3 Certainties- where somebody wants to EXPRESSLEY ESTABLISH A

EXPRESS TRUST
(Knight v Knight 1840)

IN ORDER FOR THERE TO BE A VALID EXPRESS TRUST, 3 CERTAINTIES

MUST BE PRESENT:
1. Certainty of Intention (Words)
2. Certainty of (Subject Matter)
3. Certainty of (objects)

1. CERTAINITY OF INTENTION/WORDS-

- ‘Certainty of intention to create a trust by language used’

- Where the word TRUST is NOT used, Can use other words that are strong
enough that the courts can infer a trust was intended.

Example of precatory words: (not strong enough to intend a trust)

- ‘Feeling confident’ (Raynor)

- ‘In full Confidence’ (Adams)
- ‘It is my desire’ (Diggles)
- ‘I wish them’ (Hamilton)
- ‘In the fullest confidence’ (Williams)

2. Certainty of SUBJECT-MATTER –

- For a trust to exist must be IDENTIFIABLE PROPERTY upon which the

trust obligation can bite. (If the property of the trust, not identifiable,
trust will fail) (London Wine Co)- LWC owned large stock o f wine and
says would hold parts of stock ‘on trust’ no wine was segregated
therefore no valid trust.

- (Hunter)- M owned 950 shares, declared himself a trustee of 50 shares

for H. Trust was upheld on ground that they were intangible assets of
identical value.

- (Palmer)- Gift by testatrix of ‘bulk of her estate’ failure for lack of subject
matter

- (Anthony v Donges) – A stated widow ‘should receive minimal part of

the estate as entitled by English law’ failed for lack of certainty.

- Note- A gift of the residue on trust or otherwise will be valid and certain

- (Re Golay’s WT)- A trust to pay a reasonable income to a named

beneficiary was held valid. Stated that court could ascertain what income
could be in any case, thus resolve uncertainty.

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- (Sprange)- T left sum for H directing at H’s death ‘any some he did not
require’ was to go to x,y,z, z.

3. Certainty of OBJECTS (BENEFICIARIES)

- The object of the trust is normally the beneficiary. (Fixed or

discretionary trust)
- There are SOME TRUST that have certain exceptions where a
purpose trust could exist such as charitable purpose trust or
private purpose trust) (Re Denlley) ‘money is held for
purpose, no beneficiary’ the purpose is the object.
- With ‘BENEFICIARY TRUST’- This means certainty as who the
beneficiaries are
- With ‘Purpose Trusts’ this means certainty of the purpose
itself. The purpose being the object of the trust.

A. To be a valid FIXED INTERST TRUST ‘ beneficiary trust’: needs to over

3 factors:
1. Conceptual Certainty- Class of beneficiaries MUST be
certain. If not conceptually certain money goes to trustees and
goes on a resulting trust from where it had come. Or for
residuary legatees. (Equity abhors a vacuum) has to go
somewhere.
2. Evidential Certainty- Must be possible make a ‘list (test)’ of
all beneficiaries (Broadway Cottages) can work out who gets
what.
3. Administrative Workability- Class of beneficiaries must not
be so numerous as to render it impossible for trustees to
properly administer the trust. (District Auditors West
Yorkshire)- Too big therefore administrable unworkable. Went
to settlor on resulting trust.

B. To be a valid DISCRETIONARY TRUST ‘Beneficial Trust’ – needs to

cover 2 factors:

1. Conceptual Certainty- (class of beneficiaries must be clear)

- (McPHAIL V DOULTON)- List test use to apply to all trust fixed or

discretionary. Therefore a lot of discretionary trust uses to fail. Lord
Wilberforce, List no longer relevant for discretionary trust. Far more
important that the discretionary trust that the test of conceptual certainty
was satisfied. The test for conceptual certainty same as for POWERS of
APPOINTMENT (Re Gulbenkian) (simply where you giver the power to
somebody, legal power to distribute) All that was required was satisfying
the IS or IS not Test- could be given of any person whether they were or
were not a member of the class of beneficiaries as described in the trust.
Can answer it yes/no. TRUST POWERS means DISCRETIONAIRY TRUST

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 - (McPhail v Doulton)- Testator set up dicretionair trust in favor of
employees, ex employees, relatives and dependents. 2 of the classes
are certain. After applying test sent back to CA and renamed (Re Baden
No2) as has to apply is or is not test and did satisy test. However 3
different reasons by 3 different judges.

