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CERTAINTY OF INTENTION AND SUBJECT MATTER
DECIDE IF IT'S A WILL, WHETHER IT CREATES A TRUST, PEOPLE EXECUTING THE WILL ARE
NOT TRUSTEES
 To determine whether trust applies, interpret whether gifts or create further
 Find if there is a trust and then check for the 3 certainties
Topic: Nature of the Trust
The origin of the trust
The separation of legal title and equitable title (beneficial interest)
- Settlor/Testator (Founder)
- Trustee/s
- Beneficiary or beneficiaries
 Saunders v Vautier [1835-42] All ER Rep 58
Applications of the Trust
Categories of Trusts
(a) Private Trusts
(i) Express Trusts (Bare trusts and ‘active’/ ‘special’ trusts)
(ii) Resulting Trusts
Westdeutsche v Islington BC [1996] AC 669 (HL) per Lord Browne-Wilkinson
Presumptive resulting trusts
Kingsnorth Finance v Tizard (1986) 1 WLR 783
Automatic resulting trusts
Vandervell v IRC [1967] 2 AC 291
(iii) Constructive Trusts
Bannister v Bannister [1948] 2 All ER 133
(b) Public Trusts (Charities)

Sliding scale from power to fixed trust where the duties of the trustees or appointor become more
onerous and the ability of the beneficiaries to enforce strengthens:
Mere (bare power) --> fiduciary power--> Non exhaustive DT--> Exhaustive DT--> FT
The Requirements of an Express Trust
An express private trust begins with property that belongs to a settlor /testator
...
Establishing
a trust is one way of doing this and in furtherance of the same policy, the courts have allowed
several different types of trust to develop
...
The fixed trust is based on duty, not discretion

Discretionary Trusts
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To my trustees Tim and tom to hold for A for life, remainder on trust for such of my
nephews and nieces in such shares as my trustees shall in their absolute discretion
decide
Because it is a trust, the trustee must choose one or more of the nephews and nieces to
whom to give the property
...
There is a mixture of
duty and discretion
Duties of trustees in DT
The trustees must choose more carefully in a DT than in a FP
 Mc Phail v Doulton [1971] AC 424
o Difference between FP and DT is that DT is a trust and the trustees MUST
distribute the trust property
...
the four of
them, if they were all living, could come to the Court and say to the trustees;
'Hand over the fund to us'
Under a DT, the trustees must consider more carefully than in FP , because , ultimately,
they must choose some beneficiaries to whom to distribute the property
...


Exhaustive DT - trustees required to distribute all the money
 Re Locker's ST [1978] 1 All ER 216
o The terms of the trust were that
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pay, divide, or apply the
income of the trust fund to or between or for the maintenance, support,
education or benefit of any ot more to the exclusion of the other or others of
the beneficiaries as the trustees shall in their absolute discretion determine'
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The trustees did
not make a distribution between 1965 and 1968 and asked the court's advice
on whether they should do so
o Held: This trust was contrasted with FP and a non exhaustive DT and told the
trustees that it was their duty to distribute for those years

NON Exhaustive DT- there must be an express power to accumulate

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 Sainsbury v IRC [1970] Ch 712
o The trustees held the property on trust to apply the income at the trustees'
absolute discretion for Elsie Sainsbury during her life and to accumulate the
surplus income for 21 yrs after the testator's death
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This was an EDT
NEDT and FP look very similar
...
In a NEDT they
would have to make some choices and distribute some of the money, they just do not
need to distribute it all
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‘Powers of Appointment’
an authorisation given by the donor to the donee (apointor) to appoint (transfer)
property in which he may or may not have an interest to another person or persons
(objects or appointees)
eg: To my trustees Tim and Tom to hold for A for life, remainder to such of my nephews
and nieces as A may decide, but in default of appointment, to my sister absolutely
so
...
A would stipulate in
his will which nephews or nieces receive the property after he dies
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This is known as a gift over in default of
appointment
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The point of power of appointment is that A is free to choose or not choose the next
beneficiaries
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Power (mere or bare or personal)
1
...

3
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A person who is given the power of appointment is known as the appointor
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The appointor has no duties to carry out and has unfettered discretion
A can choose someone or not choose someone and does not even have to
consider making a choice

