3 certainties + HST FLOW
This question involves whether settlor’s intention regarding (i) the subject matter of
paintings and (ii) object of ‘former girlfriends’ can be valid. Lord Langdale in Knight v Knight
identified three certainties of trust that have to be satisfied to make a private express trust
valid.
i) Certainty of intention (fail = gift to donee (A) e.g. 10k for A to hold 5k for B)
- Whether there is certainty of intention to create a trust or just a request which the
trustee may choose to comply with or ignore as he wishes.
- Administration of Justice Act 1982, s.21: Extrinsic evidence, including evidence of the
T’s intention, may be admitted to assist in the interpretation of a will.
- Lindley LJ in Re Hamilton said the courts must look at all the words used by the
settlor to see if a trust was intended, as equity looks to the intent rather than to the
form. (precatory words are irrelevant today)
Precatory word:
- The use of ‘confidence’ may not indicate a trust as in Re Adams where a settlor left
property to his wife ‘in full confidence’ was held invalid to be a trust but more likely
to be gift with a motive instead.
‘hold
- However, it is vital to look at the gift as a whole and here the word ‘hold’ is used
which could indicate a trust. Per Halsbury LC, the significant phrase of ‘I hereby
direct’ in Comiskey v Bowring-Hanbury can be compared to ‘hold’ in this case, as the
language is clearly intended to create a binding obligation.
- c/f this can be contrasted with Suggitt v Suggitt where the words used were ‘I
express the wish (without imposing a trust)’. It was quite clear looking at all the
words, that no trust was intended.
‘trustee’
- Obviously satisfies the test of certainty of intention as the word ‘trustees’ is used.
Trust or Power?
- If a document provides for a gift in absence of a selection then it creates a mere
power under Re Hay's Settlement Trust. A mere absence of a gift over in default will
create a discretionary trust. The court must look to whether there is an intention to
benefit, or it will be a mere power, under Burrough v Philcox.
- Since the trusts fails for uncertainty of intention, trustee will take it as a gift.
ii) Certainty of subject matter (fail = resulting trust)
- OTF, the statement in S’s will in identifying his intention to transfer the paintings
(subjects) to his sister (beneficiary) through trustees is sufficiently clear, hence
certainty of intention and object do not seem to be problematic. However, although
the subject of the will has been stated, but they have not been identified.
- Property must be identifiable
This question involves whether settlor’s intention regarding (i) the subject matter of
paintings and (ii) object of ‘former girlfriends’ can be valid. Lord Langdale in Knight v Knight
identified three certainties of trust that have to be satisfied to make a private express trust
valid.
i) Certainty of intention (fail = gift to donee (A) e.g. 10k for A to hold 5k for B)
- Whether there is certainty of intention to create a trust or just a request which the
trustee may choose to comply with or ignore as he wishes.
- Administration of Justice Act 1982, s.21: Extrinsic evidence, including evidence of the
T’s intention, may be admitted to assist in the interpretation of a will.
- Lindley LJ in Re Hamilton said the courts must look at all the words used by the
settlor to see if a trust was intended, as equity looks to the intent rather than to the
form. (precatory words are irrelevant today)
Precatory word:
- The use of ‘confidence’ may not indicate a trust as in Re Adams where a settlor left
property to his wife ‘in full confidence’ was held invalid to be a trust but more likely
to be gift with a motive instead.
‘hold
- However, it is vital to look at the gift as a whole and here the word ‘hold’ is used
which could indicate a trust. Per Halsbury LC, the significant phrase of ‘I hereby
direct’ in Comiskey v Bowring-Hanbury can be compared to ‘hold’ in this case, as the
language is clearly intended to create a binding obligation.
- c/f this can be contrasted with Suggitt v Suggitt where the words used were ‘I
express the wish (without imposing a trust)’. It was quite clear looking at all the
words, that no trust was intended.
‘trustee’
- Obviously satisfies the test of certainty of intention as the word ‘trustees’ is used.
Trust or Power?
- If a document provides for a gift in absence of a selection then it creates a mere
power under Re Hay's Settlement Trust. A mere absence of a gift over in default will
create a discretionary trust. The court must look to whether there is an intention to
benefit, or it will be a mere power, under Burrough v Philcox.
- Since the trusts fails for uncertainty of intention, trustee will take it as a gift.
ii) Certainty of subject matter (fail = resulting trust)
- OTF, the statement in S’s will in identifying his intention to transfer the paintings
(subjects) to his sister (beneficiary) through trustees is sufficiently clear, hence
certainty of intention and object do not seem to be problematic. However, although
the subject of the will has been stated, but they have not been identified.
- Property must be identifiable
