⇒ Certainty of objects: beneficiaries of a trust must be certain, otherwise the trust is void
⇒ Trusts must be enforceable, so there must be someone who can enforce the trust (unless it is a charitable trust, where the Attorney-General can bring an action)
⇒ Morice v Bishop of Durham (1804) → “There can be no trust over the exercise of which this court will not assume a control”
⇒ By the principle established in Saunders v Vautier, in the case of a bare trust or a fixed trust, the beneficiaries, acting together, can direct the trustees to transfer the trust property to them. This means that they have proprietary rights, as opposed to rights in personam against the trustees.
⇒ Where a trust is discretionary and exhaustive – i.e. where the trustees have to use all the trust property for the benefit of a fixed class of individuals (in other words, an exhaustive discretionary trust is a trust where trustees must allocate all the property and cannot retain any of it) - then those individuals, if all of them act together, may invoke the Saunders v Vautier principle
⇒ The beneficiaries of a trust may be identified in four ways:
⇒ If the trust names the individuals (i.e. the first one) there is no issue: a valid private trust will take effect as there is no uncertainty of objects
⇒ The fourth option (i.e. a class of people) would only really take effect as a charitable trust for the benefit of the public or section thereof
⇒ The 2nd and 3rd class are therefore the issue
⇒ The test to be applied to determine certainty of objects depends upon the nature of the trust:
⇒ A fixed trust is a trust that requires property be held for a fixed number of beneficiaries
⇒ Where there is a fixed trust they must be able to say, with certainty, who the beneficiaries are. This is the 'list' test (or Ascertainability test): it must be possible to construct a definitive list of who all the beneficiaries are e.g. with a fixed trust for students at Oxford university you would have to compile a list of who all the beneficiaries are
⇒ IRC v Broadway Cottages : the trust in this case failed because they could not identify the list of beneficiaries (Jenkins LJ)
⇒ Re Gulbenkian’s Settlement : House of Lords confirmed the list test
⇒ With a discretionary trust, trustees have the discretion to decide how trust property is to be divided, but no power not to divide it (i.e. they are obliged to exercise the discretion)
⇒ The test for certainty of objects in respect of discretionary trusts is the ‘is or is not’ test
⇒ In McPhail v Doulton  it was said that with a discretionary trust the trustees must exercise their discretion i.e. they must distribute/divide the property property and exercise their discretion. With a power, the trustees may exercise their power i.e. the trustees have a discretion as to whether they want to divide the property when they merely have a power: there is no obligation to do so
⇒ In Re Ogden  - which is the old law - a trustee had discretion to divide money to certain political organisations. The Court, applying the old law, used the list test; the trustee therefore compiled a list (although probably impossible in the circumstance), so the court held the trust to be valid
⇒ In McPhail v Doulton  a trust was made in favour of “employees or ex-employees of the Company or any of their relatives”. The House of Lords adopted Re Gulbenkian test i.e. the ‘is or is not’ test is used to determine whether or not a trust fails for uncertainty of objects
⇒ Re Gulbenkian’s Settlement : Lord Wilberforce said a power simply gives the holder the ability to exercise that power without any obligation to do so
⇒ The case established a test which we shall refer to as the ‘is or is not’ test, which means that the trustees must be able to decide whether any hypothetical beneficiary is or is not within the class of objects
⇒ Despite the is or is not test allowing there to be a more flexible pool of beneficiaries, there are some uncertainties which mean that the discretion/power will be void:
FOOL-PROOF methods of obtaining top grades
SECRETS your professors won't tell you and your peers don't know
INSIDER TIPS and tricks so you can spend less time studying and land the perfect job
We work really hard to provide you with incredible law notes for free...
The proceeds of this eBook helps us to run the site and keep the service FREE!
⇒ Uncertainty may be conceptual – what is a ‘young person’ – or evidential – who was an employee of a company at a certain date. In general, a trust in which there is conceptual uncertainty is more likely to fail than a trust in which there is evidential uncertainty.
