Declaration of Trust

Trust can be express or trusts imposed by law.

Express trust means ‘a trust created intentionally by an act of the settlor’ /
trust that is created by settlor.
Trusts imposed by law are of 3 types: resulting trusts, constructive trusts,
and statutory trust.

To create valid express trust, there ought to be 3 elements present:

1) Certainties
2) Formalities
3) Constitution

1) Certainties

((A valid trust deed must demonstrate the intention to set up a trust. And in doing so, defines the trust
property (assets to be placed in trust), appoints trustees, identifies beneficiaries, and specifies terms that the
))
trustees should follow.

(( https://www.netlawman.co.uk/ia/guide-to-trusts ))

First is certainty of trust.

Declaration of trust ought to be certain. This means ‘a settlor must
declare the terms of the trust with sufficient ‘certainty’ or precision for
the trustees to know what they must do’ otherwise intended trust fails.

In certainty, there are 3 aspects which ought to be sufficiently certain for

valid creation of trust: Knight v Knight (1840).
1) Certainty of Intention (( to set up trust))
2) Certainty of Subject Matter and (( defines the trust property ))
3) Certainty of Objects (( identifies beneficiaries ))

1) Certainty of Intention: (( to set up trust))

First aspect is certainty of intention which is a substantive requirement.
Certainty of intention means settlor should have clear intention to make
trust. To create trust, there must be intention to create trust when handing
over property to trustee: Richards v Delbridge (1874).

Where intention of settlor is deduced from document, like trust deed or

will, there is not much complexity.
In Ong v Ping (2017) trust deed was insufficient to find intention. Then
court inferred intention from settlor’s letter to her solicitor.
Words or conduct should oblige trustee to execute trust as asked:
McCormick v Grogan (1867).
<- Moral obligation (i.e. non-legal) is not enforceable.

Intention can be declared by words or conduct.

Complexity exists where there is no document. In such situations, court

will find intention from parties’ spoken words or conduct.
Intention declared by conduct is implied; this means trust can be formed
from parties’ conduct without explicit usage of word ‘trust’ as court will
determine trust from ‘substance and effect of the words’ used:Paul v
Constance (1977).
<- Moffat (2009) criticised Constance. In this case Mr Constance told
claimant that money ‘was as much hers as his’. Moffat argued that court
interpreted words of Constance very generously; there was intention to
benefit, but it was interpreted into intention to create trust. Court blurred
difference between gifts and trust. Lord Scarman argued that it was
difficult to point out trust from words in Constance.
(( Moffat (2009) suggests that the court gave a rather too benevolent construction to Mr
Constance’s words. While there was certainly a general intention to benefit, this ought not
to have translated into a specific intention to create a trust. The case does, Moffat
))
concludes, blur the distinction between trusts and gifts
( Trust can be created impliedly; this means trust can be formed from
conduct or without using word ‘trust’ as court will determine trust from
‘substance and effect of the words’ used:Paul v Constance (1977). )
<- Moreover, in Jones v Lock (1865) court did not establish trust when
father by giving cheque to his baby said: ‘I give this to baby.It is for
himself’. Court argued that it is not trust as father’s statement is one-off;
hence there is no clear intention. Words in Jones were as generic in
Constance but in Constance court made trust. This is because in
Constance there was repeated assurances, not one-off and there was
mutual conduct of parties; conduct spoke louder than words.
Gardner (2011) argued that these cases evince changing social attitudes.

