Certainties of trust P/Q

Authors Avatar

Matthew Hodson, Mary Lee ,Seminar Group 14

In knight v knight, Lord Langdale MR clarified that a trust will be invalid unless the ‘three certainties are shown’. These are designed to protect trustees, as otherwise trustees could easily breach the trust and become liable for the loss. Furthermore the court views certainty as essential so if necessary, it can control the trust. Therefore, in each area all three certainties must be satisfied, however it must be noted the tests may vary to the type of trust or power created.

  1. A discretionary trust has been created, this compels trustees to act (‘shall’ indicates this); however it allows trustees to exercise discretion to whom the money is given to (anyone who is an avid science fiction fan). This allows the trustees to choose who benefits within this category.  

The certainty of intention is clear and has been satisfied. Rose (the settlor) has left £400,000 to Mickey and Rickey (her trustees) to benefit avid science fiction fans (the beneficiaries). The certainty of the subject matter is satisfied, 400,000 is subject to the trust. What is controversial is the certainty of the objects (beneficiaries).

What is controversial is the certainty of the objects (beneficiaries). This will render a trust void; the test for certainty of objects within discretionary trusts was established in Mcphail v Doulton. It must be said with certainty that ‘any given postulant’ (individual) is or is not a member of the class ‘avid science fiction fans.’ This must apply to all individuals. It can inferred however that it maybe uncertain who is an avid science fiction fan. How much interest is needed to become an avid fan? E.g. is it essential for potential beneficiaries to have watched star wars, or attended a majority of science fiction events. It would be very hard to distinguish ‘who is and who is not’ an avid fan. As a result the trust will be void.

Join now!

Alternatively, in Re Baden (No 2) it was suggested that the onus of proof is on the beneficiary, if he could prove he was an avid fan then he was in, if he failed to show this he was out. This maybe able to overcome the problem and will mean the substantial number of certain beneficiaries will be able to benefit. However, this is unlikely as in most cases it would be hard to show who is and who isn’t an avid fan. Therefore, it can be suggested the trust is void.

Additionally, Lord Wilberforce introduced ‘administrative unworkablilty’ ...

This is a preview of the whole essay