Express Trusts Flashcards
Rochefoucald v Boustard
Formalities of express trusts
Oral agreement
Land has been on trust, valid trust was created even though formalities had been ignored
Equity does not follow the law slavishly
Chambers v Fahy
Three certainties
- words of intention
- certainty of subject matter
- certainty of objects
Thexton v Thexton
Certainties of words of intention
The courts will examine the substance and intention of the words in light of surrounding circumstances
Re Adams and Kensington Vestry
Certainties of words of intention
Precatory words - “in fullest confidence of what is right” used
Provided a moral obligation but no binding legal obligation
Re Coulson
Certainties of words of intention
Testatrix left farm in her will
It was her wish that whoever obtained it as they needed it
Too vague language - no binding obligation
Comiskey v Bowring-Hunbury
Certainties of words of intention
Document will be read as a whole
The use of precatory words will not be fatal
The use of “in full confidence” did not negate the imperative language in the rest of the document
If there is no certainty of intention created in a trust, an absolute gift is created in the will.
Boyce v Boyce
Certainty of subject matter
One of the daughters died who was to have made the selection before the selection was made
Trust failed for certainty - no certainty as to who would take over
Palmer v Simmons
Certainty of subject matter
“The bulk of my residuary estate” - no certainty
Re Golays Will Trust
Certainty of subject matter
“Receive a reasonable income”
No certainty as to what reasonable income is
Hunter v Moss
Certaintyy of subject matter
50 shares – no specification of which shares – they were all the same so it did not matter
IRC v Broadway Cottages Trust
Certainty of objects/beneficiaries
The trust just be one that the court can control and execute
Re Endacott [1960] Ch 232, 246:
The Complete List Test
“[T]he trust must have ascertained or ascertainable beneficiaries.”
Trustees have no discretion when there is a fixed trust and therefore do not determine who the beneficiaries are or what share/ interest they are to have (as opposed to a discretionary trust).
IRC v Broadway Cottages Trust:
Here it was found that, it must be possible to draw up a complete list of the members of that class - the class must have sufficient conceptual clarity and certainty.
Re Gulbenkian’s Settlements [1970] AC 508
The Complete List Test
The Gulbenkian test demands conceptual certainty and requires that it can be said with certainty whether any potential object is a member of the class.
Most stringent test in this area
McPhail v Doulton [1971] AC 424
Discretionary Trusts - ‘Individual Ascertainability’ Test
Less stringent test: “[A discretionary] trust is valid if it can be said with certainty that any given individual is or is not a member of the class.”
Settlor set up trusts for his employees and their relatives and dependents.
Trustee had absolute discretion to apply the trust fund. Court will exercise this power if they fail to do so.
Although it was not possible to list all of the possible beneficiaries, there was no essential difficulty in deciding whether any particular person could benefit.
Re Parker [1966] IR 308, 318
Discretionary Trusts - ‘Individual Ascertainability’ Test
Irelands approach!
This was however considered to be a question of whether or not it was utterly impossible to identify the class for the trust.
Re Baden’s Deed Trusts (No 2) [1973] Ch 9, 20
Evidential Clarity
In this case, the words ‘relatives’ and ‘dependants’ were deemed to be sufficiently conceptually certain.
Gold v Hill [1999] 1 FLR 54
Evidential Clarity
Trust for “Carol and the kids”– the deceased had children from preceding relationships – this established a general intention with sufficient clarity.
R v District Auditor ex parte West Yorkshire Metropolitan County Council (1986) 26 RVR 24.
Administrative Unworkability And capriciousness
‘[A]ny or all or some of the inhabitants of West Yorkshire’ - found to be administratively unworkable.
Milroy v Lord (1862) 4 De GF & J 1264, 274.
Perfection of Gifts
where the intervention of a third party is necessary to complete the transfer, the equitable interest transfers once the settlor has done everything in their power to make the transfer effective.
Re Rose [1952] Ch 499
Transfer of property to trustees
done died before transfer registered
Re Fry [1946] Ch 312.
Transfer of property to trustees
A donor tried to transfer shares but this could not be done without the consent of the Treasury. He had not done everything in his power to effect the transfer.
Pennington v Waine [2002] 1 WLR 2075.
Transfer of property to trustees
Trust became effective once the share transfer form was signed by the donor, regardless of the lack of a counter-signature.
Jones v Lock (1865) Ch App 25
Declaration
Intention to declare a trust must be demonstrated - strict approach.
Cheque given to son, not endorsed, died - no clear intention
Paul v Constance [1977] 1 WLR 527
Declaration
‘the money is as much yours as it is mine’.
Held: this was sufficient to be deemed a declaration of trust.
Strong v Bird (1874) LR 18 Eq 315.
Rule– Where there is an immediate gift and the settlor subsequently vests the legal title in the trustee or beneficiary, the trust becomes enforceable.
If someone says they want to give a gift to someone and then later names that person as the one who will handle their affairs after they die, if they don’t change their mind, the person they named as the executor gets to keep the gift. This means that just saying you want to give a gift to someone and then naming them as the executor makes the gift final.
Re Wilson [1933] IR 729
Exceptions: Strong v Bird
A stockbroker agreed to bequeath certain properties to his son (no immediate gift), who was then named executor of the will.
The agreement was voluntary and incomplete and could not be enforced.
Court held that the rule in Strong v Bird applied to perfect a gift where an immediate gift of certain securities was concerned.
This was not an immediate gift; merely a promise of future tresamentary benfaction.
Re Stewart [1908] 2 Ch 251, 254-55
Exceptions: Strong v Bird
There must be a continuing intention to make the gift perfect until the date of the donor’s death. If the donor changes their mind prior to death, the rule does not apply.
Re Wale [1956] 1 WLR 1346.
Exceptions: Strong v Bird
The settlor continued to treat the property as if it were their own - no application of the rule.
Cain v Moon [1896] 2 QB 283
Exceptions: Donatio Mortis Causa
“[T]he gift or donation must have been made in contemplation, though not necessarily in expectation, of death.”
Agnew v Belfast Banking Co
Donatio Mortis Cause – “impending death”
The gift will be perfected on the donors death
Wilkes v Allington [1931] 2 Ch 104
Exceptions: Donatio Mortis Causa
The cause of death is immaterial
Sean v Headley [1991] Ch 425
Exceptions: Donatio Mortis Causa
Held: no reason in principle why transfers of bonds etc, which can form the basis for a donatio, could not be extended to deeds for land.
One reason might be the requirement for deeds to be in writing (S.5 Irish Statute of Frauds). However, this is subject to an exceptions for trusts.
It would seem property may form the subject matter of a donatio mortis causa.