What words then are most appropriate for expressing the intention
to create a trust? :
( +imperative:giving an authoritative command;peremptory
+precatory:in a will expressing a wish or request of the testator )

Words should be imperative, not precatory that express wish or hope:

Wright v Atkyns (1823). If precatory words are used, trust fails because
it is not in accordance with intention to create trust; it does not ‘impose
obligation’ on trustee to carry out trust.
For example, in Lambe v Eames (1871) settlor gave his estate to trustee;
the will stated ‘at her disposal in any way she may think best, for the
benefit of herself and her family’. Court ruled that this is not trust as the
words are precatory and the property is gift. In Mussoorie Bank v
Raynor(1882) settlor gave property to trustee ‘feeling confident that she
will act justly to our children in dividing the same when no longer
required by her’; court ruled that it is not trust but gift as ‘feeling
confident’ does not impose obligation. In Re Adams and Kensington
Vestry (1884) settlor gave his property to trustee; the will stated ‘in full
confidence that she would do what was right by his children’. Court
regarded this not trust.
However , in Comiskey v Bowring-Hanbury (1905) court did not solely
rely on the words but considered them in context.
(( It is to be noted that both the clause in Re Adams and the clause in Comiskey
contained the same phrase, in full confidence. However, the prominence to be
given to such phrases, even though followed in previous cases, was to be
lessened. The most important thing is to determine the context of words used,not
to give inflated importance to particular phrases. ))

To summarize it, equitable maxim states that ‘equity looks at the

intention not at the form’.

Sham Trust:
In Midland v court held that where sham trust is created, there is no
settlor’s intention to create trust as rather it was to defraud creditors.
(( This is a trust based on fraud. In the case of Midland v Wyatt courts held that
there was no trust as the intention was not to make a trust rather to defraud
creditors. ))

Trust is created in Quistclose trusts despite transferror of loan did not

subjectively intend to make trust; where creditor’s loan is used for
purpose that is not intended then the loan is regarded as trust held by
debtor: Twinsectra v Yardley (2002).
<- Quistclose trust sparks interesting debate as why courts establish trust
despite non-existence of subjective intention although mostly parties in
quistclose trusts are well-advised commercial units.
<- Subjective intention is not the criteria fro quistclose trusts but how
recipient of loan ought to use property or loan for purpose for which loan
is taken: Ali v Dinc (2020).
<- Creditors plead quistclose trusts when recipient of loan has become
insolvent and trust then operates as security advise. Is it feasible to permit
trust law to be used in such situations?
Summary:
=A manifested intention to create a trust is the first substantive
requirement for a valid declaration of trust.
=For a declaration to have occurred, it must be shown that the
words used by the transferor evinced an intention that the recipient
be legally obliged to hold the rights in question for another.
=This is different from the imposition of a moral obligation, which
is insufficient to establish a trust.
=Unfortunately this distinction can cause difficulty. Re Adams &
Kensington Vestry highlights this problem.

2)Certainty of Subject Matter (( defines the trust property ))

Second aspect is certainty of subject matter.
Subject matter is property over which trust is declared.
Property can be of any form such as land, bank deposits accounts, shares
etc.

-> Subject matter certainty is necessary for trustee to know which

property trust is to be executed.

Certainty of subject matter covers two issues.

i) Property Identifiable:
First is certainty as to property itself. This means property should be
identifiable: Sprange v Barnard (1789).
This is demonstrated in Boyce v Boyce (1849) property was not
identified because settlor asked his one of daughter to choose any one
house from three house and the remaining two will be trasferred to her
other sister, but the daughter died; there is no clarity as to which house
the daughter would have chosen; thus, there is no trust as subject matter
of trust is uncertain.

A trustee ought to hold property for another.

Future Property:
<- Trust cannot be created of future property. Future property means that
property which settlor does not currently have but hopes to have in
future. Trust cannot be created of property which settlor does not
Consequence of inability to identify trust property:
-> Where there is self-declaration of trust, it is not problematic if settlor
failed to identify trust property. All settlements will remain as before.
(( If there was a self-declaration of trust, nothing happens when a
settlor fails to identify which property is subject to the trust.
Everything remains as before. Where there is a transfer, the
position is more difficult. In Palmer v Simonds, the court held that
the recipient took the property outright. ))

<- Where certainty of subject matter gets uncertain, it makes intention to

create trust suspicious.
(( If the intended trust property cannot be identified, the effect of
the attempt to create a trust will depend on the facts.
The thinking here is that uncertainty as to subject matter feeds
back into uncertainty as to intention to create a trust in the first
place. This will not always be the case. ))

ii) Property Quantifiable:

Second issue is property should be quantifiable: Sprange v Barnard
(1789). This means how much of property each beneficiary should get.

