CERTAINTY OF INTENTION
Problem question
(1) Provisionally classify the type of provision (eg. trust or power) and which type (eg. fiduciary or
mere power)
(2) Determine whether the provision meets various other requirements for creating an express trust
a. Capacity- the person creating the trust (and any power) must have legal capacity to do
so (age of majority and not mentally incapacitated)
b. Certainty- the trust (and any power) must be sufficiently certain through the ‘three
certainties’ (intention (confirm trust or power and type), subject-matter, objects)
c. Formality- the relevant formality requirements for creation of the trust must have been
met
d. Constitution- the trust must be fully constituted
Capacity
Settlor cannot be immature
Edwards v Carter [1893]- settlement made by child is voidable by child before or
reasonably soon after 18th birthday
No capacity where mental incapacity
Re Beaney [1978]- settlement made by incapacitated person is void
However, s18(1)(h) MCA 2005 provides for the court to make settlement of property or
execute will on behalf of a person who lacks mental capacity to do so
Three certainties are established in Knight v Knight [1840]
‘First, if the words are so used that, upon the whole, they ought to be construed as imperative;
secondly, if the subject of the recommendation be certain; thirdly, if the objects or persons intended to
have the benefit of the recommendation or wish be also certain’
(1) Certainty of intention relies on the key test of ‘did the creator want to impose a mandatory
obligation on someone to hold property for benefit of another?’
Question of fact depending on the construction of the document, will or circumstances
Creator did not have to understand that this would be the effect of what creator said/did
‘(It arises even where) parties themselves have given no thought at all to the terms of
the consequential trust, if indeed they even recognised its existence’ (Pearson v Lehman
Brothers Finance SA [2010])
No specific form of words necessary- the word ‘trust’ need not be used
The question turns on whether, in substance, a sufficient intention to create a trust has
been manifested (Re Kayford Ltd [1975])
Imperative words (such as words of obligation) will generally be indicative of an intention to
create a trust (eg. ‘must’, ‘shall, ‘will distribute trust fund’)
However, a moral or family obligation will not suffice
Re Snowden [1979]- testatrix left residuary estate to her brother absolutely, but was
indecisive about how estate was to be divided among her nephews and nieces (relying
on her brother to dispose of this)
Problem question
(1) Provisionally classify the type of provision (eg. trust or power) and which type (eg. fiduciary or
mere power)
(2) Determine whether the provision meets various other requirements for creating an express trust
a. Capacity- the person creating the trust (and any power) must have legal capacity to do
so (age of majority and not mentally incapacitated)
b. Certainty- the trust (and any power) must be sufficiently certain through the ‘three
certainties’ (intention (confirm trust or power and type), subject-matter, objects)
c. Formality- the relevant formality requirements for creation of the trust must have been
met
d. Constitution- the trust must be fully constituted
Capacity
Settlor cannot be immature
Edwards v Carter [1893]- settlement made by child is voidable by child before or
reasonably soon after 18th birthday
No capacity where mental incapacity
Re Beaney [1978]- settlement made by incapacitated person is void
However, s18(1)(h) MCA 2005 provides for the court to make settlement of property or
execute will on behalf of a person who lacks mental capacity to do so
Three certainties are established in Knight v Knight [1840]
‘First, if the words are so used that, upon the whole, they ought to be construed as imperative;
secondly, if the subject of the recommendation be certain; thirdly, if the objects or persons intended to
have the benefit of the recommendation or wish be also certain’
(1) Certainty of intention relies on the key test of ‘did the creator want to impose a mandatory
obligation on someone to hold property for benefit of another?’
Question of fact depending on the construction of the document, will or circumstances
Creator did not have to understand that this would be the effect of what creator said/did
‘(It arises even where) parties themselves have given no thought at all to the terms of
the consequential trust, if indeed they even recognised its existence’ (Pearson v Lehman
Brothers Finance SA [2010])
No specific form of words necessary- the word ‘trust’ need not be used
The question turns on whether, in substance, a sufficient intention to create a trust has
been manifested (Re Kayford Ltd [1975])
Imperative words (such as words of obligation) will generally be indicative of an intention to
create a trust (eg. ‘must’, ‘shall, ‘will distribute trust fund’)
However, a moral or family obligation will not suffice
Re Snowden [1979]- testatrix left residuary estate to her brother absolutely, but was
indecisive about how estate was to be divided among her nephews and nieces (relying
on her brother to dispose of this)
