THREE CERTAINTIES Flashcards
Use of the word ‘trust’
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Normally, using the word ‘trust’ will indicate an intention to create a trust
- We have to bear in mind the context
- An exception is when the word trust is not being used in the specific legal context; usually the word will indicate a trust, but it is not an absolute rule [Tito v Waddell]
Precatory words
- Precatory words (praying) alone do not establish certainty of intention
- By themselves, precatory words (words expressing hope, confidence, wish, belief and expectation) do not by themselves suffice to establish an intention to create a trust
- Without context or other wording, they will not indicate a certainty of intention
- They will impose only a moral obligation
Lambe v Evans
- Estate left to widow “to be at her disposal in any way she may think best, for the benefit of herself and her family”
- Ask, did the settlor intend a trust to be created
- “I am satisfied that no such trust was intended, and that it would be a violation of the clearest and plainest wishes of the testator if we decide otherwise”
Re Adams & Kensington Vestry
- Precatory words do not by themselves suffice to establish a trust
- Even strong language is not enough, it is not the same as imposing a legal obligation
Comiskey v Bowring-Hanbury
- We need to look at the other provisions of the will to find out if a trust is being intended
Re Snowden
- A lady leaves her property to her property to split up the remainder as he thought best
- Vague language is not sufficient to establish a trust in and of itself
Re Steele
- We can look at conduct to support the use of precatory words
- Do not overuse this case
- In this case, it was held that the fact the settlor looked for a case which demonstrated that precatory words will suffice to create a trust showed the intention to do so
- Conduct + use of precatory words can create the serious intention a trust
Paul v Constance
- You do not need to understand the legal subtleties of making a trust, but you must understand your domestic situation and financial relationship.
- “It is, of course, right that one should consider various things that were said and done by the plaintiff and the deceased during their time together against their own background and in their own circumstances”
Don King Productions v Frank Warren
- In the agreement the language of trust was not used, but the fact that the parties were sharing the profits meant that the parties were in a trust (this was the only way of making sense of the relationship).
- The test is what the parties intended and how this would be achieved legally
Mills v SportsDirect.Com
Look at the meaning of the words in their relevant context
Wilkinson v North
Even though legal jargon is being used, that does not mean a trust has been created
Sham intentions
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Midland Bank v Wyatt: although Wyatt had declared a trust and complied with the necessary formalities, his conduct showed that he did not actually intend the trust
- You cannot use a trust as a get out of jail free card
- Ask, did the settlor have a serious intention to create the legal relationship known as a trust?
Gift or trust
- Whether it is a gift or trust goes to the existence of intention
- If you did not intend a trust, you must intend a gift
- In order for it to be a trust
- There must be certainty of subject matter
- There must be certainty of objects
What do we need to have certainty of subject matter?
We need to be able to say with sufficient certainty what property is subject to the trust
Lehman Brothers v CRC Credit Fund: “a trust cannot be created without property to which it can attach. Where there is no property which is sufficiently identified the subject matter of a trust, no trust is created”
Without certainty of subject matter, there cannot be a trust
Boyce v Boyce
The testator owned some houses, which he left to his wife to give to his first daughter and the other houses to their other daughter. Could the second daughter say which houses she was entitled to?
The second persons entitlement is contingent on the first one