In Palmer v Simmonds (1854) settlor used word bulk; it was uncertain

word as what will amount to bulk is unclear. In Re Jones (1898) settlor
used word ‘such parts of my estate’; this was uncertain as what amounts
to such parts are not clear.
However, there is a contrasting case, Re Golay’s Will Trusts (1965). In
this case court regarded ‘reasonable income’ certain. Court stated that
‘reasonable’ word provided objective yardstick. Reasonable amount of
property would be certain where it could be objectively determined what
would amount to reasonable amount ‘in any particular case’. Thomas J
said: ‘the court is constantly involved in making such objective assessments
of what is reasonable and is not to be deterred from doing so…the testator
intended by reasonable amount, the yardstick which the court could and
would apply in quantifying the amount so that the direction in the will is not
defeated by uncertainty’.
(( Re Golay’s WT: ‘reasonable income’ to be provided out of a fund was held to be
valid if it was possible to make an objective measurement of what would
constitute a reasonable income in any particular case.
The difference here was that the court was able to determine what
was reasonable by reference to objective considerations.
Where a court can determine an appropriate meaning of the terms
in the trust, the declaration of trust will be valid, as Re Golay’s WT
illustrates. ))

Property can tangible, intangible, real or personal.

Tangible Property:
In tangible property, trust property should be segregated from bulk in
order to create trust: Re London Wine (1986). Oliver J stated: ‘before
any trust could be said to attach to any tangible assets comprised within a
class of assets, the particular assets have to be identified’. In Re
Stapylton Fletcher (1994) those tangible property which were
segregated from bulk were held as trust property and tangible property
which was not segregated was not held as trust. Lord Mustill in Re
Goldcorp Exchange (1994) said: ‘A right in the property whether legal
or equitable cannot exist in the air, it can only exist in specific property’.

Segregation is needed even among homogenous chattels: Re Goldcorp

Exchange (1994).In this case gold bullion was not held on trust as it was
not segregated from bulk. In Hunter v Moss (1994) Collin Rimmer
explained it: ‘certain…assets in a group of ostensibly similar or identical
assets may in fact have characteristics which distinguish them from other
assets in the class. Consignments of wine provide a good example. Some
of the cases in it may contain wine that is corked, or may have been
stored badly and have deteriorated or may have other inherent defects’.

Intangible Property:
For intangible property, rules are different from tangible property.
There is no need to segregate trust property from bulk if trust property
has same value as of bulk and trust property is indistinguishable from
bulk: Hunter v Moss (1994).
(( A valid trust was created for 50 shares. A portion of intangible assets does not have to be
The trust was valid. It was not
segregated from the rest to form the subject of a trust.
necessary to segregate the shares as it made no practical difference as to
which 50 shares were subject to the trust given that there is no qualitative
difference between one ordinary share and another ordinary share.
Furthermore, they are intangible and each share is indistinguishable from
each other because they are shares in the same company. since the shares
were of such a nature as to be indistinguishable one from another and were
therefore all equally capable of satisfying the trust, it was unnecessary to identify
any particular 50 shares. ))

<- However, Hunter was criticised. Penner argued that segregation

should be prerequisite for all sorts of property. Underhill and Hayton
stated in their text that ‘there is no sound reasoning for distinguishing
trusts of goods from trusts of intangibles’. Hudson also stated that Hunter
v Moss is a wrong decision.
<- In MacJordan v Brookmount (1992) trust property concerned money
in bank account. Court applied Re London Wine (1986). Following Re
London Wine there was no trust because of lack of segregation of the
trust property. Re Goldcorp Exchange (1994) approved MacJordan.
-> However, since it was Privy Council case, hence it did not have
binding authority. Hunter v Moss (1994) had binding authority. In Re
Harvard Securities (1994), Shah v Shah (2010) and Lehman v CRC
Credit Fund (2012) court followed Hunter v Moss.
-> Jill Martin & Jones approved Hunter v Moss.
->In Pearson v Lehman Brothers (2010) it was to determine whether
non-segregated shares constitute property for trust. If unsegregated shares
are co-owned in company then it is valid trust property whereas if shares
are sold then it is not indistinguishable as shares are divided.
-> Sales of Goods Act 1995 also stipulated ‘where a customer has paid in
advance, he becomes tenant in common and will take priority over other
creditors’. The statue became supporting argument for Hunter v Moss
(1994) and
<- indicated that Re London Wine (1986) is not fair decision.

