The Three Certainties- Subject Matter Flashcards
Certainty of Subject Matter
The property subject to the trust must be identifiable so that: 1. The trustee can fulfil his obligations 2. The court is able to supervise and enforce the trust
Palmer v Simmons (1854)
Certainty in the property itself- Property was not sufficiently certain. ‘The bulk of my said residuary estate’ should be held for certain people.’ She had not expressed a definite, clear and certain part of her estate.
Sprange v Barnard (1789)
Certainty in the property itself- Property was not sufficiently certain. ‘The remaining part of what is left that C does not want for his own wants’.
Boyce v Boyce (1849)
Certainty in the property itself- Property was not sufficiently certain. ‘My house remaining after M had chosen 1’
The testator left his two houses on trust for his daughters, under the condition that his daughter Maria should choose the one she wanted, and the remaining one would then go to his other daughter Charlotte. Maria died before her father, and it was unknown which house she would have chosen.
Trust failed because it was uncertain which house Maria would have chosen, and which would go to Charlotte.
Re Last (1958)
Certainty in the property itself- Property was sufficiently certain. ‘Anything that is left’ of the T’s estate. T had left her estate to her brother absolutely, but then added that anything left was to be left for specific other people. Interpreted as giving brother a life interest in the estate and its residue passing to the others on his death.
Re Golay’s Will Trusts (1965)
Certainty in the property itself- Property was sufficiently certain. Courts may be willing to give meaning to an imprecise definition of subject matter. ‘Reasonable income’ was sufficiently certain because it was possible to determine what could objectively be considered ‘reasonable’ (by reference to the the beneficiaries previous standard of living).
Hunter v Moss (1994)
Is subject matter identifiable?
Case: D owned 950 shares in a co and declared 5% of them (50) on trust for C (not clear which 50).
A trust which is part of a bulk will not fail for uncertainty where a specific part of the bulk has not been appropriated to the beneficiary AS LONG AS:
- THE BULK IS SUFFICIENTLY IDENTIFIED; AND
- THE BENEFICIARY’S PROPORTION OF THE SHARE OF THE BULK IS CERTAIN; AND
- ALL SHARES ARE OF THE SAME CLASS
Why?
- No issue of clarifying identity on death- on T’s death title in his property passes to his executors who would resolve uncertainty as to which subject matter (which shares) by choosing 50 shares and transferring them to the designated trustee to hold.
- Types of share- All shares in this case were of a single class. OBITER: - If dec of trust over 50 shares and T owns shares in two different companies the trust would fail for uncertainty of SM because it would be unclear in which co S intended the shares to be held on trust from. - If the testator owns different classes of shares trust would fail for uncertainty of SM because it would be unclear which class are part of the trust.
- Distinguished London Wine Co - LW concerned appropriation of chattels and passage of legal title. - Hunter concerns shares and the declaration of a trust in respect of which there was no suggestion that legal title had passed as in the bulk.
Re London Wine Co (1986)
Pre-Hunter, but applies if case fits facts. Uncertainty of identify of wine voided the trust. Co had a stock of wine deposited in various warehouses. It had sold quantities of wine to customers but retained the bottles in its warehouse, without allocating specific bottles to specific contracts. Went into receivership. The wine was not held on trust for the customers because it had not been separated from the bulk meaning no certainty of SM. The wine formed part of the co’s estate.
Re Goldcorp Exchange (1995) PC
Uncertainty of identity of bullion. Customers paid co for gold bullion but the co continued to store it, purportedly on trust for the customers. Claims by customers whose bullion had been separated succeeded, but those who hadn’t (most) failed.
Re Harvard Securities (1997)
Certainty in identification of subject matter is dependent on the nature of the property. Neuberger- ‘There is a crucial distinction between trusts of tangible property and intangible trusts such as shares. A more benevolent approach to identification is taken with intangibles.’ (i.e an easier, more well-meaning approach- will be more likely to find)
Is the tangible and intangible distinction defensible?
Difference: if A purports to hold 10 of his 20 bottles of wine on trust for B no valid trust because of failure of identify of SM. BUT if A purports to hold 50 shares from his 100 on trust for B this will not fail for uncertainty. It is identifiable as half of his shareholding. May be defensible- though the tangible wines look the same some may be corked, some may not, some may be damaged etc. All shares (so long as same class) as the same.
The property subject to the trust must be identifiable so that: 1. The trustee can fulfil his obligations 2. The court is able to supervise and enforce the trust
Certainty of Subject Matter
Certainty in the property itself- Property was not sufficiently certain. ‘The bulk of my said residuary estate’ should be held for certain people.’ She had not expressed a definite, clear and certain part of her estate.
Palmer v Simmons (1854)
Certainty in the property itself- Property was not sufficiently certain. ‘The remaining part of what is left that he des not want for his own wants’.
Sprange v Barnard (1789)
Certainty in the property itself- Property was not sufficiently certain. ‘All my other houses’ remaining after M had chosen 1, where M predeceased the T without making a choice.’
The testator left his two houses on trust for his daughters, under the condition that his daughter Maria should choose the one she wanted, and the remaining one would then go to his other daughter Charlotte. Maria died before her father, and it was unknown which house she would have chosen.
Trust failed because it was uncertain which house Maria would have chosen, and which would go to Charlotte.
Boyce v Boyce (1849)
