three certainties Flashcards
In order to create a vaild trust what are the 3 certainties
CA - Knight v Knight
1) certainity of intention
2) certainity of subject matter
3) certainty of objects
how to prove certainity of intention (words)
words that are mandtory and obligatory e.g. I direct that.. or i require that
it shouldnt be pecatory words like hope and desire
true or false - trusts can be contructed from actions
answer: true
CA - paul v constance - declaring from time to time that money in an account - is sufficient
sham declaration are not considered - CA midland banks PLC V wyatt
what if there is no cetainity of intention
there will be no trust
What is certainty of subject matter?
1) the trust property needs to be identifiable to the trustee
2) also the interest gained by the beneficiary
The trust is likely to fail if the property left on trust is unidentifiable or uncertain.
how do we know if something is certain
CA - palmer v Simmonds (1854) “the bulk of my residuary property” - this failed becuase what are not sure what bulk means
HOWEVER COMPARISION
re golay will trusts - the court dertermined that a trust to pay “reasonable income” would not fail as a reasonable income was something which the courts could quanify - objective standard
what if there is certainity of the subject matter of the trust but not the benefical share
unless trustee have discretion to determine the amounts - the trust will fail and the property will be held on a resulting trust
CA - Boyce v Boyce
unascertained property
1) buying goods from a seller who later goes bankrupt can lead to problems
2) some buyers attempt to priotize their ownership claims over the goods they paid for but didnt reciceve espeically when the items were part of a larger batch
3) however if the purchased goods were not kept seperate from in the seller’s possession = claim failed
4) cannot be trust of unidentifable chattles
what are the cases for unascertained properties
CA - re london (1986) - trust property must be separate
Re goldcorp - need segreation of the products
what is the act that have now allowed you to have unascertained goods
sales of good amendent act 1995 - if you have paid for unascertained goods you are deemed to have property rights in them regardless of segregation
what is the exceptions for chattles
doesnt apply to money, shares and other choses in action
no different between the units e.g one pound is the same as another
so
ca - hunter v moss [1994] - trust was delcared for shares upheld by the CoA
ca - macjordon construction ltd v brookmount erostin - tried to create a trust for money = failed - not idetifiable
what happens if there is no certainity of subject matter?
1) gift to donee absolutely CA - rule in hancock v watson
2) resulting trust for settlor - goes back to them
what is certianity of objects
identifying the beneficaries
what are the types of dispositions
fixed trust
discretionary trust
power
gift subject to condition precedent
discrentionary trust
the trustee has discretion as to how to distribute the property between the beneficiaries
an example is distribute amosgst my nieces as my trustees think fit
powers
a power is a legal right to deal with, manage or dispose of property
powers are discretionary, a person does not have to excerise them
in this context it is the poweer to distribute property on behalf of another
how to distinguish trusts and powers
trusts are equitable
powers are legal
trusts are mandatory
powers are discretionary
powers are generally a gift over in default of appointment - where undistriubuted property goes
what is a fixed trust
the trust instrument states the share or interest of the beneficaries
an example is an trust for my nieces in equal shares
what is the test for fixed trusts
complete list tests
CA - Morice v Bishop of Durham - the objects test for fixed trusts is the complete list tests
the trustees have to be able to make a complete list of the beneficaries
but what if the records buildings burns down??
gift subject to condition precedent
a gift ( not a trust) to those who meet a condtion e.g. re barlows - when the paintings were sold, the first opportunies to buy them and at a discount would go to the testator’s friends
what is the test for powers
is or is not test
CA - Re Gulbenkian - the objects test for powers is the is or not test
must be able to say with certainitry whether someone is or is not an object
what is the test for discrentionary trust
is or is not test
CA - McPhail v Doulton - a discrentionary trust is vaild “if it can be said with certainty that any given indvidual is or not a memeber of the class”
