The Three Certanties

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Created by cadhla_corrigan about 7 years ago


LLB Trusts and Equity (2. The Three Certainties) Flashcards on The Three Certanties, created by cadhla_corrigan on 09/04/2014.

Resource summary

Question Answer
Knight v Knight- The Three Certainties Certainty of intention, certainty of subject matter (property) and certainty of objects (beneficiaries) must all exist for a trust to succeed.
Re Krayford- Certainty of Intention A trust can be created without using the words "trust" or "confidence". There must be sufficient intention in substance.
Re Adams and the Kensington Vestry- Certainty of Intention "Full confidence that my wife will do that is right". Precatory words are not enough to make a trust, the whole will must be considered to find the the testator's intention.
Lambe v Eames- Certainty of Intention Husband left property for benefit of family. Wife gave money to non-relatives. Precatory words were less likely to form a trust as "imposing trusts where...never meant to create trusts is a very cruel kindness." Held, no trust.
Re Steele's Will Trusts- Certainty of Intention The wording of gift was the same in a previous case therefore a trust was established despite the use of precatory words as the draughtsman had deliberately followed old and good precedent.
Jones v Lock- Certainty of Intention Father wrote cheque for baby son. There was no intention to create a trust, only one of an outright transfer or a gift. If a gift is not completed with required formalities it will fail. "Equity will not perfect an imperfect gift."
Shah v Shah- Certainty of Intention Attempted to give shares as a gift: "I am holding shares immediately for you". This wording amounted to a trust.
Re Snowden- Certainty of Intention Testator left property to brother claiming he would "know what to do". The burden of proof [of a secret trust] rests upon the person claiming it exists by the ordinary civil standard of proof on the balance of probabilities.
Gold v Hill- Certainty of Intention Under prison rules the governor must hold onto prisoner's cash. Prisoner asked for interest on top of original sum. There was no intention to create a trust therefore the governor had no duty to invest in the money nor owe interest.
Paul v Constance- Certainty of Intention Constance had assured Paul, his new partner, that the money held in a bank account under his name was "as much yours as mine" multiple times over a long period of time. The intention to create a trust could be inferred from his conduct.
Midland Bank v Wyatt- Certainty of Intention Wyatt borrowed security on their house from the bank but did not inform the bank of a trust which had been created on their home. Only when the bank started proceedings to recover the trust was produced. It had been signed and ignored until convenient and so was held to be a sham.
Don King Productions- Certainty of Intention A purported assignment for sponsorship and commercial agreements can take effect as a declaration of trust- within business situations the intention of the parties does not have to be entirely clear for a trust to be created.
Boyce v Boyce- Certainty of Subject Matter Testomatory gift for two daughters: eldest daughter could choose between 2 houses leaving the other for the youngest but died before choosing. The daughter was not entitled to choose one for herself. The identity forming the subject matter of the trust must be certain where amount of property is concerned.
Palmer v Simmonds- Certainty of Subject Matter Testator gave her residuary estate to another claiming he should "leave the bulk of my estate to Anne". The phrase "bulk" was not sufficiently certain and so the other beneficiaries kept the residuary- what is a bulk?
Anthony v Donges- Certainty of Subject Matter Testator directed for his widow to receive "such minimal part of the estate as entitled under English Law." Held, there is no such entitlement, the trust failed for uncertainty.
Re Golay's Wills Trusts- Certainty of Subject Matter Testator directed executors to allow the beneficiary to enjoy one of his flats and to receive a reasonable income. Held, the trustees could select a flat to their discretion and it was possible to objectively discern what a reasonable income was depending on the beneficiary's job.
Hemmens v Wilson Browne- Certainty of Subject Matter Solicitor's firm were instructed to draft a document allowing their client's mistress to receive the right to call for a sum of money. The drafted document failed to give these rights. Held, there was no identifiable fund which could form the subject matter of the trust
