Unit 2 - The 3 Certainities

What are the three certainties that all trusts require

Certainty of intention

Certainty of subject matter

Certainty of Object

What are powers of appointment

It’s a different option for settlors to decide who benefits.

What is the main case to cite for the Certainties

Knight v Knight 1840.

How is certainty of intention determined and what are the two distinguishable types of language?

You have to look at the language used. Precatory language is language that isn’t binding and signifies a desire or hope. Imperative language is telling the person exactly what they need to do and is binding.

What is up to discretion in a discretionary trust

It’s up to the trustee to decide how and when the property is distributed.

Fiduciary powers

The donee is under no obligation to distribute at all but periodically has to consider whether to distribute

Mere power

They are under no obligation to distribute and doesn’t even have to consider it.

Re Adam’s and Kensington Vestry 1884

This is a certainty of intention case under the three certainties from Knight v Knight. A gift from a husband to a wife to distribute in her discretion was not found to be a trust because of the precatory language.

What happens if there is no certainty of intention.

There is no trust created and the property is an outright gift to the recipient. There are no trust obligations to the disposition.

What is certianitu of subject matter

What is actually being disposed of

Certainty of subject matter

The property has to be capable of being identified and defined. It doesn't have to be defined right now because for wills in terms of residue its indefintiable after.

Case for unsegreagted assets

Re London Wine Company -

• The bottles were not separated or labelled

• They were just part of a larger bulk in a warehouse

If it’s part of a bulk:

• It must be segregated or specified

subject matter of shares and case*

Shares are intangible and identical So even though he didn't identify which ones in specific, the trust was still valid. Hunter v moss

What happens if there is no subject of matter

Thrn there is no trust created and nothing can be disposed of.

What is certainty or object

It's about who the trust is for.

What is the key case for certainty of object

Morice v Bishop of Durham (1804)

Why does there need to be certainty of object for a valid trust ( effect on courts and the trustee etc)

Because the trustee as the distributer cannot carry out their function of they are unaware who the beneficiaries are.

Courts also cannot identify the beneficiaries in cases where the trustee breaches their duty

The beneficiaries if they need to enforce against the trustees need to know whether they have standing.

What happens if there is uncertainty of object

It causes a resulting trust back to the settlor. If the settlor is dead then it results back to the estate.

For a fixed trust what is the case for the certainty of object. Explain the rule also*

Case is IRC v Broadway cottages- a complete list of the objects is required. The number and identity of the beneficiaries also needs to be clearly identified.

For a discretionary trust what is the rule and the case?

The case is McPhail v Doulton 1971 and the rule is that the donee of a power has to be able to say with certainty of any given person whether or not he is within the scope of power(if he is a beneficiary). Known as the given postualant test.

What are the reasons discretionary trusts still fail despite the mcphail test and the cases.

Administrative unworksbility - R v District Auditor ex p West Yorkshire MCC

Capriciousness - Re Manistry Settlement 1974

Re Baden Deeds trust

• class must be conceptually certain, but it can be wide as long as you know who is in or out.

Administrative unworkability - case explain

• Concept: A trust can fail if it is administratively unworkable, meaning it is practically impossible for the trustees to carry out the trust because the class of beneficiaries is too large or ill-defined.

• Facts: The West Yorkshire County Council tried to set up a trust to benefit “all the inhabitants of West Yorkshire.”

• Problem: The class of beneficiaries was too wide (millions of people) and it would be impossible to administer the trust effectively.

Capricousness

• Concept: A trust will fail if it is capricious, meaning the settlor’s instructions are so arbitrary or unreasonable that they make no sense.

• Facts: In Re Manisty Settlement, the settlor left property to a discretionary trust for “such of my family as my trustees think fit to benefit.”

• Problem: There was no rational basis for how the trustees should decide who benefits; it was essentially random.

• Decision: The trust was valid because the trustees still had discretion, but the case is cited as an example of the limits of trustee discretion—if a trust were truly arbitrary, it could be void for capriciousness.

What are the two ways to cure conceptual uncertainty

Opinion of trustees and opinion of third party

Explain the case involved in opinion of trustees

Re Coxon 1948- the High Court held that a gift subject to a condition precedent was not void for uncertainty because the trustees’ decision was sufficient to determine the widow’s interest, illustrating that for GSCPs, trustee discretion can cure uncertainty

Re Tuck's Settlement Trusts |1978. 2 WLR 411

In this case, the court held that the term "dependents" was sufficiently certain to create a valid trust. The court reasoned that "dependents" could be interpreted to mean individuals who were financially dependent on the settlor.

One person test

Re Allen 1953- states that if it is possible to find at least one person who fits within the class of beneficiaries described in the trust, then the trust is not conceptually uncertain. This is a less strict test of certainty of objects.

In conclusion, the concept of conceptual uncertainty in trusts revolves around the clarity of the terms used to describe the beneficiaries. The case law has established certain principles and tests to determine whether a trust is conceptually uncertain.

Re Barlow's Will Trusts [1979] 1 WLR 278

In this case, the court held that the term "old friends" was sufficiently certain to create a valid gift subject to a condition precedent. However, the court noted that the term would not have been conceptually certain if it were a trust.

What is a GSCP

Gift Subject to Condition Precedent

Palmer v Simmonds

Saying ‘the bulk of my estate’ was unclear and the trust was not valid. Certainty of subject.

Explain properly the arbiter clause

• If the uncertainty is minor (evidential or interpretative) → clause works ✅

• If the uncertainty is conceptual (no clear class at all) → clause fails ❌

Re coxen - the trustees could decide whether a widow had “ceased to reside” with her husband, which was a matter of judgment rather than defining the class itself.