intention?
If no intention to create trust or power - donee will take prop as an absolute gift - lassence v tierney & not as trustee for another others
What is so part to this
So if strong imperative = precatory = won’t suffice for cert of int- but courts look at whole - can be a trust but most cases won’t be
Trust will arise when we
If strong / imperative enough that anew obligation trust obligation was intended to the property
What is certainty of intention a question of?
It’s a q of construction
Certainty of subject matter?
2 elements in regards to this
What are the 2 elements of certainty of subject matter
It must be clear what prop is held on trust e.g account / shares - so trust can bite - beneficial interests must be clear If not certain or clear trust will fail
What is meant by prop held on trust must be certain
If not clear / trust = void as trustees beneficiaries . Ct won’t be able to determine what is held on trust
What is meant of trust or part prop
This arises where attempt to create a trust over part of a bulk of tangible property
E.g of part prop
E.g furniture in a house or warehouse filled with desktop computers . Where there’s is a trust ofpart of bulk of tangible prop, trust prop will only be certain if separated from trust
Cases for uncertain prop
Palmer v simmonds- the bulk of Peck c Halsey - some of the best .. Anthony v dodges Jubber v jubber Re kolbs wt
What happened in re London wine co
Re London wine co was uncertain - wine paid for not segregated = unidentifiable
What is contrast case for re London co?
Hunter v miss - didn’t specifically say which 50 shares trust was upheld - on ground that shares were intangible assets - but could disntiguuish shares = controversial case -
What was this approach also endorsed in
Endorsed in re Harvard securities Ltd
What’s good about this distinction
Physical seg and intangible like shares which didn’t need seg, trust could arise- loads of people never liked bc said lacked logic
What’s a note to take in
Sales of gooddd ammendant act 1995 , context of sales - reverse dec in the London to allow prio sellers other creditors look back st this
What happened in Anthony v donges ?
You can have a gift of residue
What about the sales of good act specific section?
S.20 soga 1979 - offers protection to purchases of an unseg part of larger bulk of prop - ass soon as they have paid, purchasers will be considered tenants in common or the whole prop. Has the effect of protecting their purchases from creditors in the ever of liquidation / receivership mHw where there is a trust of part of some intangible prop, e.g shares = no need to identify shares to be held on trust
What is a tip you could use here?
Hunter v moss - applies to trusts part of a large whole Pg- look at facts e.g if portion of shares and diff types of them or relate to shares diff companies = hunger = not apply and trust will be void if not further identification of rel property Re Harvard securities Ltd in liquidation
How could you get extra marks
Despite fact hunter v miss followed in re Harvard securities Ltd & more recently complex finiancial securites in Pearson v Leahman brothers finance = criticisms
Who were the criticisms by?
Hayton in 1994 110 LQR 335- no of arg
What is arg number 1 -
Come back
Arg number 2?
Come back