pg 97 Re Gulbenkian [1970] AC 508( Lord Reid at 518) : mere power on individual = no duty
to exercise it or even to consider whether he should exercise it
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A settlor who entrusts a power to his trustees relies on them in their
fiduciary capacity so they cannot simply push aside the power and refuse to consider
whether it ought in their judgment to be exercised
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If she did
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not appoint, the property was to go to her brothers and sisters anyway
...
Her sister was
able to challenge this appointments, as she was also one of the beneficiaries
entitled in default of appointment
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This is known as a fraud on power
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If the power was held as a beneficiary or private individual , then it would be a
mere power
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executed within 21 years from the date hereof of appoint
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Trustees who hold a FP cannot just ignore it
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They must look at the range of choice open to them eg in Re Hay they could
choose practically anyone
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Consider the appropriateness of individual appointments
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They can, however, challenge the trustees' decisions , or lack of decisions, if the trustees fail
to consider properly or bona fide
 Turner v Turner [1984] Ch 100
o The settlor, appointed his father, sister-in- law and brother as trustees
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The
trustees had power to appoint two members of the Turner family and made
3 appointments
o Held: Mervyn Davies J at 110 : The appointments were void
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 Mettoy Pension Trustees v Evans [1991] 2 All ER 513 - The court could instruct the
trustees on how to distribute the property
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Although they can force the trustees to consider
properly, they cannot compel the trustees to choose them
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The equitable interests belong to those who are entitled in
default of appointment
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--> if uncertain in any of these - invalid
The fundamental principle: the trust must be capable of being controlled and enforced

A
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Use of the word 'trust': the word 'trust' need to be used to create a trust
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--purely moral obligation
Older cases involving precatory words:
 Lambe v Eames (1871) 6 Ch App Cas 597, CA:
o The will of the testator left his estate to his widoe 'to be at her disposal in any
way she may think fit, for the benefit of herself and her family' His widow
tried to dispose of some of the property outside the family
o Held: the words used meant that this was just a gift with a request as to how
she used the property
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 Re Adams and the Kensington Vestry (1884) 27 Ch D 394, CA
o Facts: testator left his full property to his wife in full confidence "to be at her
disposal in any way she may think best for the benefit of herself and family" mother bound to take care of children
o --> no trust Cotton LJ: 'we have to look to at is the whole of the will which we
have to construe and if the confidence is that she will do what is right as
regards the disposal of the property, i cannot say that that is, on true
construction of the will, a trust
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o A trust will be created if, on the proper construction of the whole instrument
purporting to create a trust, including any precatory words, an intention can
be found to subject the property to mandatory obligations
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Although the wording seems vague at first with the
phrase ' in full confidence' used again, the greater detail on how the
property is t be divided indicates a trust
More modern declarations of Trust
 Paul v Constance [1977] 1 WLR 527
o "The money is as much yours as mine"
o Mr Constance was separated from his wife and living with Ms Paul
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Because they were embarrassed
at opening an account in joint names, the account was in Mr Constance's
name only
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Ms Paul claimed that Mr Constance held the money on trust for her
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The
judge accepted that conclusion
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 Hunter v Moss [1994] 3 All ER 452
o Mr Moss employed Mr H to work for his company
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Mr M paid H the dividends on the shares
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o Held: I find that, as from that conversation in early September 1986, Mr Moss
held 5%of MEL's issued shares (i
...
Even if he did not
in terms use the words 'in trust', the sense of what he then said was that he
would thenceforth hold the shares on such a trust
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Don't let that bitch get anything'
o Held Carnwath LJ at 64 :Applying that approach, it seems to me that the most
likely interpretation of Mr Gildbert's intentions, as expressed in the
'enrolment card' and elaborated by his conversation with Mr Gold , was, as
pleaded in the amended statement of claim, namely that he should hold
them as trustee for her to apply those moneys for the use and benefit of her
children
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All that a
court can do is to try to interpret the words used
Self- Declaration of Trust
A person purports to hold his own property for the benefit of another
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o The key question was whether he had given the cheque to his son, or held it
on trust for him, or it remained part of his estate
o Lord Cranworth stated that it would be dangerous if 'loose conversations of
this sort' were sufficient to declare a trust and that all that the father had
meant was that he intended to provide for his son, rather than to create a
proprietary interest in the cheque for a child
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Commercial Context
There is a general reluctance to find a trust arising from a commercial relationship but
where there is clear evidence of the necessary intent, a trust will be found
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o A trust can be created without even using the word 'trust'
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When the company became insolvent the question
arose whether the money in the account was held on trust of the customers,
in which case it would no form part of the general assets of the company
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'
 Tito v Widdell: the word 'trust' in itself will not indicate the existence of an intention
to create trust, since the word may not have been used in as a technical legal term
Sham intention : the court may refuse to find that a trust was validly created if such an
intention was a 'sham' and at the time it was made the owner had no real intention to
subject his property to a trust-->
1
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2
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Midland Bank plc v Wyatt : settlor purported to declare himself a trustee
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A trust that was not a sham when created cannot be made a sham subsequently
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Certainty of subject matter
Description of Subject Matter
Must be defined with sufficient certainty
 Palmer v Simmonds
o (1854) 2 Drew 221 -“the bulk of my said residuary estate" -not sufficiently
certain (could mean anything between 51% -99%)
 Sprange v Barnard (1789) 2 Bro CC 585
o "for his sole use; and at his death the remaining part of what is left, that he
does not want for his own wants and use, to be divided between my brother
J, my sister W and my sister B, to be equally divided between them
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to my daughter Charlotte"-failed trust ; Maria died