Reform:
Till segregation is made, constructive trust arises.
( co-owned: indistinguishable
tenant in common: non-segregation )
(( In Pearson V Lehman Bros judge had to decide whether there was a trust in case
shares had not been segregated. Could argue that, if all the shares in the company
are co-owned, then there is a trust for unsegregated shares. If the shares are sold,
the proceeds are split.
However, final impact was made by the statutory intervention. Sales of Goods Act
1995 states that where a customer has paid in advance, he becomes the tenant in
common and will take priority over other creditors. This appears to take the Hunter v
Moss approach and shows how Re London Wines is unfair.
Reforms: Till the time of segregation, a constructive trust should be imposed ))

Summary:
=The subject matter of a trust can consist of virtually all types of
property.
=However, it must be possible to clearly identify what property is
subject to the trust otherwise the trust cannot function, as shown
by Re London Wine and Re Goldcorp – although greater leniency
seems to be given to intangible subject matter, as seen in Hunter v
Moss.
=‘Conceptual uncertainty’ can mean there is no valid declaration of
trust, as was seen in Palmer v Simmonds.
=However, where a court can determine an appropriate meaning of
the terms in the trust, the declaration of trust will be valid, as Re
Golay’s WT illustrates; and
=a testator’s residuary estate is always certain. It is everything left
after the satisfaction of specific legacies in the will.
=A trust of property, which the settlor does not at that moment
have, cannot be created.

3)Certainty of Objects:

* ((If however the only reason for a trust failing is that the objects are uncertain, the trustees will hold the
property on resulting trust for the settler of the estate. ))

If trust fails because of uncertainty of object, trustee will hold property

on resulting trust for setllor.

There must be beneficiaries to a trust. It is important for trustee to carry

out their job to know who those beneficiaries are: Morice v Bishop of
Durham (1805).

Beneficiaries are required to be certain in three aspects.

1) Conceptual certainty
2) Evidential certainty
3) Whereabouts certainty

1) Conceptual Certainty:
(( the problem of uncertainty only arises where the settlor uses a
generic term to describe the class (for example, my children, my
relatives or my friends).
Where the beneficiaries are individually named,no question of
uncertainty of objects arises because,of course,the beneficiaries
are named! ))
First is conceptual certainty which means beneficiary should be certain,
identified.

Sachs LJ in Re Baden’s Deed Trusts (No 2) (1972) stated some

examples of conceptually certain classes of beneficiaries; these include
‘first cousins, members of the X trade, those who have served in the
Royal Navy’. In this case, court regarded relatives as conceptually certain
despite criticism that relatives could involve wide interpretation. Court
held that it is duty of trustee to select direct relatives and not remote
relatives. This case is however a bad authority.

<- Friends would come in conceptually uncertain class of beneficiaries.

In Re Gibbard (1967) ‘old friends’ was regarded conceptually certain.
However, in Re Barlow’s Will Trusts (1979) friends were regarded
conceptually uncertain class. Browne-Wilkinson stated: ‘ Friends has a
great range of meanings; indeed its exact meaning probably varies from
person to person. Some would include only those with whom they had
been on intimate terms over a long period; others would include
acquaintances who they liked. Some would include people with whom
their relationship was primarily one of business; others would not.
Indeed, many people, if asked to draw up a complete list of their friends,
would probably have some difficulty in deciding whether certain of the
people they knew were really ‘friends’ as opposed to ‘acquaintances’…’.

