Express Trust

Express Trust

1. McPhail v Doulton [1971] - 'a trust should be upheld if there is sufficient practical certainty in its definitions for it to be carried out, if necessary with the administrative assistance of the cout, according to the expressed intention of the settlor'

2. The Three Certainties

   • Knight v Knight [1840]
   • Certainty of Intention
     • a) Capacity
       • An intenion will be valid only if the settlor or testator had the capacity to create a trust.
     • b) Certainty of Intent
       • 1) Essential Test
         • Whether there was an intention to create a trust is to consider whether teh creator of the trust wanted somebody to heold propert for the benefit of another person, so that they are under a duty to do so.
       • 2)'Trust
         • Charity Commission for England and ales v Frmanjees [2014] The word 'trust' need not be used to create a trust.
       • 3) Substance of Intention
         • Creator 'wished' to impose an obligation on the other party to hold the property for someone else.
           • Re Hamilton [1895] Precatory Words - "I wish"
       • 4) Objective Assessment
         • Twinsectra Ltd v Yardley [2002] The Court will have regard to the actual intention of the settlor.
         • What the reasonable person would conclude that the creator of the trust intended.
       • 5) Interpretation of Intent
         • Re Gulbenkian [1970]
           • Duty of the court by the exercise of its judicial knowledge and experience in the relevant matter, innate common sense and desire to make sense of its settlor's.. expressed intentions, however obscure or ambiguous the language that ma have been used, to give a reasonable meaning
       • 6) Self-Declaration of Trust
         • Jones v Lock [1865] A person purports to hold their own property for the benefit of another.
       • 7) Commercial Context
         • R v Clowes (No.2) [1994] Obligation to segregate property.
       • 8) Intention to make a Gift
         • Intention to transfer property absolutely without intending to impose obligations on the donor to hold property for somebody.
   • Subject Matter
     • Hunter v Moss (1994)
     • i) Clarifying identity on death
       • Re Clifford (1912) On T's death, title to the shares will pass on to executors, who distribute the estate according to the terms of the will.
     • ii) Types of Shares
     • iii) Chattels in a Bulk
       • Re London Wine (1986) A purchaser of an unascertained part of a bulk of goods acquired property rights in that bulk.
         • Sale of Goods (Amendment) Act 1995
     • iv) Tangible and Intangible Property
       • Hunter v Moss (1994) A trust of part of a mass will not fail for uncertainty where there has not been an appropriation of any specific part of the mass for the beneficiary, as long as the mass itself is sufficiently identified and as long as the B's proportionate share of the mass is not certain.
     • v) Intention to create a trust from a particular fund
       • A trust will not be created from a fund if S did not intend part of that fund to be held on trust.
     • a) Nature
       • Land, money, shares, chattels - Intangible Property
       • b) Description
         • A declaration of trust can be valid only if SM of trust has been described with sufficient clarity.
         • Re Jones ( 1898)
           • Palmer v Simmonds (1854)
   • Certainty of Objects
     • Fixed Trusts
     • Discretionary Trusts
       • 1) Test of Certainty
         • Trustees are given 'trust power' to make an appoint., discretion to who will benefit and in what proportion.
           • Complete List of Beneficiaries
           • McPhail v Doulton (1971) Equity is Equality
         • 2) Conceptual Certainty
           • Re Baden (No. 2) Define the description of the class
           • 3) Evidential Certainty
             • Given Postulant Test
               • Required to show any given person that are/ are not within the class of beneficiaries.
                 • Substantial number of objects in the class.
             • 4) Ascertainability of Objects
               • 5) Size of the Class
                 • 6) Capriciousness
                   • S or Testator has chosen the objects by reference to a description that cannot be described as sensible, this will not invalidate the trust.
                 • Distribution to whole, small class.
               • Property will be distributed among those who can be ascertained and share of anybody who cannot be ascertained will be paid into court.
             • Prove who the objects are by clear evidence.
           • If the definition of the objects is unclear, it will not be possible to compile a complete list test, trust will be void.
         • Trustees are required to distribute the trust property to B's in the proportions identified by the trust document.
           • Complete List Test