CERTAINTY OF OBJECTS
McPhail v Doulton [1971] emphasised the importance of certainty of objects in that
‘A trust should be upheld if there is sufficient practical certainty in its definition for it to be
carried out, if necessary, with the administrative assistance of the court’
There are six aspects of certainty
(1) ‘Essential test’- the key test for determining certainty of objects (eg. a' complete list’) must be
drawn up (fixed trusts/Burrough discretionary trusts) or it must be possible to say of ‘any given
individual’ that they fall in or outside the class (‘is or is not’ test)
(2) ‘Conceptual certainty’- refers to the precision of language used by the settlor to define the class
of person whom he intends to benefit
(3) ‘Evidential certainty’- refers to the extent to which the evidence available in a particular case
enables specific persons to be identified as members of those classes, as so as beneficiaries or
potential beneficiaries
(4) ‘Ascertainability’- refers to the extent to which ‘the whereabouts or continued existence’ of
persons identified as beneficiaries or potential beneficiaries can be ascertained
(5) ‘Administrative workability’- refers to the extent to which it is practicable for trustees to
discharge the duties laid upon them by the settlor towards beneficiaries or potential
beneficiaries
(6) ‘Capriciousness’- refers to whether there is a rational intention between settlor/testator and the
class of objects (very an issue on the facts)
Exam
Identify the device: is it a fixed trust, discretionary trust Burrough type, discretionary trust Baden
type or power?
Apply the appropriate test of certainty for that device as determined by case law. Two aspects:
(1) “essential test” e.g. complete list/any given individual etc; (2) conceptual/evidential certainty
etc.
If the device fails for uncertainty: consider means of avoiding/curing the uncertainty (e.g. third
party appointed to determine?
Fixed trusts
(1) Essential test (‘complete list’, as derived from IRC v Broadway Cottages Trust [1955])
, Settlor directed £80,000 to be held on trusts to apply the income for, among other things, the
benefit of all or any members of a wide class of beneficiaries, inc. Broadway Cottages Trust
Trust for distribution of income void for uncertainty as it was impossible at any given time to
obtain a complete list of all the beneficiaries
‘A trust for such members of a given class as the trustee shall select is void for uncertainty
unless the whole range of objects eligible for selection is ascertained or capable of
ascertainment’ (Re Ogden [1933])
However, a complete list is not required at the point of creation, only at the point of distribution
(eg. can have trust for A’s grandchildren, including those not yet born, even though their names
cannot be listed when trust created)
(2) Conceptual certainty test
Must be able to identify the class of beneficiaries
OT Computers Ltd v First National Tricity Finance Ltd [2003]- ‘urgent suppliers’ ruled too
conceptually uncertain as it is ‘not sufficient to be able to say whether or not any
identified person is or is not a member of the class entitled to be considered: the purpose
of the trust in the present case is to vest an immediate interest in the suppliers in
question’
(3) Evidential certainty test
Must be evidence available to show certain persons can be identified as being members of a
class of beneficiaries or potential beneficiaries
Re Sayer [1957]- trust for employees and ex-employees not valid as it was not possible to draw
up a complete list as some records had been lost in a fire
Named individual may not be sufficient (thereby requiring further evidence) if there is more than
one known of the same name (eg. John Smith example in Re Gulbenkian’s Settlement [1970])
(4) Ascertainability
Distinguishable from evidential certainty (is or is not member of a class) as concerns the
existence/whereabouts of someone in the class
However, for a fixed trust, the suggestion is that it does not matter if the location of particular
beneficiaries (who are evidentially certain) cannot be established
Court may delay distribution or issue a ‘Benjamin Order’ (Re Benjamin [1902]) under
which the court authorises trustees to distribute to ascertained beneficiaries but require
a legal undertaking to repay money to the beneficiary if he reappears
(5) Administrative workability
No evidence in case law that this is a relevant consideration as the complete list test means that
it is not possible to be concerned about the size of the class
(7) Capriciousness
No case law suggesting this may invalid a fixed trust
Affirmed by Virgo that it does not really matter if there is a rational connection
Burrough-type discretionary trusts (often smaller and for family members)
(1) Complete list test
Requires that a list can be compiled of all beneficiaries at the time the property is to be
distributed (Burrough v Philcox [1840] and Broadway Cottages [1955])
(2) Conceptual certainty test
