Express Trusts - 3 Certainty Of Objects

Question 1

What does certainty of objects relate to?

Answer 1

The beneficiaries

Question 2

What is conceptual certainty?

Answer 2

E.g. Parent; graduate; relative; co-worker; friend
 Are these certain?
- Just looking at the word, is it precise and certain

Question 3

What is evidential certainty?

Answer 3

 Is X a parent; graduate; relative; co-worker; friend on
the evidence?
- Can you prove it - like parents there will be birth certificates - or graduate they will have piece of paper

Question 4

What happens with fixed trusts?

Answer 4

No discretion as to what to appoint to who, no decisions just administrative job
Complete conceptual 
and evidential certainty 
required (‘complete list’):
 IRC v Broadway Cottages 
(1955); confirmed in
 OT Computers Ltd v First 
National Tricity Finance Ltd 
(2003)

Question 5

What are discretionary trusts or trust powers?

Answer 5

- Big class trusts, not just for a few family members
 All relevant property must be appointed, but otherwise T has discretion how
- Complete list of all the beneficiaries required for it to be valid originally

Question 6

Which cases said there needed to be a complete list for trust powers?

Answer 6

IRC v Broadway Cottages (1955)
 Burrough v Philcox (1840)
 Rejected later

Question 7

trust powers)

McPhail v Doulton, Re Baden’s Deed Trusts (No 1) [1971]

Answer 7

• Wished to set up beneficials fund for the company, their relatives and dependants
• Problems of making this trust manageable - term relatives in conceptually uncertain so where do you stop with concept of relatives
• Term employee requires good record keeping, if there no evidence of who was employee its problem - even dependant not very certain
• In the case it only focused on who was a relative for the purpose of the trust - isn’t going to be possible of whose a relative of every employee of the firm
• Bdens children fought against it because they wanted the money - Fought against trust saying it was invalid (spoke of
• About how this trust might not be manageable and what would be needed to manage it
• Said a list was needed if the trustee leaves the court would need a list to be able to manage it themselves
• So court developed…
   Test from McPhail: Can one ascertain if any given postulant is in the class or not (‘individual ascertainability’ or the ‘in or out test’)
• Would only have to determine if that particular person/ postulant was a member of the class of group or beneficiaries

Question 8

Re Baden’s (No 2) [1973]

Sachs LJ:

Answer 8

Enough to be able to prove X is in the class.

• No need to positively prove X is not in the class.
  
  • Look for applicants of the trust, if they can prove they’re an employee or relative they will get a share - this is way to save the trust

Question 9

Re Baden’s (No 2) [1973]

Megaw LJ

Answer 9

And a substantial number of objects
Required
- Must be substantial number of objects in the class to apply in or out test

Question 10

Re Baden’s (No 2) [1973]

Stamp LJ;
not good law

Answer 10

Must be able to positively prove whether X
is in or out of the class
- Another requirement to positively prove if someone is in or out
- But in doing this you’re going to end up with a complete list
- This requirement had just be rejected by HOL so hard to see this as good law
- LJ then bodged it and said relatives should be read down to be just next of kin - but he was in a minority of one here

Question 11

Curing certainty via delegation

Re Wynn [1952]

Answer 11

• Given wide powers to basically do what they like
• Court said trust not valid because near complete control in repugnant to concept of trust (as trust is giving over power) trustee has so must power it ousted supervision of the courts
   Wide clause purporting to give T powers to determine what
  passed under each specific request(!)

Question 12

Curing certainty via delegation

Re Coxen [1948]

Answer 12

• more orthodox in way trust set up
• Testator left house to trustee with life interest for wife, so she lives in house until she dies
• But life interest would cease, in opinion of trustees, she had ceased permanently to reside in it
• Problem, what does reside mean? Not a clear cut off point
   ‘if in the opinion of my trustees she shall have ceased
  permanently to reside’

Question 13

Curing certainty via delegation

Re Tuck’s ST [1978]

Answer 13

• Orthodox in a different way
• Income provided by discretionary trust by tuck for his descendants porvided he be of jewish faith and living with approved wife
• Grandson og married approved wife but then remarried an unapproved woman
• Trustee specified who was an approved wife, one parent needed to be jewish which is pretty cetain
• Problem was providing the wife hadnt departed from faith and continues wirshop
• He appointed a referee, a rabbai of the jewish community to decide if this was the case
• Court keen to uphold then trust so more like Coxen - didn’t try to oust the courts and make it an uncontrollable trust
• So was infavour of the grandson - he could benefit up until the point he remarried, then he would have t repay everything he took after that as second wife unapproved
   So long as he be of the Jewish faith and living with ‘an
  approved wife’

Question 14

Unlike fiduciary powers, what has to happen with the money in discretionary trust

Answer 14

All money has to be spent or given out

Question 15

What are Fiduciary powers/ mere powers?

Answer 15

The power does not have 
to be exercised in favour of the class
	- So trustee doesn’t have to exercise power, can give it to the gift over, within limits
But the T must consider 
exercising it

Same test as for 
discretionary trusts (McPhail) - this is where they got the test from for that

Question 16

Fiduciary powers/ mere powers

What to look for?

Answer 16

Look for a ‘gift over’
	 Re Gulbenkian’s Settlements 
	[1970] AC 508 (HL)
	 Re Gestetner’s Settlement 
	[1953] Ch 672 (Ch)

Question 17

What is a series of gifts subject to a condition precedent?

Answer 17

Gifts can only be given to certain Type of people that satisfy the condition, that condition defines the class of people that can benefit from it

 I.e. fixed sums (or equivalent) that T must appoint to beneficiaries in the class defined by the condition precedent

Question 18

series of gifts subject to condition precedent)

Re Allen [1953]

Answer 18

Condition that B ‘shall be a member of the Church of England and an adherent to the doctrine of that Church’
Pretty uncertain condition, but following coxen could probs ask someone from church of England to umpire

Question 19

series of gifts subject to condition precedent)

Re Barlow [1979]

Answer 19

class is ‘Friends’ and ‘family’

• There no discretion, they get x amount of money or the benefit each
• Overall price of the gift will go up with the size of the class, not a definite amount of people, will just apply to more and more people
• Both of the conditions are very uncertain
• Justice said fiends is very conceptually uncertain, but for this class of gift it doesn’t matter
• But why is it a weaker obligation that a discretionary trust or power?
• Don’t need anything like a complete list or wide number of people, you just announce the benefit and wait for people to show up for it, not a fixed amount of money that’s going to go down disjointing everyone else in the class, everyone will get
• Looser obligation and consequences of getting it wrong are less severe

 Test: Can one can say with certainty that some person would clearly be a member of the class?