Express Trusts - 1 Certainty Of Intention

Question 1

What are the general principles of intention?

Answer 1

It’s the settlor’s intention
 Cf common intention in contract and elsewhere
But still an objectively construed intention
 What S appeared to mean to a bystander, not what S
thought he meant
We take in the surrounding context and
knowledge of the settlor
 As in contract law

Question 2

Re kayford ltd 1975

Answer 2

Trust created without use of the word ‘trust’

- Tried to create separate account for clients where money held in trust, which would also allow for debt shielding - if insolvency happens it doesn’t go to the creditors but back to the customer - thought it would boost customers confidence
- Did go bust and question of whether trust was effective
- But they didn’t use the word trust or put it in account called customers trust account, just random account
- Despite not using word, given the purpose and aims it was a trust - not necessary to use specific phrases, looking for substance

Question 3

Tito v waddell no2 1977

Answer 3

No trust despite the use of the word ‘trust’

- Promised to hold royalties for mine in trust
- Were former owners in land entitled to property in equity or a money substitute - depends on whether colonial gov had actually created a trust
- Answer was no - terms of agreement were wholly inconsistent with what a trust was
- Might have used the word trust but it didn’t act as a trust

Question 4

What type of words are ideally required?

Answer 4

Imperative words required:
	 ‘on trust for’
	 ‘I declare’
	 ‘I direct’
We are binding the trustee to onerous 
obligations if a trust is found.
We need to be sure this is not a gift!

Question 5

Lambe v Eames 1871 (precatory words)

Answer 5

in any way she may think best’

• Leading case despite being old
• Lamb trustee gave estates to widow to be at her disposal for the benefit of her and her family
• In widows will she gave half of the estate to an illegitimate son
• Was she allowed to do this or was she directed to only give it to family, which in those days meant legitimate kids
• High court rejected and said it was a gift
• Appealed and COA, appeal was dismissed
• Not going to bind a donee to words that are too vague to hold someone to
• Court does not make a moral judgement or look at motive, they look at intention and whether the intention be certain

Question 6

Re adams and kensington vestry 1884 (precatory)

Answer 6

in full confidence that she will do what is right’

• Gift, husband dies leaving everything to wife, if confidence she will do whatever is right
• Court didn’t believe this created a trust as they’re vague precatory words
• LJ - turning the wishes into legal obligations would be pretty mean, and the substance of these words was that the donee could dispose of them freely

Question 7

Re Diggles 1888

Answer 7

it is my desire’

• It is my desire she receives 25 pound a year of life to her friend
• Are the words so that it’s a trust or so precatory that it’s a gift
• Makes it more difficult than others as it’s a friend not a widow
• It is a loosely worded obligations
• Court said its precatory, it is not binding

Question 8

Comiskey v bowring Hanbury 1905 (broad look at words)

Answer 8

Complex and included some precatory words, but as a
whole was imperative
- Mixture of imperative and precatory words
- At first instance LJ said it was precatory no trust, applied law mechanically
- On appeal agreed
- HOL looked at it in more broad approach
- Good case for interpretation of words
- Interpretive words had been interpreted in light of precatory ones - so HOL said the person intended it to be a trust - don’t fixate on one thing, look at it as a whole

Question 9

Sham, fraud and skullduggery

Midland Bank v Wyatt 1995

Answer 9

• Create big business, create trust to protect from insolvency
• Business did fail and creditors did go after family home
• Husband argues family home was on trust in equity, making him just the trustee so they cant claim to property
• Turns out trustee was a sham, he’d executed it and put it in safe just in case
• So there was never any intention to hand over family home to wife and daughter unconditionally
• There was no certainty in intention

Question 10

Massively discretionary trusts

JSC Bank 2017

Answer 10

• Billionaire, set up trusts to hide trust ownership of his wealth
• Not keen on giving up control, but this is one of the aspects on the trust as operating as a trustee for the benefit of others
• Said intention was to retain control, not an intention to give up control, so this isn’t the actions of a trust
• No certainty of intention to set up genuine trust