Requirements of Express Trusts Flashcards
Requirements for express trusts
certainty of intention certainty of subject certainty of objects beneficiary principle perpetuity rules
properly constituted (title vested) formalities
3 certainties requirement
Knight v Knight
Certainty of intention
Objective intention (Challioner v Juliet Bellis) from the view of an objective, reasonable person (Byrnes v Kendle)
Nature of intention
Not general, equity will not help a volunteer (Richards v Delbridge)
How to determine
Look at the whole document if any (Re Adams and Kensington Vestry)
Words and conduct (Paul v Constance)
Freedom to mix up trust property with own property
No intention (Henry v Hammond)
Requirement for intended trustee
Consent needed (Robinson v Pett) but won’t fail for want of trustee (Harris v Sharp)
Trustee vs settlor
Trustee’s intention < settlor’s intention (Hallows v Lloyd)
Duties
Must take on everything, not just pick and choose (Re Lysaght)
Self-assuming trustee
Not possible (Jasmine Trustees v Wells & Hind)
Consent from beneficiaries
Required (Standing v Bowring, Hardoon v Belilios)
Certainty of subject for tangible property
Objective construction (Palmer v Simmonds - ‘bulk’ X, Re Golay’s - ‘reasonable outcome’ Yes)
Issues of identification for tangible property
2 of my 10 (no certainty) versus 20% of my 10 (certainty, whole pool included)
Re London Wine Co
Re Goldcorp Exchange
Certainty of subject for intangible trust property
Indistinguishable and fully capable of satisfying the trust, no issue of identification (Hunter v Moss, Pearson v Lehman Brothers)
How to reconcile rules for tangible vs intangible trust property
Segregation always necessary
Segregation unnecessary, based on circumstances
Different rules for different types
No certainty of subject mater problem for intangible assets
Certainty of object
Different rules for different types of trusts
Certainty of object for fixed trusts
Complete list (IRC v Broadway Cottages Trust), unless the trust is subject to a condition precedent (Re Barlow’s Will Trusts)
Certainty of object for discretionary trusts
“Is or is not” test (Re Baden’s No.1), with conceptual and evidential certainty elements
Application varied in Re Baden’s No.2
Stamp - strict
Sachs and Megaw - less strict
Varied approaches in Re Baden’s No.1
Stamp: ‘relatives’ and ‘dependents’ too wide, no degree of evidential uncertainty possible (complete survey)
Sachs: conceptual certainty ok, evidential certainty is a ‘question of fact’ with burden on the claimant
Megaw: conceptual certainty ok, evidential certainty fulfilled once ‘substantial number of objects’ identified
Resolution of uncertainty (Curing uncertainty)
Conceptual uncertainty: question of law (Re Wynn), cannot be cured by the trustee, but later can be delegated (Re Tuck’s), again rejected (Re Wright’s)
Evidential uncertainty: question of fact (Re Coxen) where trustees’ decision can be sufficient
Uncertainty in terms of administrative unworkability
R v District Auditor ex p West Yorkshire Metropolitan CC
Criticism: why large size is relevant factor (see Re Baden’s No.2)
McKay: Re Baden’s = flexibility
Beneficiary principle
The court must be able to enforce a trust, and there must be ascertainable persons in whose favour the court can decree performance
Exception to beneficiary principle
Charitable purpose trusts
Status of non-charitable purpose trusts
Void (Leahy v AG for NSW)
Beneficiary principle vs enforcer principle
Beneficiary with equitable proprietary interests vs party with a right to hold trustees accountable and bring case to court
Arguments for beneficiary principle
No beneficiary principle = trustee duties are an illusion
Easy to shield assets (tax fraud)
Arguments for enforcer principle
Follow off shore jurisdictions, make UK appealing to settlors
Essence of the trust
Beneficiaries’ rights (Matthews) vs holding of property subject to equitable duties (Hayton)
Exceptions to rule for non-charitable purpose trusts
Anomalous testamentary private purpose trusts (e.g for foxhunting)
Absolute gift of property with a motive (Re Sanderson’s, Re Abbott’s, Re Osoba)
Rule in Re Denley’s (class of individuals with strong interest)
Saunders v Vautier rule
A beneficiary of full capacity that has a vested interest in the trust propety can call for a transfer of legal title from the trustees, irrespective of settlor’s intention
Application of Saunders v Vautier
Cannot be used by fluctuating class
Applies to several beneficiaries separately as long as share can be severed (Stephenson v Barclays Bank)
Soundness of the rule (Langbein vs Matthews)
a) protective purpose
b) ease of evasion
c) ‘dead hand’ of the settlor
d) role of trusteeship to mediate between settlor and beneficiary interests
e) donor’s intention > donee
f) contract element of the trust
Difference between varying and ending the trust
Liew and Mitchell: yes there is a difference
- unfair to rewrite the deal between settlor and trustee
- rule only to end the trust, not to vary it
- if there is cooperating T, can collaborate and change
- if no cooperating T, S.19-21 of TOLATA can require trustee to retire
- law is very pro-beneficiary
Nitikman: yes
Waters: no
Perpetuity rules
a) rule against remoteness of vesting (for persons)
b) rule against inalienability (for non-charitable trusts)
Rule against remoteness of vesting
Common law: ‘relevant life + 21 years’, to be determined definitely when the trust is created
Perpetuities and Accumulation Act 2009: perpetuity period no more than 125 years, s.7 wait and see rule
Rule against inalienability
Void trust if possible that by end of perpetuity period there will not be someone with vested interest (Re Hooper)
