Requirements of an Express Trust Flashcards
Broadway Cottages (uncertainty)
There comes a point when the trust cannot be upheld because it is not clear what the trustees are to do
McPhail v Dalton (general on trusts)
A trust will be upheld if it can (Wilberforce) ‘practicable certainty’
Edwards v Carter
Necessary age to create a trust
RE Beaney
A trust made by someone who is mentally incapacitated is void - however, the court may do it on behalf of someone who is mentally incapacitated
Lenham Bros
Intention to create a trust not a gift
Kinloch
The word ‘trust’ does need to be used to make a trust - Even if the word ‘trust’ is used it doesn’t necessarily mean that there is one
Re Diggles
Precatory words, e.g. wishes, desires, will show a lack of intent to create a trust in substance
Lenham Bros
Whether a trust has been created is an objective assessment, i.e. not the relationship between the parties but rather what the reasonable person would ascertain by what has been said
Re Adams and the Kensington Vestry
Not too much emphasis should be placed on the specific meaning of words used and circumstances can be taken into account - the whole of the document should be taken into account
Re Steele’s Will Trust
Strong evidence that a trust was intended can be construed by using a lawyer
Re Gulbenkian, Gold v Hill (interpretation)
It is for the court to make sense of what was intended by the expression of the words - they should intepret
Jones v Lock
Self-declaration of a trust (baby gift or trust? Baby couldn’t sign cheque and no trust was intended, cheque remained with father’s estate)
Paul v Constance, Rowe v Prance
Inference of a self-declaration of trust by saying things like ‘ours’ – also trusts which can be created orally
Clowes (No.2)
Courts are reluctant to find trusts in commercial context, here it was found because of what had been stated in a brochure
Richards v Delbridge (equity will not assist a volunteer)
If property is intended to be a gift but legal title is not properly transferred then it cannot be a trust as a gift is the opposite; no obligation
Midland Bank
A trust may be a sham even without any dishonest or fraudulent conduct
- Sham trusts are void and unenforceable
Dairywise Farms
Trusts can be declared over all types of property
Sprange (subject matter)
The subject matter has to be described with sufficient clarity - things like ‘the bulk’ ‘the remaining part of what is left’ ‘such parts she has not sold’ - are not sufficient
Re Last
‘Anything that is left’ is sufficiently clear
Re Golay’s WT (reasonable)
A ‘reasonable income’ was sufficiently clear - especially with evidence of standard of living
Westdeutsche Landesbank
The subject matter must also be identifiable
Hunter v Moss
Certain things which seem unidentifiable can be - here it was shares
Re Clifford (identifying subject matter)
on death, executors of a will can identify the subject matter e.g. 5% of shares because they have title and folllow the will’s obligations
Re London Wine (cf. Hayton), Re Goldcorp
Chattels in bulk - because the bottles had not been separated this was not sufficiently identifiable - they had not been separated and legal title had not passed - wine may seem the same but there may differences like in Hayton - they were corked
Re Harvard Securities
Intangible property (like shares) - more benevolent approach to identifying than chattels
Goode (person not case)
Numbering shares is not sufficient to make them different - analysis is different as shares are a fraction of a whole asset, therefore, a trust of shares sees the B merely become a co-owner of the single asset
MacJordan Construction
Money coming from a particular fund with intent - it must come from that fund
Burrough v Philcox
Even if the subject matter is identifiable, but the portion to each B unclear, then not de facto void - court can employ the maxim ‘equality is equity’ and divide equally
Lenham Bros
Just because a trust is uncertain at present, not automatically void if may not be in the future
Ottoway v Norman
‘Floating’ trust crystallising on death - this was secret trust but could be applied elsewhere
Broadway Cottages
Object must be sufficiently certain
Broadway Cottages
‘Complete list test’ for certainty of object for FIXED TRUSTS
Re Gulbenkian (Lord Upjohn)
It does not matter if the location of certain Bs cannot be ascertained, those who can be found will be paid and the remainder paid to court
Blathwayt v Lord Cawley
Stricter test of certainty applied to conditions subsequent in fixed trust - here it was held to be a valid condition and shows the change in courts’ attitude
Re Tepper’s Will Trusts
This was a condition subsequent ‘marrying outside the Jewish faith’ and Scott J applied an objective test
Re Allen
Just one person needs to satisfy the condition precedent
Re Tuck’s Settlement Trusts
Denning explained how conceptual uncertainty will not render a condition precedent void but would a condition subsequent
Sprange v Barnard (beneficiaries)
A discretionary trust will fail if uncertain as to potential beneficiaries
Re Leek
Red Baden’s No.2