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o The trust failed because the beneficial shares were uncertain
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"enjoy one of my flats during her
lifetime and to receive a reasonable income from my other properties
o Held : there was no problem with the flat because , unlike Boyce, there was still
someone to choose which flat; the executors
o sufficiently certain as the court was able to identify criteria to determine what
is reasonable income
Type of Property involved -certainty of subject matter can depend upon the type of
property
 Re London Wine Co (Shippers) Ltd [1986 PCC 121
o A company acquired stock of wine that was deposited in various warehouses
...
The company went into receivership and the question for the
court was whether the wine was held on trust for the customers
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There might be 1,000 cases of a particular
wine in the warehouse and the customer might have paid for 100 cases, but the
customer cannot identify which particular cases belong to him
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A trust property must be 'specific or
ascertained' for a trust
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Hunter brought a claim against Moss for
them, arguing that Moss's promise had created a trust over those 50 shares
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o Held: On this occasion, however, both Colin Rimer in the High Court of
Justice and Dillon, Mann and Hirst LJJ in the Court of Appeal felt that, because
this case dealt with intangible rather than tangible property, this rule did not
have to be applied
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1
...
Types of share: class of shares/ one or more companies?
3
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Hunter v Moss key principle - that a trust of part of a fungible mass, such as
shareholding, will not fail for uncertainty where there has not been an
appropriation of any specific part of the mass for the beneficiary, as long as the
mass itself is sufficiently identified and as long as the beneficiary's proportionate
share of the mass is not uncertain
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because share are identical, no segregation needed for intangible property unless
in a bank account
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Also known as
Pearson v Lehman Brothers Finance S
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These individual deposits were bought and sold and exchanged for
other shares and often mixed together with other deposits
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o However, its trusteeship was constituted at once, and difficulties in accounting
as a result of what happened later do not subvert the proposition that the
securities were held on trust from the time of their first acquisition
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It is odd to allow a trustee to use
trust property for their own benefit, and as far as certainty of objects goes, it
seems to contradict the basic principle, that the courts should be able to
identify exactly what property they are granting enforcement against
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Before it was delivered to
them, the company became insolvent
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o A few customers succeeded because their bullion had been segregated from the
bulk, but most claims failed because there had been no segregation, so that

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legal title did not pass to the customers and the bullion was not held on trust
because their property could not be identified in the bulk
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Bottles of wine
are chattels and therefore have tangible existence
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Shares though, are intangible property
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It is not possible to actually pick up a share
and put it in another place
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79-94)
Davies & Virgo (2013) Chapter 3 (pp 65-86)
Moffat: chapters 4
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Cases:
Paul v
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Moss [1994] 1 WLR 452
Re Goldcorp Exchange Ltd [1995] 1 AC 74
Questions
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A gift can be given at any time; but if you are supposed to be a trustee, obligations are
imposed
Courts : Essential Test: whether the creator of the trust wanted somebody to hold property
for the benefit of another person , so that he or she is under duty to do so
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Tom died recently
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--purely moral obligation
 Expect Sam to look after parents - no need to put obligation on Sam
Re Adams no trust # Comisky v Bowering-Hanbury yes trust- settlor's nieces ,
relationship further away
(b) “I direct my trustees to hold the bulk of my residuary estate on trust for my wife,
Sarah”
 Obligation on someone? yes then look certainties
 certainty of intention -yes, direct
 certainty of object, yes wife
problem-certainty of subject matter - BULK- Palmer v Simmonds (1854) 2 Drew 221 -“the
bulk of my said residuary estate" -not sufficiently certain
 if just 'residuary estate' = good enough

(c) “The contents of my wine cellar to Bert and whatever is left in the event of his
death to my niece, Sue”
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Dolly collected paintings and sculptures
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For this purpose she decided to settle two paintings (one titled
“Illusion” and the other “Façade”) and two sculptures on the terms of these trusts
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Each separate trust document read: “The trustees shall hold
one painting and one sculpture on trust for the individual beneficiary
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 certainty of object yes
 subject matter? no, which painting goes to each child? 2 different paintings but no
segregation
(b) Would your answer differ if the sculptures were, in fact, identical?
 still, must assign each painting to each child specifically
(c) Would your answer differ if the items of property were shares in an ordinary
company instead?
Hunger v Moss

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8
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Types of share: class of shares/ one or more companies?
 Hunter v Moss key principle - that a trust of part of a fungible mass, such as
shareholding, will not fail for uncertainty where there has not been an appropriation
of any specific part of the mass for the beneficiary, as long as the mass itself is
sufficiently identified and as long as the beneficiary's proportionate share of the
mass is not uncertain

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