MacJordan Construction- Certainty of Subject Matter MacJordan entered into a contract with a building developer which began experiencing financial difficulties. MacJordan sought to recover its retention money. There was no separate trust account for the retention money and so there was no identifiable fund to which the retention money would be subject.
Re London Wine Co. - Certainty of Subject Matter Claimant's had bought wine which were stored in various warehouses and were not segregated or identified. In order to create a trust it must be possible to ascertain with certainty the property of the beneficiary, therefore a trust of unidentified tangible property in bulk will fail.
Re Goldcorp Exchange- Certainty of Subject Matter Claimants had purchased gold bars. Upon insolvency they sought to claim their share. There was no trust for those whom had not had their bars segregates as the property to which the trust would attach could not be identified.
Hunter v Moss Moss had promised hunter a claim of shares in a company. However, Moss did not identify which shares were the subject of the arrangement nor did he segregate any shares for Hunter. Held, if the property is unidentified in bulk and intangible the trust will still succeed.
Re Harvard Securities- Certainty of Subject Matter There IS an intelligible distinction between intangible and tangible property.
IRC v Broadway- Certainty of Object 'Complete list test' applied to fixed trusts. Terms are fixed- a comprehensive list can be made specifying exactly whom the beneficiaries are and the proportions they will receive with absolute certainty.
Re Gulbenkian's Settlement- Certainty of Objects The complete list test was affirmed for discretionary trusts (later overruled by McPhail). A power of appointment is valid if one can say with certainty whether any given individual is a member of the class.
OT Computers- Certainty of Objects Claimant company sought to identify the beneficiary's for trust money created for "urgent suppliers". This was void as it was not possible to identify each and every member of the class (beneficiary). It was conceptually certain but not evidentially certain.
McPhail v Doulton- Certainty of Objects Trust was created for the benefit of "any relatives" of employees/ex-employees. The scope and definition of relatives was too uncertain. The individual ascertainability test or the 'is or is not test' was held for fixed and discretionary trusts. Is the individual, with certainty, a member of the class?
Re Baden (no 2)- Certainty of Objects Once a class of persons is conceptually certain using the 'is or is not test' it becomes a question of fact to be determined on evidence (evidential certainty) whether an postulant falls within the class. Relatives= next of kin not ancestral lineage (too wide a class)?
Re Barlow's Will Trusts- Certainty of Objects Barlow declared the remainder of some pictures to be held on trust so her "family and friends" could have the opportunity of buying them first. Held, the term "friends" was too conceptually uncertain to give rise to a trust.
Re Tuck's Settlements- Certainty of Objects Trust was created for future baronets who were married to a wife of Jewish blood and whom worshipped the Jewish faith (which a Rabbi would be conclusive over). The Rabbi's opinion of 'Jewish' defined the class of beneficiaries and so there was no conceptual uncertainty.
Re Benjamin- Certainty of Objects If a beneficiary cannot be found (evidential whereabouts uncertainty) despite steps to find them, the trustees can apply for a Benjamin Order which authorises them to distribute the property as if the beneficiary were dead.
R v District Auditor ex p West Yorkshire- Certainty of Objects A trust was formed in favour of all inhabitants of West Yorkshire. The class of beneficiaries was considered too wide and therefore the trust was administratively unworkable.
Re Manisty's Settlement- The Three Certainties (Limitations) A power to benefit the "residents of Greater London" was considered to bee too irrational, perverse and irrelevant by the settlor and so failed due to Capriciousness.
Re Hay's Settlement- The Three Certainties (Limitations) A trust may seem at face value capricious, however, it depends on the context of the settlor at the time e.g. was he chancellor of London? If a power seems capricious the trustee must consider whether he ought to exercise it, the range of objects and the appropriateness of appointments.
Thrupp v Collett- The Three Certainties (Limitations) A trust was created to pay the fines of convicted poachers whom were in prison. Although it may provide relief for prisoners it was considered to be an unlawful charity and therefore failed due to public policy.
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