The Three Certainties

Question 1

What are the Three Certainties?

Answer 1

Certainty of Intention, Subject Matter and Object

Question 2

Knight v Knight

Answer 2

‘Estates’ were to be held on trust for male descendants. When there were only girls left, the question became: could she claim the estates? The court said no - the words weren’t ‘construed as imperative’ (Lord Langdale MR)

Question 3

Can there be a trust without certainty of intention?

Answer 3

No

Question 4

Can there be inferred intention?

Answer 4

Yes

Question 5

Jones v Lock

Answer 5

Father left cheque with his newborn. This didn’t amount to part of the father’s estate: equity won’t perfect an imperfect gift

Question 6

Richards v Delbridge

Answer 6

One family member endorsed on the lease of his business that it was owned by another family member. this gift failed: equity will not perfect an imperfect gift. Transfer of business? Formalities are required

Question 7

Re Kayford

Answer 7

Money for orders were held in a separate ‘customer trust deposit account’ before orders were sent out. The court held this money was held on trust. ‘It is well settled that a trust can be created without using the word ‘trust’ (Megarry J)

Question 8

Gold v Hill

Answer 8

A man nominated Gold as his beneficiary - ‘Look after Carol and the kids. Don’t let that b**ch get anything. Gold held the money on trust

Question 9

Don King Productions v Warren

Answer 9

Boxing promoters had a fall out. Did the profit from the fights belong to the partnership? The court held that the profit was held on trust for the partnership - the parties had to split the profit

Question 10

Paul v Constance

Answer 10

Unmarried couple. ‘The money is as much yours as mine’. Was C entitled to the money pmce P died? The court said yes. ‘We are dealing with simply people, unaware of the subtleties of equity, but understanding very well indeed their own domestic situation’ (Scarman LJ)

Question 11

Precatory words

Answer 11

These impose no trust
‘I wish that’
‘In the hope that’
‘I have full confidence that’

Question 12

Re Adams and the Kensington Vestry

Answer 12

Husband gave estate to wife: ‘in full confidence that she will’ dispose of it appropriately. This imposed no trust on the wife

Question 13

Mussoorie Bank v Raynor

Answer 13

Husband left property to wife ‘feeling confident’ that she would act justly towards their children. No trust.

Question 14

Lambe v Eames

Answer 14

‘To be at her disposal in a will in any way she think best’. No trust.

Question 15

Trust with insufficiently certain subject matter?

Answer 15

No.

Question 16

Conceptual Uncertainty

Answer 16

Inability to give the right things (to the right people)

Question 17

Palmer v Simmonds

Answer 17

‘The bulk’ of residue. Uncertain subject matter.

Question 18

Re Golay’s Will Trust

Answer 18

‘Reasonable income’ to be given to the beneficiary. This was certain subject matter. Objective not subjective standard of reasonable income.

Question 19

Re London Wine

Answer 19

Wines needed to be segregated

Question 20

Hunter v Moss

Answer 20

Shares didn’t need to be segregated

Question 21

Re Goldcorp

Answer 21

Subject matter needed to be segregated

Question 22

Boyce v Boyce

Answer 22

Maria died before Charlotte without having chosen a house. The whole gift failed because the court couldn’t be certain they were dealing with the right property

Question 23

Anthony v Dongers

Answer 23

Husband and wife getting divorced. Husband gets cancer. Leaves for the wife whatever she is entitled to under English law for maintenance. this didn’t exist. No certainty of subject matter.

Question 24

Shams

Answer 24

The courts won’t allow trusts to be used in a fraudulent way

Question 25

Midland Bank v Wyatt

Answer 25

Husband transferred his interest in his house on trust to his wife and daughter. They didn’t know. This was to prevent his house from being acquired when his business failed. ‘I do not believe that Mr. W had any intention… of endowing his children with his interest’ in the house (David Young QC)

Question 26

Independent beneficial entitlement

Answer 26

£100 to x, y and z

Question 27

Referential beneficial entitlement

Answer 27

£100 to be divided between x, y and z

Question 28

List certainty

Answer 28

List of all beneficiaries

Question 29

Discretionary trust

Answer 29

Trustee has discretion to distribute

Question 30

Power

Answer 30

Trustee can do what they want

Question 31

McPhail v Doulton

Answer 31

Trust set up in favour of employees (and their relatives) of settlor’s company

Question 32

Re Baden’s Deed Trusts (No 2)

Answer 32

Follows from McPhail. Held that this was a valid trust. The court can always interpret relative as being next of kin

Question 33

Administrative Unworkability

Answer 33

A trust will fail if it is unclear who falls within the class of beneficiaries

Question 34

R v DA, ex p West Yorkshire Met. CC

Answer 34

A trust for the inhabitants of WY. A trust for so many ‘potential beneficiaries is… simply unworkable. the class is far too large’ (Lloyd LJ)

Question 35

Gift

Answer 35

Outright transfer

Question 36

Shah v Shah

Answer 36

Son said he was ‘holding’ shares for his mother. This was an intention to create a trust, not to transfer a gift

Question 37

MacJordan Construction v Brookmount Erostin

Answer 37

Money wasn’t separated out. Insufficient subject matter and therefore couldn’t be held on trust

Question 38

IRC v Broadway Cottages

Answer 38

Complete list test: determining whether settlor’s description of beneficiaries is sufficiently certain

Question 39

Re Barlow’s Will Trusts

Answer 39

‘Friends’ were given the option to purchase testatix’s paintings. This was a valid gift, despite the fact that definition of ‘friend’ might vary.

Question 40

Re Tuck’s Settlement Trust

Answer 40

The Chief Rabbi could resolve conceptual uncertainty (i.e. who was Jewish by blood)