EQUITY AND TRUSTS: THE THREE CERTAINTIES
A trust must be certain in order to be valid and enforceable.
There must be certainty of:
1. Words or intention
Established in
2. Subject matter/property
3. Objects/beneficiaries Knight v Knight
Failure to comply with certainty requirements can render the disposition void – if one is
absent, the whole trust fails.
Where the trustees fail to enforce a trust, the courts can only enforce it if the three
certainties have been complied with.
1. Certainty of Words or Intention
The settlor must show a clear intention to create a trust.
A court will construe the words used in order to find the settlor’s intention.
Equity maxim:
“Equity looks to the intent rather than the form”
The word ‘trust’ or other technical language is not necessary.
Re Kayford
Megarry J said that it is a question of ‘whether in substance a sufficient intention
to create a trust has been manifested.’
Imperative words: will create a trust – shows intention to create a legally binding
obligation.
Precatory words: express a hope – such words do not show intention to create a legally
binding obligation therefore no trust is created.
Although earlier cases showed a preference to finding a trust on the basis of precatory
words, more modern cases lean against finding a trust in such circumstances.
Lamb v Eames = turning point
Widow left property ‘to be at her disposal in any way she may think best’ precatory
language = no trust, widow had absolute entitlement to the property.
Re Adams & Kensington Construction of words and
circumstances – must
Language = precatory. No
consider the context of the
obligation, no trust.
will as a whole to
determine the testator’s
intention.
Comsikey v Bowring-Hanbury
Language = imperative. Where words are not held
Shows intention to create to impose a trust on the
legally binding obligations donee, they have absolute
therefore a trust is created. entitlement to the
property. 1
A trust must be certain in order to be valid and enforceable.
There must be certainty of:
1. Words or intention
Established in
2. Subject matter/property
3. Objects/beneficiaries Knight v Knight
Failure to comply with certainty requirements can render the disposition void – if one is
absent, the whole trust fails.
Where the trustees fail to enforce a trust, the courts can only enforce it if the three
certainties have been complied with.
1. Certainty of Words or Intention
The settlor must show a clear intention to create a trust.
A court will construe the words used in order to find the settlor’s intention.
Equity maxim:
“Equity looks to the intent rather than the form”
The word ‘trust’ or other technical language is not necessary.
Re Kayford
Megarry J said that it is a question of ‘whether in substance a sufficient intention
to create a trust has been manifested.’
Imperative words: will create a trust – shows intention to create a legally binding
obligation.
Precatory words: express a hope – such words do not show intention to create a legally
binding obligation therefore no trust is created.
Although earlier cases showed a preference to finding a trust on the basis of precatory
words, more modern cases lean against finding a trust in such circumstances.
Lamb v Eames = turning point
Widow left property ‘to be at her disposal in any way she may think best’ precatory
language = no trust, widow had absolute entitlement to the property.
Re Adams & Kensington Construction of words and
circumstances – must
Language = precatory. No
consider the context of the
obligation, no trust.
will as a whole to
determine the testator’s
intention.
Comsikey v Bowring-Hanbury
Language = imperative. Where words are not held
Shows intention to create to impose a trust on the
legally binding obligations donee, they have absolute
therefore a trust is created. entitlement to the
property. 1
