The Express Trust and the 3 Certainties continued

Question 1

What are fiduciary powers?

Answer 1

• Power held by a trustee + other fiduciaries with no obligation to exercise them.
• However, there is a fiduciary duty to at least consider the exercise of the power.

Question 2

What is the essential test of certainty for fiduciary powers?

Answer 2

Re Gulbenkian’s Settlement 1970 -> ‘any given postulant’ test
- HOL rejected COA approach that it was sufficient if just one person was a member of the class.
o Must be determined of anyone whether they are a member of the class -> if not, trust void

Question 3

Conceptual certainty in fiduciary powers

Answer 3

• Re Gulbenkian’s Settlement -> Object included someone that a person had been residing with.
  o Held not to be conceptually uncertain.
• Re Baden (No2) -> stricter approach came later (although was for a discretionary trust).
  o Particular concepts need a clear definition to be valid.

Question 4

Evidential certainty in fiduciary powers

Answer 4

Same test for discretionary trust applies here -> Re Baden (No2)
- A fiduciary power will not fail for evidentially uncertainty.

Question 5

Ascertainability in fiduciary powers

Answer 5

same as discretionary trusts -> if a person cannot be found, it will not void the trust.

Question 6

Size of the class in fiduciary powers

Answer 6

• Blauston v IRC 1972 Buckley LJ obiter power might be invalid for administrative unworkability.
• Re Manisty’s Settlement 1974 -> Fiduciary powers have been recognised as valid where a trustee can exercise in favour of the whole world.
• Re Hay’s Settlement Trust 1982 -> Cannot be struck down for administrative unworkability from breadth of class -> as the power does not have to be exercised -> distinguishable from discretionary trusts.

Question 7

Capriciousness in fiduciary powers

Answer 7

The settlor must have had sensible intentions when make the trust otherwise the power can be invalidated.

• Must be a discernible link between settlor and the objects -> Re Manisty’s Settlement 1974
• But will never be capricious based on the size of the class -> Re Hay’s Settlement Trust 1982

Question 8

Which is the leading case for the beneficiary principle?

Answer 8

Morice v Bishop of Durham 1804

Question 9

What must be satisfied after the three certainties are established?

Answer 9

the beneficiary principle

Question 10

what is the link between the certainty of objects and the beneficiary principle?

Answer 10

there must be beneficiaries capable of being identified

Question 11

In which period the principle must be satisfied?

Answer 11

During perpetuity period.

-does not need to be satisfied when the trust is created -> a trust for future grandchildren etc.

Question 12

Express trusts must be trusts for…

Answer 12

persons – with trusts for purposes not being recognised

Question 13

What are the exceptions on express trusts must be trusts for persons?

Answer 13

o Charitable trusts.
 Duty to enforce lies with AG and Charities Commission

o Trusts that seem like purpose trust but where persons will benefit indirectly
 Re Denley’s Trust Deed.

o Non-charitable purpose trusts -> very strict rules and limitations.
 Purpose must be described with sufficient certainty.
 Re Astor’s Settlement Trust

Question 14

What is the perpetuity rule?

Answer 14

Rule against remoteness of vesting -> Property must be vested in an individual within the perpetuity period -> if it is not, the interest in that property may be void.

• Condition precedents must also be satisfied within the perpetuity period.
• Condition subsequent must also occur within the perpetuity period for it to be effective.

Question 15

What is the perpetuity period?

Answer 15

Perpetuities and Accumulations Act 2009 S5(1) -> property must vest within 125 years from when the trust instrument or will takes effect.