Certainty of Objects

Certainty of Objects

1. beneficiary is not identified and person receives property knowing that they're intended to be the trustee

   • person is then said to be holding P on trust for the S (resulting trust)

2. Bare Trust

   • this is a trust in which the T holds on trust for one B absolutely
   • identity of B MUST be discernible

3. Fixed Trust

   • fixed group of B
   • Must comply with 'list certainty' rule- IRC v Broadway Cottages
   • if an identified B cannot be found, then his share can be distributed among other Bs- Re Benjamin
     • court ask for Bs to be willing to refund property if the need arises

4. Discretionary Trust

   • A trust in which T is obliged to make a distribution of P to any persons from a specified general class of B
     • imposes a duty on T to distribute, although T still retains discretion as to who shall benefit
     • example of problem: 'good friends'
       • test set out in McPhail v Doulton: any given postulant test
         • Requires that it be possible to say of any given C from the trust that the person 'is or is not' within the class of b. Any given postulant test
           • Re Gulbenkian's Settlement Trust
           • Re Baden No.2
         • in result that any on person cannot be categorised as falling either within or without the class, the trust will fail
           • IRC v Broadway Cottages (list certainty)
     • Re Gestner Settlement

5. Mere Fiduciary Power

   • power given to T which enables them to act if they choose to do so, but which does not oblige them to act at all.
   • Re Hay's Settlement Trusts: T must be able to justify any decisions they make and cannot act capriciously in the decision they make

6. Personal Power

   • power given to a person who is not a T to decide in their absolute discretion how to deal with trust property
   • important that power is given to its holder in a private capacity as this power cannot be void for uncertainty
   • Holder of this power is able to act capriciously and entirely without any of the responsibilities usually associated with trusteeship
     • because holder of power is not a fiduciary

7. Administrative unworkability

   • arises in cases where the words of T are unclear
     • 'definition of B is so hopelessly wide as to not form anything like a class' McPhail v Doulton
     • in this case, T said to be administratively unworkable because it is impossible for T to exercise their discretion in any proper way
   • applies only to fixed trusts and discretionary trust powers, not mere powers

8. Capriciousness

   • May be held to invalidate mere powers and discretionary trust powers
   • where terms of a power negate any sensible intention on the part of a settlor: e.g. all residents of Greater London. R v District Auditors ex parte...

9. Trust document solutions

   • 1) provide for an expert to resolve matters of uncertainty
   • 2) Give T power to resolve uncertainty on their own (Re Leek)
   • 3) Ensure T deed contains a Cotman v Brougham Clause so that failure for one part of the trust due to uncertainty does not invalidate whole trust
   • 4) Ensure that deed provides an express 'git over' in event that part of the trust fails for uncertainty