Three Certainties - cases Flashcards
CI Re Schebsman [1944] (CA)
- debtor’s company ag (contract) to pay debtor for his svc, or his widow if he died - debtor went bankrupt and died, creditor sought to claim payments for debtor’s estate, widow ag that held on trust for her
- CA held that contract didn’t create a trust in favour of widow (but estate in breach of contract if kept all the payments)
· Lord Greene MR : not legitimate to import a trust into a contract where parties gave no evidence of such intention
· Du Parcq LJ : a person using ‘unguarded language’ may say smth which could be a DOT, but won’t be considered so unless an intention to create a trust can be “clearly collected from the language used and the circumstances of the case”
CI - Richards v Delbridge (1874) (CA)
- Grandfather (G) purported to give his business (mill) to grandson (C) by adding a note/deed to the lease - G died and will gave his estate to be divided among his family, didn’t refer to the mill so G’s children claimed it
- CA held that no trust bcs no clear DOT (≠ declaration of gift)
=> no need to use the exact words “I declare myself a trustee” BUT “he must do something that is equivalent to it, and use expressions which have that meaning” (Sir Jessell MR)
CI T Choithram International v Pagarani (2001) (CA)
- S, seriously ill, created foundation to which he gave his estate (the benefit of) - appointed himself and others as trustees, died intestate soon after, without having fully complied w/ formalities to transfer title to various components of his estate to all the trustees
- CA held that there was a valid trust
=> because S had gone far enough so as to be unable to revoke DOT (≠ Jones v Lock) + one of the trustees had the trust property (him) even if not yet successfully vested in the others
CI Re Adams and the Kensington Vestry (1884) (CA)
- Testator (T) gave his wife (W) absolute use of his estate “in full confidence that she would do what is right as to the disposal thereof between his children”
- CA held that W not a trustee for children bcs T didn’t intend to place legally binding duty on her, only moral obligations -> transfer of property intended as a gift and will as guidance
CI - Milroy v Lord (1862) (CA)
S purported to transfer shares to L, to hold on trust for M, but didn’t comply w/ formality requirement to transfer title. For the 3y, dividends received on shares were remitted to M (sometimes through L and sometimes through S)
=> CA held that not valid trust created, neither in S nor in L :
- bcs S didn’t intend to be a T, intended to transfer shares to M,
- and bcs no valid transfer to M
CI - Jones v Lock (1865) (CA)
- Father (F) ‘gave’ cheque to baby son (B) by his second wife (put it in his hand + expressed intention to give him money) then put it away - had also told his solicitor he intended to invest on behalf of child + modify his will but died before appointment
- CA held that no valid gift or declaration of trust : no gift bcs F “would have been very much surprised if he had been told that he had parted with the £900 and could no longer dispose of it” and no DOT bcs dangerous to consider loose conversation in family setting a DOT
CI - Paul v Constance [1977] (CA)
X married and separated from D, X lived w/ P and opened a shared bank acc in X’s name but to which P had access - X frequently repeated ‘that money is as much yours as it is mine’ - X died intestate and P claimed money in the account
=> CA held that there was a trust : X’s words and action showed intention that money be held for benefit of P (and himself) = intended a trust, repeated words = a DOT
CI JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev (2017) (HC)
D purported to settle his assets in 5 DTs of which he was a discretionary B and ‘protector’ (gave him powers to refuse exercise of Ts’ powers + remove Ts) ; C’s creditor obtained substantial judgement against D and sought to enforce it ag trust assets, D claimed not to have BO of trust assets
=> HC held that the trusts were shams, D retained BI in trust assets - test for sham trusts = whether the parties subjectively intended to create rights & obligº ≠ from those which appeared to be created (and give false impression to 3P) - has to be a common intention btw S and T (can include ‘reckless indifference’)
CSM - Re Ellenborough (1903) (HC)
- C tried to use deed to gift D property she expected to inherit from her brother and sister
- HC held that deed not enforceable bcs a voluntary assignment of an expectancy is not enforceable if it has not been made for value
CSM - Re Golay’s Will Trusts (1965) (HC)
Summary: S’s will made provision for D to receive “a reasonable income” from some of his properties during her lifetime, C = S’s widow tried to claim that direction void for uncertainty
=> HC held that direction was not void for uncertainty bcs “the court would have no difficulty in quantifying ‘reasonable income’”
CSM - Re London Wine Co
Wine merchant sold + stored wine for customers - gave them certificates saying they owned X bottles of wine but didn’t store the bottles separately, then went insolvent - customers (unsecured creditors) tried to claim wine they had paid for was held on trust for them
=> HC held that no trust created bcs didn’t know which title was held on trust for who / impossible to ascertain to which property the beneficial interest of each attached
=> Matters even for fungibles / property which is “part of a homogenous mass” in case some gets damaged
CSM Re Goldcorp Exchange Ltd (1995) (PC)
Company (D) sold bullion to claimants for future delivery, said it would maintain sufficient separate stock but didn’t, and went insolvent -
=> Cs sought to claim that had proprietary interest bcs sale / bullion held on trust to keep if from other creditors
=> PC held that since Cs had contracted to buy ‘unascertained generic goods’, no property passed until known to what goods title relates + collateral promise by D not a DOT (and no CSM bcs not segregated)
CSM - Hunter v Moss (1994) (CA)
- D owned 950 (out of 1000) shares in a company, declared that he held 5% (of the 1000) on trust for C = 50 of his 950 shares, then ag that trust void for uncertainty of subject matter
- CA held that trust was not void for uncertainty of SM bcs shares held by D were indistinguishable, any 50 of them would satisfy the trust, and also transfer would be fine as will so no reason not to allow it inter vivos
- distinguished London Wine bcs concerned w/ chattels, vs here chose in action (tangible vs intangible distinction)
CSM Re Harvard Securities (1997) (HC)
company purchased shares on behalf of clients but didn’t allocate each share specifically to a client, then went insolvent
=> HC held that shares held on trust for clients despite not being allocated = affirmed Hunter v Moss distinction btw tangibles and intangibles
/!\ only bcs bound by precedent, Neuberger J rather critical of distinction
CO - IRC v Broadway Cottages (1955) (CA)
S declared trust, T supposed to apply income of trust fund to persons employed by himself or his family during a certain period of time
=> CA held that trust void for uncertainty of object + formulated ‘complete list’ test : whole range of objects eligible for selection must be capable of being ascertained (so that trust is capable of being executed by the court)
/!\ no longer applies to DTs (McPhail v Doulton)
