Soton Equity and Trusts - alastairhudson.com

Topic 2. CERTAINTY OF OBJECTS
Reading: Hudson, section 3.5; Martin 107-121; Pettit 50-
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Question: how certain must the words used by the settlor be in creating a trust, and in what
way will the court measure sufficient certainty?
Commentary:
C.T. Emery, (1982) 98 L.Q.R. 551
J.A. Hopkins, (1971) 29 C.L.J. 68
Y. Grbich, (1974) 37 M.L.R. 643.
Introduction: the central principle
Reading: Hudson, section 3.5.1
Morice v. Bishop of Durham (1804) 9 Ves. Jr. 399 (affd. (1805) 10 Ves. Jr. 522):
there must be some person in whose favour the court can decree performance.
The need for the court to be able to police the trustees’ management of the trust
If the court cannot know with certainty, how can the trustees know and how can
the court police the trustees?
**Re Hay's Settlement Trusts [1982] 1 W.L.R. 202: for the most useful summary of
these principles and of the various forms of power.
1) Distinguishing between types of power and of trust
The distinction between “powers” and “trusts”:
Fixed trusts and bare trusts obligations
Discretionary trusts, (once known as “powers in the nature of a trust”)
Fiduciary powers: powers of appointment and powers of advancement (known
as “mere powers” because they are merely powers and not trusts)
Personal, non-fiduciary powers
Cf. The nature of beneficial entitlements (cf. mere powers) in general and
of corresponding trustees’ duties.
Burrough v. Philcox (1840) 5 My. & Cr. 72.
*Re Hay's Settlement Trusts [1982] 1 W.L.R. 202
2) Certainty rules for fixed trusts (e. g. fixed shares within a class).
Reading: Hudson, section 3.5.2
*I.R.C. v. Broadway Cottages Trust [1955] Ch. 20.
A complete list of the beneficiaries must be possible.
Both conceptual and evidential certainty required.
3) Certainty rules for fiduciary “mere powers”, e.g. powers of appointment.
Reading: Hudson, section 3.5.3
Re Gestetner Settlement [1953] Ch. 673 (the old, strict approach).
**Re Gulbenkian's Settlement [1970] A.C. 508: the “any given postulant test”; aka the “is
or is not test”. NB: note uncertainty pre-McPhail v Doulton as to which test the court is said to be
advancing here.
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