(( In Re Wrights(1999) settlor left property for those who have ‘helped my late
husband’. It was held to be conceptually uncertain as the word could have had
multiple interpretations. ‘Such people and institutions as have helped me or my late husband’ - conceptually
uncertain What constitutes ‘help’?
In Re Leek (1969) property was left for such persons as ‘the trustee may consider
that the settlor should have left something for them’. The trust failed for conceptual
uncertainty. ))

<- Where there is conceptual uncertainty 3rd party or trustte himself

cannot resolve it: Re Coxen (1948). Court held that 3rd party involvement
can help resolve evidential uncertainty but not conceptual certainty. This
is because it would finish court’s jurisdiction to help out in solving the
problem, and trust which settlor has himself defined incompletely cannot
be secured by taking assistance from trustee’s opinion when in reality
trustee relies on settlor’s settlement and opinion.
-> However, where settlor has mentioned a workable technique to solve
uncertainty, trust cannot be failed: Re Tuck (1978). If independent expert
is mentioned in trust or will then he can solve uncertainty. For example,
in this independent expert was Chief Rabbi.

(( Re Coxen: Where a class defined by settlor is potentially uncertain, the settlor may
attempt to rescue the trust from uncertainty and invalidity by providing that uncertainties are to
be resolved conclusively by a named 3rd party or by the trustees themselves. Held: Such
provisions, although capable of resolving evidential uncertainty, cannot cure conceptual
uncertainty because this would effectively oust the jurisdiction of the court. How could
conceptual uncertainty be resolved by a 3rd party if it could not be resolved by the court? A
gift will not be saved by making reference to the opinion of trustees where the settlor has
himself insufficiently defined the state of affairs on which the trustees are to form their opinion.
Re Tuck: property was left for ‘good Jew’. Who will be good Jew will be decided by
the chief Rabbi. Lord Denning held that if the settlor had given the workable formula
to resolve the uncertainty then there appears to be no reason to fail the trust. This
is persuasive authority and not a binding precedent.
P: An independent expert can resolve uncertainty in a conditional gift if they are named in the will or trust.
F: beneficiary could receive income if he was of Jewish faith and be married to Jewish wife. Chief Rabbi of that community
was given power to decide whether someone was an ‘approved wife’. ))

2) Evidential Certainty
Second is evidential certainty which means ‘proving whether a person
falls within the class intended to be benefit’: Re Baden’s Deed Trusts
(No 2) (1973).
(( Sir: Evidenital uncertainty is where the beneficiary does not have
proof for his identity such as ID card or passport etc. ))

To prove evidential certainty, it depends upon type of trust.

i) Fixed trust
In fixed trust, test for certainty of object is complete list test. This was
given in IRC V Broadway Cottages Trust (1955). In complete list test,
trustee ought to determine identity of all intended beneficiaries. This
means definition of beneficiaries ought to ‘be certain enough that one can
identify each and everyone of those beneficiaries’. Trustee will make list
of all intended beneficiaries.

Trustee cannot dispose of share unless intended beneficiaries’ identity is

known.

In fixed trust, interest or share of beneficiary is specified. For instance, ‘a

trust for my children in equal shares’.
Trustee had no discretion in fixed trust.
Where trust has not mentioned how property would be divided among
class or list of beneficiaries, beneficiaries will be given equal shares.
(( Normally, if a trust is silent on how property is to be divided
among a list or class of beneficiaries, the beneficiaries will have
equal shares.))

ii) Discretionary trust (trust power)

-> Trustee has discretion in discretionary trust regarding which member
or members get what amount of share of trust property.
-> Sometimes settlor do have to identify amount of share that
beneficiaries are entitled to get. This is not a issue in discretionary trusts
because in discretionary trusts trustee has to determine share himself.
<- Beneficiary cannot get his share unless trustee uses his discretion to
give him his share.
(( where the trustee is given a class of beneficiaries and he has to choose from
amongst the class.
=If a trustee selects a person who does not fall in the class then it would mean that
the trustee acted ultra vires the class. ))

