Beneficiary Principle

Beneficiary Principle

1. Once the 3 certainties have been satisfied then you need to determine if the beneficiary principle is satisfied.

2. Beneficiary Principle: BP requires property to be held on trust for identified beneficiaries or objects.

   • Overlaps with certainty of objects - if there are certain objects then there must be identifiable beneficiaries
     • Morice v Bishop of Durham
       • a trust for ‘such objects of benevolence and liberality’ was void as there were no identifiable beneficiaries
   • has a distinct function - no beneficiaries and no one to enforce the trust - INVALID
     • an express trust for persons must have an identifiable people in whose favour the court can decree performance.

3. Types of certainty

   • Re Badens Trust (No 2) the COA drew a distinction between conceptual and evidential certainty
     • Conceptual Certainty
       • refers to semantic clarity of description of beneficiaries
         • if theres any ambiguity in the words used to define a class of objects
           • court won't be able to determine without doubt if a person is within the class or not
       • In Re Badens - Sachs LJ gave examples of conceptually certain
         • first cousins
         • members of X union
       • Browne Wilkinson J expressed problem about friends in Re Barlows WT
         • 'Friends' - range of meanings - varies from person to person
           • can be acquaintances or someone they known for a long time
       • no equitable mechanism is valid if the class of objects is uncertain
     • Evidential Certainty
       • Concerned with proving if a person falls in specified class of objects
         • eg: relatives
           • unless some scientific process - genetic fingerprinting is used - difficult to prove
       • Fixed trusts - every beneficiary needs to be identified
         • invalid if evidential certainty is lacking
       • Powers and discretion don't require this

4. Beneficial entitlement/ownership

   • need to determine potential allocation of trust property
   • depends on exact number of equitable mechanism and ranges from substantial property interest to no property

5. PURPOSE TRUSTS

   • Trusts MUST be for the benefit of legal persons and not for the object of carrying out purposes
     • EXCEPTIONS
       • CHARITY
     • Bowman v Secular Society
       • Lord Parker
         • For a trust to be valid it must be for the benefit of individuals
   • Rule against purpose trusts is long est.
     • Morice v Bishop of Durham
       • Sir William Grant
         • Every trust must have a definite post. There must be somebody in whose favour the court can decree specific performance