‘a moral claim’ may be upheld for a mere power but not a ‘trust power’
Held to be conceptually uncertain
Broadway Cottages (discretionary trusts)
Initially there was no distinction drawn with fixed trusts - was very difficult as usually many more objects than fixed trusts so complete list test was difficult
McPhail v Doulton (discretionary trusts)
Rejected complete list test for discretionary trusts - also questioned it generally as may not comply with testator’s intention and also distributed very thinly so worthless
Warburton v Warburton
When then maxim ‘equality is equity’ has NOT been used as not seen to be beneficial
McPhail, Re Gestetner Settlement
‘Given postulant test’ - meant that finding some of the class for discretionary trust, but not all, sufficed for disc. trusts
Re Baden No. 2 (object)
There will not be certainty of object if the definition of the class is not sufficiently clear - ‘relatives’ and ‘dependent’ are conceptually certain
R v District Auditor, ex p West Yorkshire MCC
‘Inhabitant of W. Yorkshire’ and ‘Jewish blood’ were sufficiently certain, would seem that ‘my friends’ is not although dicta in Re BT is useful although concerns precedent condition trusts - still, strong argument that it is sufficiently certain
Re Baden No.2 (discretionary)
Evidential certainty - Sachs LJ is to be preferred as most consistent with Wilberforce in McPhail - proof of being in the class means it will be valid but failure to do so will see it fail
McPhail, R v Auditor, ex p West Yorkshire MCC
A class that is too wide is no longer a class - discretionary - Y MCC also concerns discretionary trust capriciousness - will be void if ‘no sensible intent to establishing a trust’
Re Baden No. 2 (admin. unworkability)
It is the size of the class that makes it administratively unworkable but a class of hundreds or thousands is not inherently defective (n.2)
Morice v Bishop of Durham (v. large class)
A court cannot execute a trust with a very large class - questionable as to why
Harpum (person), McKay (person)
Administrative workability (discretionary trusts) might work against the policy of excessive delegation - MCK however, this has been rejected as it runs contrary to respecting the settlor’s intention so should look instead to evidential certainty, i.e. an object proving themselves
Re Manisty’s Settlement
The former for ‘residents of G. Lon’ was capricious but the latter for ‘inhabitants of Yorkshire’ was not - size and also relationship as latter was council - NB, however, the former was a fiduciary case and a discretionary trust has never been void for capriciousness
Re Gulbenkian’s Settlements (fiduciary powers)
Certainty of object for fiduciary powers - it is sufficient that just one person fell into that class (same as conditions precedent)
Blausten v IRC - Re Hay’s Settlement
Buckley LJ suggested that a fiduciary power could be void for administrative unworkability - controversial - Megarry seemed to confine in Hay’s, but NB Gardner in Mettoy Pensions Trustees which appears to allow
Re Hay’s, Re Manisty’s (capriciousness, fiduciary powers)
A fiduciary power will not be capricious because of the size of the class, so a power for the whole world is fine as there is no identifiable class for it to be capricious - but one for people who have read Lord of the Rings maybe as may be accidental or irrelevant purpose -
Re Leek, Re Wright’s Will Trusts (severing)
Cannot severe a discretionary trust for two classes where uncertain, although can do for charitable PT, however, no logical reason why not - instead of frustrating intention entirely
Schmidt v Rosewood, Blausten v IRC (confirming), Re Hay’s (Megarry)
Intermediate power - wide definition of B
In S v R they accepted wide definition of Bs to give widest discretion, however, unworkability, however, there is an ‘intermediate power’(B) given where there really should be a fiduciary power, so they can appoint to anyone in the world except a small class of people - must be able to specify specific objects within class, however - this was rejected by M who said the only difference was that the int. power holder had to exercise rather than consider exercising
Morice v Bishop of Durham (B princp)
A court needs identifiable people in whose favour they can decree performance - a trust for purposes is VOID because there are no identifiable beneficiaries (this was not a charitable trust) however, there are exceptions
Re Denley’s
Some trusts appear prima facie to be for purposes but have identifiable persons who indirectly benefit
Perpetuities and Accumulations Act,
Perpetuity reformed CL rule of a life plus 21 years with 125 years and it starts when the trust instrument or will takes effect, or, with power of appointment, when that takes effect - after this time interest in property is void - there is no perpetuity rule for charitable purpose trusts as would contravene public benefit, but non-charitable are under CL rule still
Boyce v Boyce
If a trust’s subject matter is identifiable but the portion to each B is unclear (here, which house?) then the trust will be void for uncertainty
