The Three Certainties Flashcards
What are the Three Certainties?
Certainty of Intention, Subject Matter and Object
Knight v Knight
‘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)
Can there be a trust without certainty of intention?
No
Can there be inferred intention?
Yes
Jones v Lock
Father left cheque with his newborn. This didn’t amount to part of the father’s estate: equity won’t perfect an imperfect gift
Richards v Delbridge
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
Re Kayford
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)
Gold v Hill
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
Don King Productions v Warren
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
Paul v Constance
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)
Precatory words
These impose no trust
‘I wish that’
‘In the hope that’
‘I have full confidence that’
Re Adams and the Kensington Vestry
Husband gave estate to wife: ‘in full confidence that she will’ dispose of it appropriately. This imposed no trust on the wife
Mussoorie Bank v Raynor
Husband left property to wife ‘feeling confident’ that she would act justly towards their children. No trust.
Lambe v Eames
‘To be at her disposal in a will in any way she think best’. No trust.
Trust with insufficiently certain subject matter?
No.
Conceptual Uncertainty
Inability to give the right things (to the right people)
Palmer v Simmonds
‘The bulk’ of residue. Uncertain subject matter.
Re Golay’s Will Trust
‘Reasonable income’ to be given to the beneficiary. This was certain subject matter. Objective not subjective standard of reasonable income.
Re London Wine
Wines needed to be segregated
Hunter v Moss
Shares didn’t need to be segregated
Re Goldcorp
Subject matter needed to be segregated
Boyce v Boyce
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
Anthony v Dongers
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.
Shams
The courts won’t allow trusts to be used in a fraudulent way
Midland Bank v Wyatt
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)
Independent beneficial entitlement
£100 to x, y and z
Referential beneficial entitlement
£100 to be divided between x, y and z
List certainty
List of all beneficiaries
Discretionary trust
Trustee has discretion to distribute
Power
Trustee can do what they want
McPhail v Doulton
Trust set up in favour of employees (and their relatives) of settlor’s company
Re Baden’s Deed Trusts (No 2)
Follows from McPhail. Held that this was a valid trust. The court can always interpret relative as being next of kin
Administrative Unworkability
A trust will fail if it is unclear who falls within the class of beneficiaries
R v DA, ex p West Yorkshire Met. CC
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)
Gift
Outright transfer
Shah v Shah
Son said he was ‘holding’ shares for his mother. This was an intention to create a trust, not to transfer a gift
MacJordan Construction v Brookmount Erostin
Money wasn’t separated out. Insufficient subject matter and therefore couldn’t be held on trust
IRC v Broadway Cottages
Complete list test: determining whether settlor’s description of beneficiaries is sufficiently certain
Re Barlow’s Will Trusts
‘Friends’ were given the option to purchase testatix’s paintings. This was a valid gift, despite the fact that definition of ‘friend’ might vary.
Re Tuck’s Settlement Trust
The Chief Rabbi could resolve conceptual uncertainty (i.e. who was Jewish by blood)