In discretionary trust, test for certainty of object was complete list test.
This was given in IRC V Broadway Cottages Trust(1955). In complete
list test, trustee ought to determine identity of all intended beneficiaries.
This means definition of beneficiaries ought to ‘be certain enough that
one can identify each and everyone of those beneficiaries’. Trustee will
make list of all intended beneficiaries.
However, in McPhail v Doulton (Re Baden) (No1) (1970) complete list
test for discretionary trust was rejected and overruled. The new test is is
or is not test, also known as any given postulant, which is also applied in
powers. In is or is not test, trustee has to decide whether the beneficiary
who came to him is or is not member of intended beneficiaries: Re
Gulbenkian’s (1968).
Stamp LJ in Re Baden (No2) mentioned that there ought to be absolute
certainty that claiming beneficiary is member of intended beneficiaries
class or not.

-> The new test is not as strict as complete list test.

<- However, where even one beneficiary is uncertain whole trust fails.
This interpretation has revised complete list test strictness.

Burden of proof is on beneficiary to prove that he is intended beneficiary:

Sachs LJ said in Re Baden (No2).
<- This interpretation can be condemned as it is shifting burden of proof
from trustee to beneficiary when in fact trustee is under obligation to
enforce discretionary trust.

Lord Wilberforce in McPhail v Doulton (Re Baden’s Deed Trusts

(No.1) (1970) favoured is or is not test on four grounds:
I) First is that settlor of discretionary trust has no intention to benefit
whole class of beneficiaries. He only intends to benefit some of them.
Hence, complete list test is not compatible with the intention of settlor of
discretionary trust.
II) Second is complete list test is time-consuming and expensive.
((Secondly drawing up a complete list is a waste of time, money and resources on
trustee’s behalf. ))
III) Third is that if trustee in complete list test could not make complete
list, whole list is discarded, and then court makes list, and distributes
property equally. In discretionary trust, discretion is given to trustee,
not courts. Hanbury argued that equal division defeats intention of
settlor.
(( thirdly if the trustee fails to drop a complete list, then the entire list will be
cancelled and the matter will be sent to courts which would then draw up a
complete list.
= But, because the discretion lies with the trustee and not the courts, the court will
equally divide the property among the entire class. Hanbury stated that this practice
of equal division was not favorable to anyone and it defeats the settlor’s intention. ))
IV) Fourth is powers and discretionary trust are virtually similar things
with only difference of ‘ultimate enforceability’. Thus, the test should be
same for both of them.

<- However, dissenting judges Lord Guest and Lord Hudson stated that
it is the stark difference of ‘ultimate enforceability’ that is the
distinguishing feature between powers and discretionary trust; thus there
should be different tests for both of them.
-> They asserted that complete list test is reasonable. It does not be
replaced,
<- but to limit number of intended beneficiaries, it is valid reason to
change the test.
(( They argued that the complete list test is based on sound reasoning and there is no need
to replace it. The only valid reason for changing the test is to prevent a large number of test
from failing. ))

-> Megaw LG argued in Re Baden (No2) that there was that substantial
number of intended beneficiaries would come in this class. This is not the
case. In fact substantial number can fall in intended class of beneficiaries
due to is or is not test in contrast to complete list test.

According to Family Reform Act 1969 and Trustee Act 1985, trustees are
not doubted when those persons who are know to them comes in
intended beneficiary class provided trustee used particular advertising
techniques.
This shows that complete list test contradicts the statue.
= (( Furthermore, the Trustee Act 1985 and the Family Reform Act 1969 states that
the protection will be granted to those trustees who distribute the trust property
amongst only those beneficiaries who are known to them but after they follow
certain advertising methods. Considering these two Acts one may conclude that the
complete list test was in any case contradicting the statute. ))

iii) Powers
Powers are not of obligatory nature; therefore they are not enforceable.

Powers is of 2 types:
I. Mere Powers
First is mere powers. It is conferred to some non-trustee. Power holder is
not obliged to perform that power.
Powers of appointment (mere powers) is not trust in itself but it is used in
trust instruments.