- STAMP LJ- strictest interpretation. For is or is not test to be satisfied a

trustee had to be able to say if any individual that they described were or
were not in the class described.
- Megaw LJ and Sach LJ- test would be satisfied that if it could be said with
certainty that they fell within the class. Relatives and dependent both
classed as a conceptually certain. Doesn’t matter if cannot locate.
Relatives meant descendants from common ancestor. It has long been the
‘relatives’ should be confined to next of kin only if this is necessary to save
the gift.
- Stamp LJ- Relatives meant next to kin or nearest blood relations

EXAM- DIFFERENT INTERPRETATIONS ARE GIVEN AND WE ARE STILL LEFT IN

A VAGUE STATE ABOUT PERCISELY WHAT THE WORDS RELATIVES AND
DEPENDENTS MEANS. – IF SEE IN EXAM (RE BADON) SAYS THIS IS
SUFFICENTLY CONSEPTUALY CERTAIN.

2. Administrative Workability- (class of beneficiaries are so

big its unworkable)

Somebodies testator/ testatrix/settlor can resolve any conceptual uncertainty by

being more precise or nominate 3rd party, to resolve any doubt. Such as who is
tall and who is not.

(Re Tucks)- given money to trustee to distribute to anyone who was Jew. Not
easy question. Mentioned in trust that Rabi should resolve any uncertain
conceptuality.
(Re Coxen)- could be trustee himself, as long as sufficiently defined state of
affairs that they trustee were to form their opinion.
(Re Barlow)- made will giving instruction to trustee/executors that her
collection of paintings offered for sale below market price for her friends.
Question arose whether was sufficiently certain to be enforced. Giving her
friends right pre-emption (first refusal)

Re Brown Wilkinson- test as to whether that gift. Was not a trust case. Given
her friends right of pre-emption. Was the term friends conceptually certain?.
Stated that test was whether it was possible to say one or more persons that they
qualified as ‘friends of mine’. Not necessary to define what a friend is. This was
not a trust case. Friends are not business acquaintance, social, long or short
standing. Not authority for saying friend is conceptually certain. May be able to
resolve any conceptual uncertainty by saying in the case of any uncertainty of
who is or who is not a friend such nominate some such as wife, children’s. (Can
put to one side not trust case).

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Quick Quiz do again
1. 3 CERTAINTIES. Has certainty of subject matter as 50 K it
is identifiable property. Certainty of object, as it is a
discretionary trust has to satisfy 2 factors. Must be
conceptually certain which it is. Not a big class and
beneficiary identifiable. Fixed interest trust no need to
write a list. Problem with certainty of intention by
wording. As the testator demonstrates clear intention that
he wanted to subject this property to a mandatory trust
obligation. Precatory words not strong enough.

2. Knight v Knight 3 certainties. Trust for sale. Strong words

used declared to sell, and give money to brother.
Certainty of subject matter is painting and a proceeds to
brother certainty of object is brother and is fixed interest
trust. Weird clause, friends have right over paintings to
pick a paining. Whatever’s left is therefore held on the
trust for sale. Valid in context of gift. 2 problems is
friends conceptually valid at all in English law. Is it valid
in the contextual of individual gift? James argument
conceptually uncertain. And is simply trust for sale and
brother gets the money. (Burrow and Philcox). (Re
Barlow). NASTY QUESTION

3. 3 CERTAINTIES. CERTAINTY OF INTEION IS PRESENT AS

CAN BE SEEN BY THE LANGUAGE USED ALSO IT IS AN
IDENTICAL SUBJECT MATTER HOWEVER CERTAIN OF
OBJECT, CONCEPTUAL CERTAINITY IS OR IS NOT. AND
MUST NOT BE SO BIG SO IS IT NOT ADMISTRLAL
UNWORKEABLE. (RE BARLOW)- ‘FRIENDS’ IS
CONCEPTUALLY CERTAIN THEREFORE HAS TO BE
SINCERE. (RE ALLEN) WAS CONCEPTUALY CERTAIN AS
(RE BARLOW). JAMES SAYS SO VAUGE WILL FAIL AND
THEREFORE AUTOMATIC RESULTING TRUST BACK TO
REIDUARY LEGATEES.

4. CERTAINTY OF INTENTION PRESENT, CERTAINTY OF

SUBJECT MATTER PRESENT. DISCRETIONARY TRUST
AND THEREFORE 2 FACTORS. CONCEPTUALY CERTAIN
HOWEVER NOT ADMISTRI WOKEABLE.

5. 3 CERTAINTIES, CERTAINTY OF INTENTION IS IN PLACE

AS GAVE BULK OF HER COLLECTION TO EXECTURORS
AND TRUSTEE. THE SUBJECT MATTER IS PAINITNG.
FIXED INTEREST TRUSTS 3 HURDLES. CONCEPTUALY
CERTAINITY. YES SIMON AND JOAN. IS WORKEBALE AND
POSSIBLE TO MAKE A LIST? HOWEVER THE WORKD
BULK IN UNCERTAIN. NOTHING FOR TRUST TO BITE ON

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RESULTING TRUST BACKFIXED INTEREST TRUST
BETWEEN THE 2.