⇒ The situation that is caught by this form of uncertainty is where the meanings of the words used in the trust are unclear/vague (Re Sayer 1957)
⇒ So words will be conceptually uncertain if the exact meaning of the definition used contains any linguistic or semantic uncertainty, if in other words it is impossible to say what the words in question actually mean e.g. “friends of settlor” / “pure-Englishman” / “good customers” / “young person”
⇒ So, if it is be impossible to be certain of the concept, the trust fails (Re Baden No 2)
⇒ Evidential uncertainty refers not to the meaning of the words involved, but rather to the question of whether or not the claimant can prove that she falls within the class of beneficiaries i.e. it is impossible to prove as a question of fact whether or not a beneficiary falls within a class
⇒ Generally, trust wont fail for evidential uncertainty (Mr Vinelott in Re Baden (No2)), but will usually fail for conceptual uncertainty
⇒ See the case of Re Baden’s Deed Trusts (No 2) 
⇒ I.e. The definition of beneficiaries is so hopelessly wide as not to form "anything like a class" so that the trust is administratively unworkable (Morice v. Bishop of Durham).
⇒ Lord Wilberforce gave example of an administratively unworkable trust as one for “all residents of Greater London” but not one for “relatives” - McPhail v Doulton 
⇒ In R v District Auditor, ex parte West Yorkshire Met CC (1985) a trust for West Yorkshire was held to be administratively unworkable, so the power was consequently void
Gifts and Trusts for the benefit of a community:
⇒ Although gifts to a wide range of people can fail for administrative unworkability, a gift to the community will be validated as a good trust
⇒ Re Smith : testamentary gift to “my country England” upheld as a charitable gift
⇒ Re Harding : an express trust for the black community of certain areas upheld as a charitable gift too.
⇒ A potential 4th certainty is certainty of conditions
⇒ Sometimes there are conditions placed on the ability to benefit from a trust. However, such a trust will not automatically fail for uncertainty of condition
⇒ Condition precedent: a condition which must be met in order to benefit from trust
⇒ Condition subsequent: condition which applies after the beneficiary has received a benefit and which will, if met, end or vary the trust
⇒ Both must be certain. However, conditions subsequent may be ‘conditions of defeasance’ e.g. a trust providing a benefit until a condition is met (such as a beneficiary divorcing) have the effect of withdrawing financial support from a beneficiary
⇒ See the case of Clayton v Ramsden 
⇒ In Re Tuck's Settlement Trusts  the meaning of Jewish faith could be resolved by reference to Jewish law: so the uncertainty in this case was resolved by reference to extrinsic evidence
⇒ In In Re Tepper’s Will Trusts  the trust was in favour of the children, as long as they did not marry outside the Jewish faith. The House of Lords held the ratio in Clayton v Ramsden  had not said ‘Jewish faith’ was too uncertain and they compiled external evidence, in line with Re Tuck's Settlement Trusts  to determine what the settlor had meant by ‘Jewish faith’
⇒ In Marley v Rawlings  Lord Neuberger said that when construing contracts' ‘subjective evidence of any party’s intention’ is not to be taken into account and, subject to the Administration of Justice Act 1982, the same rule applies to wills
⇒ For gifts made by a will (i.e. bequests which are not held in trust), then the gift will not fail if it is possible to say that a person might meet the condition, notwithstanding that it might be impossible to say in the case of other people.
⇒ In Re Allen; Faith v Allen : Property was left to the eldest son who was a member of the Church of England. It was held that if it was possible to say a person met the condition by any definition then the gift would not fail (if this was a trust it would have failed for uncertainty)
⇒ Re Barlow's Will Trusts : ‘friends’ could apply to the executor to buy one of the testator’s paintings at a good price. If this was a trust ‘friends’ would be conceptually uncertain and thus void. As this was construed as a gift, as long as a person could show by any definition they were a friend they would be able to buy a painting at good price
⇒ A testamentary gift is ‘adeemed’ if the property has been disposed of by the testator prior to his or her death: Re Slater 
Learn how to effortlessly land vacation schemes, training contracts, and pupillages by making your law applications awesome. This eBook is constructed by lawyers and recruiters from the world's leading law firms and barristers' chambers.
✅ 60+ page eBook
✅ Research Methods, Success Secrets, Tips, Tricks, and more!
✅ Help keep Digestible Notes FREE