Facts: The testator left property in trust for his own children for their lifetime and then to their children. However both children died without issue (i.e. the testator’s children didn't have any children to pass the property too). In this event the will gave a power to the testator’s children (the beneficiaries) to decide who should be the remainder beneficiary of the trust → here, the longest liver of his children was given the power to dispose the property to the testator’s nephews and nieces or their children

⇒ In the event, the surviving child did not exercise the power to dispose of the property.

⇒ So the question arose as to whether it was the intention of the settlor that the property was to be held on trust for the nephews and nieces or grand nephews and nieces OR was it a mere power that the children COULD give to the nephews and nieces or their grand nephews and nieces?

Held: The Court held that the intention of the testator to benefit his nephews and nieces or their children was not merely a power of appointment, but an intention to favour them (i.e. make a trust in their favour)

• So the court gave effect to that trust on the basis that equality is equity by dividing the property equally between the nephews and nieces and their children
• So although the trust failed in that the children didn't dispose of the property using their power, the court was still able to ensure there was a trust in favour of the nephews and nieces and their children
• As Lord Cottenham LC said, on a true construction of the intention of the settlor, it was possible to see he had wanted to provide for his nephews and nieces on the default of the children in exercising their power of appointment → so the court could divide the property equally between the nephews and nieces and their children

Facts: The testator left property to his wife "in full confidence... she will devise it to one or more of my nieces as she may think fit".

Held: This appeared to be merely a moral obligation on the wife; however, the House of Lords held (by a majority) that a trust had been created

• This is because the entire instrument must be construed (you must look at the whole document, and not just the phrase in isolation) → later words indicted that it was the intention of the settlor that a legally enforceable trust should be created and not just a moral obligation
• So a trust was created because, having expressed that the property would be dealt with in full confidence (and thus looking like a moral obligation), the settlor went on to say that he directs that the property should be held on trust → so this showed there was not just a moral obligation

Facts: This case involved two famous boxing promoters; Don King was the leading boxing promoter in the USA and Frank Warren was the leading boxing promoter and manager in Europe. They formed a partnership agreement whereby they, and the companies which they controlled, agreed to exploit agreements with boxers in Europe for their mutual advantage. Under the partnership agreement each partner was entitled to hold the benefit of any existing or future management agreement for the benefit of the partnership. Subsequently, one or more of the partners attempted to terminate the partnership agreement and sought to argue that certain management agreements did not fall to be included in the partnership property. The question arose whether the partners held the benefit of their management agreements on trust for the partnership

Held: The partnership agreements were found, on their true construction, to show an intention that the management contracts were held on trust for the benefit of the partnership.

Facts: A father returned from a business trip and he was scolded for not bringing back a present for his infant son. In a rage he wrote a cheque out in favour of him as payee and thrust the cheque into the baby’s hand. AN issue arose as to whether a trust was created over the cheque for the benefit of the baby

Held: There was nothing to indicate an intention to create a trust over the cheque → rather the father’s intention was to make a gift or simply make a point to his wife

Facts: In this case words were said that property was "to be at her disposal in any way she may think best, for the benefit of herself and her family"

Held: This was held not to create a trust as the words are clearly precatory (there is no clear intention to create a trust)

• To create a valid trust you “must shew a clear intention” to do so (Sir Malins VC)

Facts: Mr Wyatt created express trust of family home, making himself trustee for his wife and children. However, he did not tell the beneficiaries, and continued to use the property as his own.

Held: It was held that the purported trust was a sham, intended to place his property beyond the reach of his secured creditors, and that the trust was void.

Facts: Mr Constance left his wife to live with his mistress, Mrs Paul. Constance received a court award of £950 for an injury suffered at work, subsequently to which Constance and Paul decided to set up a joint bank account. After visiting the bank, they were advised that the account should be set up in the name of Constance alone because the couple were not married: therefore, Constance was the common law owner of the account

⇒ The £950 lump sum was paid into the account and formed bulk of the money held in it. The couple also added joint bingo winnings to the account, and used some for the money to pay for a joint holiday. Importantly, evidence was also adduced at trial that Constance had said to Paul “this money is as much yours as mine”

⇒ Constance died, and his wife sought to claim that the bank account belonged entirely to her deceased husband and that it therefore passed to her as his widow under the Intestacy rules. Mrs Paul, However, argued that the money was held on trust by Constance, as legal owner of the bank account, for both Constance and Paul as beneficiaries; therefore, she argued, the bank account should pass to her as sole surviving beneficiary

Held: Constance had declared a trust over the money in the bank account → the reasoning was that the words “the money is as much yours as mine” manifested sufficient intention that Constance would hold the property on trust for them both

• Furthermore, that the couple had treated the money in the account as joint money was taken to be evidence of the intention to create a trust

Facts: A testator left property to his wife (W) by will “in full confidence that she would do what was right by his children”.

Held: It was held that the property passed to W absolutely and no trust had been created

• The court interpreted the statement to have added only a moral obligation on the wife to use the money in a way which would benefit the children and not to place her under an obligation to hold that money as trustee for the children

Facts: The testator made a homemade will and he said: “The bungalow I leave in trust for my wife. On her death the Bungalow is to be sold and cash raised is to be equally divided between my children.” → this created a trust and not an absolute gift for his wife as he used the words “in trust”

⇒ After his signature he added: 'No doubt if mum runs into money problems you can sort something out. Like selling the bungalow'.

⇒ On her death, the widow left her property in unequal shares to three of her children. This was in contrast to what she had been directed to do by the will

⇒ The Defendant said the first part (i.e. the bequest to the wife) was a gift, therefore any conditions about leaving it equally to the children were not binding on her

• However, if you look at the wording this is clearly a hopeless claim as the testator clearly states in his will that the property was to be left “in trust for [his] wife”

Held: The court held that the wording of the bequest created an express trust, not a gift with a provision for the remainder, so s.22 of the Administration of Justice Act 1982 did not apply.

• So the court found a trust whereby the wife would have the property during her lifetime then it would be given to her children in equal shares when she died

Facts: A mail order company used to receive money from customers buying items from their catalogues before those items were sent to the customers; the customers therefore bore the risk that they had paid their money but that they might not receive the items for which they had paid. The mail order company realised that it was in danger of insolvency and therefore segregated all of its customers prepayments into a distinct bank account. Money was moved from that account only once the item had been sent to the customer. When the company did go into insolvency, the issue arose whether the money belonged to the company (and therefore would be distributed among the company’s creditors) or whether it was held on trust for customers (and therefore could be returned to them)

Held: The company’s intention was to create a trust over the prepayments which had been manifested by transferring those prepayments into a separate bank account so as to shield them from the insolvency

• The company, as legal owner of the bank account, was trustee. The customers were beneficiaries in the period between making a prepayment and receiving their items
• “As for the requisite certainty of words, it is well settled that a trust can be created without using the words 'trust' or 'confidence' or the like: the question is whether in substance a sufficient intention to create a trust has been manifested.” (Megarry J)