Three Certainties - Rev notes Flashcards
the three certainties
- certainty of intention
- certainty of subject matter
- certainty of object
The three certainties - origin case
= Lord Langdale in Knight v Knight (1840)
Certainty of intention
needs to be evidence that S intends to create a trust
=> as in create a ‘trust-like’ sitº where T doesn’t hold the right for himself by for the benefit of another
CI - elements (4)
- using word ‘trust’ not necessary: Richards v Delbridge, Paul v Constance
- intention to create a trust like situation : Paul v Constance
- intention to create a legally binding duty : Re Adams and Kensington Vestry
- intention to make a gift (which turns out to be imperfect) not enough : Milroy v Lord
Certainty of subject matter
= must be possible to ascertain which are the rights T is supposed to be holding on trust
=> “the creation of a valid trust requires the existence at that time of some assets to which the trust would apply” - David Richards LJ in North v Wilkinson at [14]
CSM - the rules (3)
- In principle, any right can be held on trust: land, chattels, choses in action…
- Even unassignable rights = Swift v Dairywise Farms Ltd (unassignable milk quotas) or Don King Productions Inc. v Warren (contractual rights subject to a non-assignment clause)
- BUT can’t declare a trust of rights to be acquired in the future = Re Ellenborough
CSM - problematic cases (3)
- vague or uncertain description
- failure to segregate
- testamentary disposition
CSM - vague or uncertain description
- Palmer v Simmonds: testatrix’s direction to hold ‘the bulk of my residuary estate” too uncertain bcs impossible to ascertain whether a given right is pt of the bulk or not (no clearly right or wrong answer)
- Contrast with North v Wilkinson: ‘the assets of a particular business’ is ok bcs there is a right answer, even if diff to find)
CSM - failure to segregate - tangibles - rule & reason
Rule: purported DOT over title to part of a collection of similar / identical (unsegregated) tangible things will fail for USM
Reason = if pt of tangible mass gets damaged, imp to know whose got damage
= Re London Wine Co and Re Goldcorp
CSM - failure to segregate - tangibles - Re London Wine Co
identical wine bottles sold to and stored for clients but not segregated / specifically assigned not held on trust bcs uncertainty subj matter (would’ve been sufficient stock)
CSM - failure to segregate - tangibles - Re Goldcorp
portions of bullion sold to customers but not specifically ID or segregated :
- title doesn’t pass on sale, only once identified
- no trust either bcs uncertainty of subject matter (wouldn’t have been sufficient stock)
CSM - failure to segregate - intangibles
Hunter v Moss : fact that 50 (out of 950) indistinguishable shares assigned to B enough for certainty of SM (any 50 would do), no need for them to be segregated
CSM - Failure to segregate - testamentary dispositions
Not so much of a pb bcs executor under fiduciary duty to segregate / ID subject matter
Certainty of object
= for whom does T hold the rights on trust ?
CO - fixed trusts
‘fixed list’ / ‘complete list’ test = IRC v Broadway Cottages