The Three Certainties - Express Private Trusts

Question 1

Knight v Knight 1840 - Three certainties test

Answer 1

This provides that, in order to be valid, a private express trust must demonstrate the three certainties. Only then will a court recognise the trust as binding in equity.

1. Certainty of intention. Must have the capacity.
2. Subject matter , which specific property/ what is in the trust
3. Object , clarity of who the beneficiaries are

Question 2

Re Adams and the Kensington Vestry (1884) - Three certainties

Answer 2

It must be clear that the person disposing of the property intended to create a trust, rather then making a gift.

There must be certainty of intention. The court considers the whole will to construe the meaning of words. The words used to create a trust must make it plain that the intention was to create a trust. there is. I do not need to use the word ‘trust’.

Question 3

Re Goldcorp Exchange (1995)- Three certainties

Answer 3

Certainty of subject matter .

For chattels , the trust property must be identifiable. If it is part of a larger holding of similar property , it should be segregated from the rest.

The customers did not have a proprietary interest. It is contrary to policy to imply a fiduciary duty simply because there was a breach of contract. There was unidentified tangible property so the trust will fail for uncertainty of subject matter.

Question 4

Hunter v Moss - Three certainties

Answer 4

For intangible property such as shares , the trust property is certain even if identified by words such as 5%.

Certainty of subject matter.
The degree of certainty for subject matter required for trusts of intangible assets is different to that which is required of trusts of tangible assets.

Tangible assets can be physically separated and therefore distinguishable . The COA held that it was a valid trust. Since the shares were essentially identical and indistinguishable , any 50 shares would do

Question 5

Re Harvard Securities(1997) - Three certainties

Answer 5

Certainty of subject matter.

The issue of unsegregated shares became before the court when Neuberger J said that he was bound by Hunter v Moss in relation to the settlors shares which were in England but was not bound in relation to the shares in Australia .

Question 6

IRC v Broadway Cottages (1954)- Three certainties

Answer 6

Certainty of objects

Fixed trusts : where each beneficiary receives a fixed entitlement , the trustee must be able to draw up a complete list of beneficiaries before distributing the trust property.

Question 7

McPhail v Doulton 1970 - Three certainties

Answer 7

Certainty of objects

Discretionary trusts : where the trustee has discretion about how much / when to distribute / to which beneficiaries. It must be ascertainable whether someone ‘is or is not’ within the ‘class of objects’ of the trust

Question 8

R v District Auditor (1986)

Answer 8

Certainty of objects.

A trust with a very large class of objects may be invalidated by administrative unworkability