II. Fiduciary Powers

Second is fiduciary powers. It is conferred to some trustee. Power holder
is obliged to perform that power. However, he still is not required to
perform.

In powers, test for certainty of object is is or is not test: Re

Gulbenkian’s (1968). In is or is not test, trustee has to decide whether
the beneficiary who came to him is or is not member of intended
beneficiaries.

In powers, trustee has just power if he has right to make selection

pertaining to beneficial enjoyment of property, not obligation.
Court will also not compel trustee.
However, this does not mean that trustee will ignore it.
He has to consider from time to time whether to execute the right or not.
(( A mere power is very different [from an ordinary trust obligation]. Normally the trustee is
not bound to exercise it, and the court will not compel him to do so. That, however, does not
mean that he can simply fold his hands and ignore it, for normally he must from time to time
consider whether or not to exercise the power, and the court may direct him to do this. ))

= mere powers (powers of appointment)

=fiduciary powers (discretionary trust )

iv) Gifts Subject to Conditions

Where gifts are given subject to conditions, there one person test is
applied: Re Barlow’s WT(1979). In one person test, conceptual certainty
is not required; it is sufficient if one of intended beneficiaries can satisfy
the criteria.
<- However, Emery condemned the decision.
Donee will not be entitled to gifts until they comply with the criteria.
They are not trusts.

3) Whereabouts Certainty
Whereabouts certainty means whereabouts of beneficiaries should be
certain.
(( =this is not something which will cause the potential trust to be
adjudged invalid.
+whereabouts: the place where that person or thing may be found. ‫ٹھکانے‬ ))

Failing a trust with Certain Class of objects:

i) Administratively Unworkability:
Trust with certainty as to class of objects can be failed if trust is
unworkable. It can be administrative unworkability.

In administrative unworkability, trust with certainty as to class of object

will fail not because of large size of class but because of not ‘able to
identify a core class capable of being surveyed’.
In MchPail v Doulton (Re Baden No.1)(1971) court held that class of
intended beneficiaries should not be so lengthy that trust becomes
administratively unworkable or cannot be carried out. For example, in R
v District Auditor West Yorkshire property was left for West
Yorkshire residents.
= (( Re Blausten: held that trusts fail for administrative unworkability and not
powers. ))

<-
(( = Penner stated that the term administratively unworkable is conceptually
uncertain. ))

2)Capriciousness
(( +capriciousness n : the quality of changing mood or behaviour suddenly and
unexpectedly ))

Powers are not invalid for administrative unworkability but capricious

powers are invalid for administrative unworkability: Re Manisty’s
(1974). Capricious powers stay invalid because terms of power
(( Templeman J: A power cannot be uncertain merely because it is wide in ambit: ‘The mere
width of a power cannot make it impossible for trustees to perform their duty nor prevent the
court from determining whether the trustees are in breach’. But a capricious power is invalid: A
power to benefit ‘residents of greater London’ is invalid, it is an ‘accidental conglomeration of
the
persons who have no discernible link with the settlor or with any institution’.
‘residents of London’ was capricious because the terms of the
power negated any sensible intention on the part of the settlor. ))

=Blausten v IRC (1972):

(( the settlement gave the trustees the power to introduce any person other than the settlor as a member of a class of
objects, but subject to the written consent of the settlor. It was held that a hybrid power of appointment was created. trusts
fail for administrative unworkability and not powers. ))

=Re Manisty’s Settlement (1973):

(( Likewise the court decided that a hybrid power was created. In this case the trustees were given a power to add

objects to a class of potential beneficiaries which excluded the settlor, his wife and certain named persons. ))

(( McPhail: The definition of beneficiaries must not be so wide as not to form anything like
a class so that the trust is administratively unworkable or cannot be executed. A trust for all the
residents of Greater London is void. However, ‘relatives’ of a living person would not be too wide

