The Three Certainties

The Three Certainties

1. All 3 certainties must be present - Knight v Knight

   • Intention
   • Subject Matter
   • Object
   • As Dillon, LJ said in Hunter v Moss [1994] WLR 452: “It is well established that for the creation of a trust there must be the three certainties reffered to by Lord Langdale in Knight v Knight (1840) 3 Bean 148: i.e.

2. Intention

   • Words/Conduct
     • Imperative/ Obligatory/ Mandatory Wording
     • Precatory wording: words that obligate someone morally as opposed to legally e.g. hope, desire
     • So there must be certainty that the settlor or testator intended to impose binding obligations on his chose trustee.
   • Re Adams and The Kensington Vestry (1884) 27 Ch D 394, CA
     • Words present
     • Precatory wording
       • "I give, devise, and bequeath"
   • Comiskey v. Bowring-Hanbury [1905] AC84 HL
     • Words present
     • If there is a trust then there is an obligation, the courts found that there was a trust due to the additional wording, this is a grey area, however the defendant was obliged to give to the nieces
     • Precatory wording
       • "in full confidence "
   • Jones v. Lock (1865) 1 Ch App 25
     • Words not present, conduct present
       • I give this to baby; it is for himself, and I am going to put it away for him, and will give him a great deal more along with it.” He then placed the cheque in the baby's hand,
     • Conduct of handing a baby a cheque was symbolic only, insufficient to create a trust
   • Paul v. Constance [1977] 1WLR 527
     • Conduct present
       • Paying money into account
         • - This was a trust as putting it into their bank account, as a trustee of the bank account, this was sufficient to determine a trust was present
           • “The money is as much yours as mine.”

3. Subject Matter

   • Property must be certain
   • Palmer v. Simmonds (1854) 2 Drew 221
     • “to leave the bulk of my residuary estate” – “for his own use and benefit”
     • "Bulk is uncertain"
     • It is not possible to ascertain exactly what property is under the trust
   • Re London Wine Co [1986] PCC 121
     • Tangible Property - I.E Wine
     • “The wine remained in bulk storage at the warehouse and was not divided up or allocated to any particular purchase"
       • Property must be able to be segregated, tangible property is only valid if the terms are sufficiently segregated
   • Hunter v. Moss [1994] 1WLR 452 CA
     • Intangible Property - I.E Company Shares
       • Specific shares not ascertained or identified.  Whether sufficient certainty of subject matter to constitute valid trust
   • Re Golay [1965] 1WLR 969
     • Although the will on its own did not specify which flat was to be enjoyed by the beneficiary, it did provide a mechanism by which the choice of flat could be made by the executors

4. Objects

   • There must be human beneficiaries (except for charitable trusts
     • Beneficiaries must be individually identified or identified as a member of a clearly defined class
     • No need establish this for charitable trusts because the AG and the Charity Commission have the legal authority to enforce charitable trusts
   • Fixed trusts
     • Conceptual and evidential certainty – fixed trust is to confer fixed benefits upon fixed beneficiaries - you need to know who are all of the beneficiaries
   • Discretionary trusts and powers of appointment
     • there is no division of equal shares, trustees have a discretion – so do not necessarily need a complete list of the beneficiaries
   • IRC v. Broadway Cottages Trust [1955] Ch.20
     • you must be able to compile a complete list of benefices in advance for there to be certainty