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CERTAINTIES
A trust should be upheld if there is sufficient practical certainty in its definition to be
carried out, if necessary with the administrative assistance of the court, according to
the expressed intention of the settlor LORD WILBERFORCE (MCPHAIL V DOULTON) (RE BADEN
[NO. 2])
A settlor must declare the terms of a trust with sufficient certainty or precision for a
trustee to know what they must do.
There are mainly three types of certainties LORD LANGSDALE (KNIGHT V KNIGHT).
Certainty of Intention
The intention must be manifested or expressed (RE VANDERVELL).
The test for determining the intention of the putative settlor is an objective one i.e.
what a reasonable man would term those words to be LORD DIPLOCK (GISSING V
GISSING).
The intention of the settlor must be to create an obligation enforceable in a court of law
upon the trustee (MCCORMICK V GROGAN).
The words used must be imperative (WRIGHT V ATKYNS).
A precatory expression is not sufficient for a trust to be declared valid as per LOPEZ LJ
(Re Hamilton) because as per JAMES LJ; the courts imposing a trust where the settlor did
not intend to is a very cruel kindness (LAMBE V EAMES) (MUSSOORIE BANK V RAYNOR) (RE
ADAMS & THE KENSINGTON VESTRY).
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However, the courts may find a trust from precatory words if on a proper construction of
the language, they reflected the intention of the testator (COMISKEY V BOWRING HANBURY)
(RE SNOWDEN) (RE HAMILTON).
A mere intention to benefit another is not enough to create a valid trust (JONES V LOCK).
Intention may also be inferred from the conduct (i.e. acts or words) of the grantor ( RE
KAYFORD) (PAUL V CONSTANCE) (ROWE V PRANCE) (CHELSEA CLOISTERS LTD) (RE CHALLANOR CLUB).
It is not necessary that the term trust determines the intention of the putative settlor
or guarantees that a trust has been created. It may simply mean nothing more than a
duty owed. (TITTO V WADDELL).
Where a form of words has once been held to create a trust, they will stand as
precedent (RE STEELES WT).
The intention to create a trust must be genuine and not a sham (MIDLAND BANK PLC V
WYATT) (SHALSON V RUSSO).
SELF-DECLARATION: the property will remain with the settlor JONES V LOCK)
TRANSFER (GIFT): the property remain with the settlor (RE ADAMS).
EVIDENTIAL UNCERTAINTY: where the settlor expresses his gift in such a way that
evidence must be given to identify the property or the person defeats gift and
trust.
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PENNER: There seems to be no good reason to distinguish the clear rule in ( RE LONDON
WINE) for intangible property a trust cannot exist unless the property to which it relates
is specifically ascertained. A better view is that the trustee has not created a trust
properly, and while he may have been contractually obliged to do so, it is conceptually
confused to deal with his failure to make himself a trustee by treating him as a trustee
in breach.
In case of fixed trust, it should be clear as to what property is held on trust for which
beneficiary (BOYCE V BOYCE). However, courts now employ the equitable maxim equity is
equality which prevents the trust from failing for uncertainty of beneficial shares
(BURROUGH V PHILCOX).
Certainty of Objects
In order for a trust to be effective the object or each member of a class of objects must
be known with certainty EVERSHED MR (RE ENDACOTT); LORD DENNING (RE VANDERVELL
TRUST [NO.2]).
The test to be applied for uncertainty of objects depends upon the nature of the trusts.
Fixed Trust
In case of a fixed trust, the terms and interest of each beneficiary is specified. If each
beneficiary is not ascertainable the trust will fail as the trustees will not be to distribute
the property correctly.
The description of beneficiaries should involve neither conceptual nor evidential
uncertainty. The whereabouts or continued existence of the beneficiary is irrelevant, as
their shares can be paid to the court.
The test to identify the objects of a fixed trust is the COMPLETE LIST TEST a list of
beneficiaries is drawn, which on a balance of probabilities is complete i.e. maximum
number of possible beneficiaries, at the time for distribution (IRC V BROADWAY COTTAGES).
Discretionary Trust
Under a discretionary trust, the trustee has the discretion to determine which
beneficiary and to what extent should obtain. Hence, uncertainty of object will not cause
the trust to fail.
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The test for identifying objects of a discretionary trust previously was the COMPLETE LIST
TEST. However the test changed to: CAN IT BE SAID WITH CERTAINTY THAT ANY INDIVIDUAL IS OR
IS NOT MEMBER OF THE CLASS, i.e. the IS OR IS NOT TEST (MCPHAIL V DOULTON) (RE
GULBENKIANS SETTLEMENT).
This means that the potential beneficiary will have to show that they fit within the
description of the objects.
Where the class of objects is uncertain, it isnt conceptual uncertainty; there is merely
evidential uncertainty (RE BADENS DEED TRUST [NO. 2]).
SACHS LJ: where conceptual certainty is found, a trust can fail for evidential uncertainty
as the burden of proof is on the beneficiary to prove that he fall within the class of
beneficiary. If he fails to prove that he is within the class, then he is outside the class.
PENNER holds that although SACHS would not allow evidential uncertainty to defeat the
trust, he does rely upon the existence of evidence to define the boundaries of the class.
MEGAW LJ: If it could be said with certainty that a substantial number of beneficiaries
fell within the class, the class was certain. This approach has the effect of creating a
class within the class. It has the effect of cutting down the class of beneficiaries,
contrary to the settlors intention.
STAMP LJ: He approached the IS OR IS NOT TEST literally i.e. conceptual and evidential
certainty of the class was required, for otherwise it would be impossible to say whether
the individual was a member of a class or not. This is nearly the exactly the same as
COMPLETE LIST TEST.
A trust that the settlor intended for the entire class and if the trustee failed to make a
selection, then equal division is still appropriate on the basis of COMPLETE LIST TEST
(BOROUGH V PHILCOX).
Power of Appointment
A mere power of appointment is where the settler gives the donee of the power a
discretion in relation to whether or not to make distribution.
The test for determining certainty of subject matter here is the IS OR IS NOT TEST; their
objects are certain if it is possible to say of any given person that he is, or is not, an
object of the mere power (RE GESTETNER SETTLEMENT).
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One must show compliance with the stipulated condition, rather than certainty of object
so as to show that he fits the criteria to take the gift (RE BARLOWS WILLS TRUST).
Capriciousness
It is concerned with sensibility of the trust i.e. it applies to fixed and discretionary trusts.
If the courts feel that the trust has negated any sensible intention on part of the settlor
such a trust would not be valid (RE MANISTYS) (RE HAYS ST).