=This arises out of the abandonment of the ‘fixed list’ test and the
adoption of the ‘is or is not’ test of certainty of objects for
discretionary trusts and the consequent acceptance of the prima
facie validity of conceptually certain classes as huge as ‘relatives of
X’ or ‘all the inhabitants of London’. The members of such classes
cannot be surveyed one by one.
It may be suggested that if there is a ‘core class’ of objects within
the larger class to whom the trustees may primarily devote their
survey of objects before making payments, then the trust will not
be administratively unworkable,
although no case has explicitly stated that the absence of a ‘core
class’ is the basis for the finding of such unworkability.
On the ‘core class’ view, ‘relatives of X’ is workable because a core
class easily identifies itself (i.e. the close relatives of X as opposed
to distant relatives). ‘Residents of London’ is not workable, because
there is no such core class.
The problem is not size. ‘Relatives of X’ is a larger class than
‘Residents of London’. (You may find this surprising, but in law
‘relative’ or ‘relation’ means descendent of a common ancestor, and
so, counting back to more and more distant ancestors and then
back down to living persons, everyone undoubtedly has many more
relations than they could ever identify, and we are all related if we
want to go as far back as the first humans to arise in Africa.)
The problem is solely being able to identify a core class capable of
being surveyed.
In Re Manisty’s ST [1974], Templeman J associated the concept of
administrative unworkability with ‘capriciousness’, saying that a
power of appointment given to a fiduciary in favour of the
‘residents of London’ was capricious because the terms of the
power negated any sensible intention on the part of the settlor.
However, in Re Hay’s ST [1982], Megarry J doubted that such a
trust would be capricious if the settlor had been a former Chairman
of the Greater London Council (and in such a case the power,
although valid, would equally disclose no ‘core class’). ))

Conclusion:

=((
Conclusions : To conclude, the statement is partially true. English law development on equity
and trusts states that the subject matter of a trust should be separated from a larger bulk to
be valid. This applies to tangible property. A trust would still be valid if the subject matter is
not separated from a larger bulk of property that is intangible. The validity of a trust is
therefore based on whether the subject matter is tangible or intangible. The case of Hunter v
Moss supports this view. The decision in Hunter v Moss received mixed responses. Some
professionals welcomed the decision as being fair and leading to certainty while some
academics, including Hudson criticised the decision
))

….………………………………………………………………………..

+
+
+Tangible Property: is literally anything that can be touched, and includes both real
property and personal property (or moveable property), and stands in distinction to intangible
property.
+Real Property / immovable property: In English common law, real property, real
estate, immovable property or, solely in the US and Canada, realty, is land which is the property of
some person and all structures (also called improvements or fixtures) integrated with or affixed to the
land, including crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads, among other
things.

+Personal Property: is property that is movable.[1] In common law systems, personal property
may also be called chattels or personalty. In civil law systems, personal property is often
called movable property or movables—any property that can be moved from one location to
another. Personal property can be understood in comparison to real estate, immovable property
or real property (such as land and buildings).
Movable property on land (larger livestock, for example) was not automatically sold with the land, it
was "personal" to the owner and moved with the owner.
The word cattle is the Old Norman variant of Old French chatel, chattel (derived from Latin capitalis,
"of the head"), which was once synonymous with general movable personal property.

+ Intangible Property: is something that a person or corporation can have ownership

of and can transfer ownership to another person or corporation, but has no physical
substance, for example brand identity or knowledge/intellectual property. It generally
refers to statutory creations, such as copyright, trademarks, or patents. It excludes
tangible property like real property (land, buildings, and fixtures) and personal
property (ships, automobiles, tools, etc.).
+Trust Deed: a deed of conveyance creating and setting out the
conditions of a trust
+ Quistclose Trusts: A Quistclose trust is a trust created where a creditor
has lent money to a debtor for a particular purpose. If the debtor uses the
money for any other purpose, then it is held on trust for the creditor.
+ Fixed Trust: A fixed trust is one in which the share or interest of the
beneficiaries is specified in the instrument and the beneficiary is therefore the
equitable owner of the interest allocated

+one-off: done, made or happening only once

+
+