McPhail v Doulton [1971] emphasised the importance of certainty of objects in that
‘A trust should be upheld if there is sufficient practical certainty in its definition for it to be
carried out, if necessary, with the administrative assistance of the court’
There are six aspects of certainty
(1) ‘Essential test’- the key test for determining certainty of objects (eg. a' complete list’) must be
drawn up (fixed trusts/Burrough discretionary trusts) or it must be possible to say of ‘any given
individual’ that they fall in or outside the class (‘is or is not’ test)
(2) ‘Conceptual certainty’- refers to the precision of language used by the settlor to define the class
of person whom he intends to benefit
(3) ‘Evidential certainty’- refers to the extent to which the evidence available in a particular case
enables specific persons to be identified as members of those classes, as so as beneficiaries or
potential beneficiaries
(4) ‘Ascertainability’- refers to the extent to which ‘the whereabouts or continued existence’ of
persons identified as beneficiaries or potential beneficiaries can be ascertained
(5) ‘Administrative workability’- refers to the extent to which it is practicable for trustees to
discharge the duties laid upon them by the settlor towards beneficiaries or potential
beneficiaries
(6) ‘Capriciousness’- refers to whether there is a rational intention between settlor/testator and the
class of objects (very an issue on the facts)
Exam
Identify the device: is it a fixed trust, discretionary trust Burrough type, discretionary trust Baden
type or power?
Apply the appropriate test of certainty for that device as determined by case law. Two aspects:
(1) “essential test” e.g. complete list/any given individual etc; (2) conceptual/evidential certainty
etc.
If the device fails for uncertainty: consider means of avoiding/curing the uncertainty (e.g. third
party appointed to determine?
Fixed trusts
(1) Essential test (‘complete list’, as derived from IRC v Broadway Cottages Trust [1955])
, Settlor directed £80,000 to be held on trusts to apply the income for, among other things, the
benefit of all or any members of a wide class of beneficiaries, inc. Broadway Cottages Trust
Trust for distribution of income void for uncertainty as it was impossible at any given time to
obtain a complete list of all the beneficiaries
‘A trust for such members of a given class as the trustee shall select is void for uncertainty
unless the whole range of objects eligible for selection is ascertained or capable of
ascertainment’ (Re Ogden [1933])
However, a complete list is not required at the point of creation, only at the point of distribution
(eg. can have trust for A’s grandchildren, including those not yet born, even though their names
cannot be listed when trust created)
(2) Conceptual certainty test
Must be able to identify the class of beneficiaries
OT Computers Ltd v First National Tricity Finance Ltd [2003]- ‘urgent suppliers’ ruled too
conceptually uncertain as it is ‘not sufficient to be able to say whether or not any
identified person is or is not a member of the class entitled to be considered: the purpose
of the trust in the present case is to vest an immediate interest in the suppliers in
question’
(3) Evidential certainty test
Must be evidence available to show certain persons can be identified as being members of a
class of beneficiaries or potential beneficiaries
Re Sayer [1957]- trust for employees and ex-employees not valid as it was not possible to draw
up a complete list as some records had been lost in a fire
Named individual may not be sufficient (thereby requiring further evidence) if there is more than
one known of the same name (eg. John Smith example in Re Gulbenkian’s Settlement [1970])
(4) Ascertainability
Distinguishable from evidential certainty (is or is not member of a class) as concerns the
existence/whereabouts of someone in the class
However, for a fixed trust, the suggestion is that it does not matter if the location of particular
beneficiaries (who are evidentially certain) cannot be established
Court may delay distribution or issue a ‘Benjamin Order’ (Re Benjamin [1902]) under
which the court authorises trustees to distribute to ascertained beneficiaries but require
a legal undertaking to repay money to the beneficiary if he reappears
(5) Administrative workability
No evidence in case law that this is a relevant consideration as the complete list test means that
it is not possible to be concerned about the size of the class
(7) Capriciousness
No case law suggesting this may invalid a fixed trust
Affirmed by Virgo that it does not really matter if there is a rational connection
Burrough-type discretionary trusts (often smaller and for family members)
(1) Complete list test
Requires that a list can be compiled of all beneficiaries at the time the property is to be
distributed (Burrough v Philcox [1840] and Broadway Cottages [1955])
(2) Conceptual certainty test
