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Express private trusts (1.3) - Coggle Diagram
Express private trusts (1.3)
Certainty
Certainty of objects
They are essentially the beneficiaries or potential beneficiaries
We must know with sufficient certainty who the objects are for the trustee (or if they default, the court) to perform the trust according to settlor's intentions
Court's approach is to give terms meaning where possible to uphold the settlor's intention:
Re Gulbenkian [1970]:
Per Lord Upjohn: '... very frequently... the draftsman has used words wrongly, his sentences border on the illiterate and his grammar may be appalling. It is then the duty of the court by the exercise of its judicial knowledge and experience in the relevant matter, innate common sense and desire to make sense of the settlers or parties' expressed intentions, however obscure and ambiguous the language that may have been used, to give a reasonable meaning to that language if it can do so without complete violence to it'
Types of uncertainty
Conceptual certainty
(sometimes called semantic or linguistic certainty) - do we understand the description of the objects?
'The residue of my estate to be divided between my intelligent daughters in any way my executors see fit'
Daughters is certain, but intelligent is ambiguous, so there's conceptual uncertainty (we cannot sever the certain from the uncertain - Re Wright's Will Trusts [1981]
Evidential certainty - can we prove whether someone is an object?
£1 million to be divided in equal shares between the current members of the Freemasons
This is a secret organisation - if there are no membership records, could we prove whether someone's a member?
Ascertainability - can we find/locate the object?
£10,000 to be divided in equal shares between my children'. If one of the children is a missing person, they would be unascertainable
Size of class - is the size of the class so big as to be administratively unworkable?
Compare - £5 million to be divided in any way my trustees see fit between residents of Cardiff - around 360,000 objects; £1 million for my trustees to distribute in such shares as they think fit amongst the people of the UK - around 67 million objects
Capriciousness - does the settlor have a sensible reason to benefit these particular people? Is it too random?
£100,000 to my trustees who may, if they think fit, appoint all or part of this Game of Thrones fan club'. Is there a connection?
Fixed trust
With an
individual
disposition:
Disposition provides for an individual beneficiary (individual disposition) or for individual beneficiaries (series individual dispositions), so
each beneficiary's entitlement is independent,
so we need to perform the
one person test
- Re Barlow's Will Trusts [1979]
Burden of proof is on the individual to prove that they are entitled to benefit, so evidential certainty is irrelevant; ascertainability is irrelevant (IF that one object can be found) and size of the class is irrelevant
Conceptual certainty probably is relevant despite Lord Denning
s comments to the contrary in Re-Tuck's Settlement Trust [1978]
No authority on whether capriciousness is relevant, but Virgo thinks that capriciousness could invalidity
With an
class
disposition
Discretionary trusts
The trustees must distribute the property among a named group of objects but does not state
how
the property is to be divided. The test is the 'is or is not test' - McPhail v Doulton [1971]
Conceptual certainty is necessary - Re Baden's Deed Trusts No.2) [1973]
Unclear whether evidential certainty is needed - see the different judgements in Re Baden (No.2): Stamp LJ - evidential certainty is necessary; Megaw LJ - some evidential necessary; Sachs LJ - no need for evidential certainty
Ascertainability - not relevant for discretionary trusts
Size of the class is relevant - R v District Auditor, ex p West Yorkshire Metropolitan County Council [1986]
Capriciousness - can invalidate a discretionary trust according to obiter comments in R v District Auditor
Powers of appointment
A power to choose to appoint/give/distribute property to or among objects - we must perform the 'is or is not' test Re Gulbenkian's Settlements [1970]
Conceptual certainty is necessary
Evidential certainty less clear - same as for discretionary trusts
Ascertainability and size of the class are never relevant for powers
Capriciousness may invalidate a power - see Re Manisty's Settlement [1974]
Resolving uncertainty
Resolving conceptual uncertainty
Trustees cannot resolve conceptual uncertainty - Re Wright's Will Trusts [1981]
3rd parties appointed by the settlor/testator may be able to resolve conceptual uncertainty
Lord Denning - conceptual uncertainty can be resolved by 3rd parties
Everleigh LJ - 3rd party not being used to resolve conceptual uncertainty, rather the 3rd party's opinion forms part of the definition of the class
Resolving evidential uncertainty:
Evidential uncertainty can be resolved by trustees (Re Coxen [1948]) or by appointed 3rd parties (Re Tuck's [1978]