13 terms

Equity - three certainties case law

Jones v Lock (CA 1865)
CERTAINTY OF INTENTION: WM gave his baby a cheque made out to WM himself. Jones had told his solicitor that he wanted to alter his will to provide for his baby son. He died before he could do so. Held: Handing the baby the cheque was symbolic only. There was insufficient certainty of intention from WM to create a trust or a gift.
Adams v Kensington Vestry (HL 1884)
CERTAINTY OF INTENTION: Will-maker said "I give, devise and bequeath all my real and personal estate...to my dear wife Harriet...in full confidence that she will do what is right". Held: Will created an absolute gift to wife, not a trust. Cotton LJ: precatory words not enought to make a trust - must look at whole will to find the will-maker's intention. PRINCIPLE: PRECATORY WORDS NOT ENOUGH - GLOBAL APPROACH NEEDED TO FIND WILL-MAKER'S INTENTION TO CREATE A TRUST.
Re Kayford (1975 CA)
CERTAINTY OF INTENTION: A mail order business, was having difficulties. Its accountants advised it to create an account for customers' monies which had been paid in advance and to call it "Customers' Trust Deposit Account". Company instead used an old account with a different name for this purpose. They later went into voluntary liquidation. Was the account a valid trust? Held: Although accountants' advice not strictly followed, there was a clear intention to create a trust. PRINCIPLE: per Megarry J: "It is well settled that a trust can be created without using the words 'trust' or 'confidence' or the like". IF SUFFICIENT INTENTION TO CREATE A TRUST IS MANIFESTED, A TRUST WILL BE FOUND.
"It is well settled that a trust can be created without using the words 'trust' or 'confidence' or the like."
Re Kayford per Megarry J
Belton v CIR (1959 NZCA)
CERTAINTY OF INTENTION: The IRD tried to sting settlor for income tax but he claimed that he was merely a trustee for his son under a trust. His conduct was as follows: settlor had bought sheep in his son's name, and all proceeds of the sale were credited to his son. He also had a safe deposit box in his son's name and kept his son's sheep separate from his own. He bought his son a piano out of the fund. Held: Although there were no specific words declaring a trust, one could be inferred from settlor's conduct. PRINCIPLE: A TRUST DOES NOT NEED SPECIFIC WORDS TO BE CREATED. IT CAN BE INFERRED FROM CONDUCT.
Paul v Constance (1977 UKCA)
CERTAINTY OF INTENTION: WM had entered into a new relationship with Ms P. They lived together but didn't get married. WM received damages from a work injury, and the couple decided to put it into a bank account. At the interview with the bank manager, it came out that they weren't married, and manager created an account in WM's name only. Shared bingo winnings were deposited, and only one withdrawal was made for both their benefit. When WM died intestate, the estranged wife tried to claim it was part of the estate and should go to her. Held: The conduct of WM and Ms Paul was sufficient evidence to infer the intention to create a trust for WM and Ms P jointly. PRINCIPLE: A TRUST CAN BE INFERRED FROM CONDUCT.
White v White (1909 NZCA)
CERTAINTY OF SUBJECT-MATTER - GIFT: Mr White left a bequest saying "Mary [is] to have a small portion of what left". Held: the bequest to Mary was void for uncertainty. There was no identifiable property to which the clearly intended trust could attach.
Sprange v Barnard (1789 HL)
CERTAINTY OF SUBJECT-MATTER - GIFT: Will-maker left money to her husband Sprange "for his sole use and at his death, the remaining part of what is left...is to be divided [between her siblings]". The siblings argued that Sprange couldn't take all of it. Held: The trust failed for lack of certainty of trust property. The wording of the will was too vague. There was no identifiable property. Therefore, the money went to Sprange as an outright gift.
Boyce v Boyce (1849 UK)
CERTAINTY OF SUBJECT-MATTER - GIFT: WM left two houses on trust to be gifted by the trustee to his daughters. Maria was to have first choice, and then the other one could be conveyed to Charlotte. Maria died before the will-maker and never chose. What could be given to Charlotte? Held: Without Maria's choice, there could be no certainty about the property which was the subject of the gift in favour of Charlotte. The gift failed because of lack of certainty as to subject-matter.
Re Golay's Will Trusts (1965 UKCA)
CERTAINTY OF SUBJECT-MATTER - GIFT: Will-maker's will directed his executors to gift a "reasonable income" from his properties to a friend. Was 'reasonable income' too vague to perfect the gift? The Court said that, as no-one had been specified to quantify what a reasonable income was, an objective yardstick was needed to determine the will-makers intention. Held: The Court could use an objective yardstick to determine what 'reasonable income' meant. The gift did not fail for uncertainty.
Re Gulbenkian's Settlement Trusts (1970 HL)
CERTAINTY OF OBJECT: The will created a mere power but the class of potential beneficiaries was vague. Lord Upjohn stated the 'Is or Is Not' test for validity of mere powers was the appropriate test.
McPhail v Doulton (1971 HL)
CERTAINTY OF OBJECT: A trust fund was created for the benefit of staff at a company called Bertram Baden Ltd. If the trust failed, it fell into residue. Lord Wilberforce said that the distinction between trust powers (discretionary trusts) and mere powers was often artificial. He also considered the appropriate test for the validity of trust powers and adopted the Gulbenkian test for the validity of mere powers as the correct test. He also noted that a class may be so large as to be "administratively unworkable" - he gave the example of "all the residents of greater London".
Re Baden's Trust Deed (1973 CA)
CERTAINTY OF OBJECT: CA applied the Is or Is Not test for validity of trust powers to McPhail. Sachs LJ discussed the difference between 'conceputal certainty' and 'evidential certainty'. If the class is conceptual certain then whether someone is or is not in it was a matter of evidence. Just because a person can't be proven to be in or out of the class, the trust power won't fail for uncertainty. Megaw LJ agreed. Stamp LJ dissented: you had to be able to say with certainty of any individual that they were in or out. Held: trust created.