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Hunter v Moss [1994] 1 WLR 452 (certainty of subject matter)
In order to have a valid trust in law one requirement that must apply is the three certainties,
these requirements will apply to all private trusts, it is also the case that these requirements
are at their most direct and explicit when referring to deliberate settlement of property on
trust through creation of an express trust.
The three certainties have emerged from Lord Langdale’s judgment in Knight V Knight.1
The classification of certainty requirements distilled from this judgement can and has been
subject of much criticism, however, it is the classification that has traditionally been adopted
by the courts and it remains at the heart of the judicial approaches to certainly requirements;
however what is “certainty”? in this context , when considering what is required to bring
about a valid trust, when reference is made to “certainty requirements”, this is reference to
making it clear that creating a trust of property is being attempted, what has to be clear or
certain is according to Lord Langdale: “As a general rule, it has been laid down, that when
property is given absolutely to any person, and the same person is, by the giver who has
power to command, recommended, or entreated, or wished, to dispose of that property in
favour of another, the recommendation, entreaty, or wish shall be held to create a trust…”2
Lord Langdale in Knight effectively created the three certainties that we have today; the
certainty of intention, certainty of object and the certainty of subject matter, with the latter
being the main topic of discussion. It is a requirement that the subject matter be certain, this
means that the property that is intended to be in the trust can be separated from other
property in order to be identified, if there is no clear separation of goods then the trust will fail
as in Re London Wine Co (shippers) Ltd3.
Re London Wine Co (Shippers) Ltd were unsecured creditors of a bankrupt wine trading
company, and they demanded that they should be able to claim the wine they had bought,
however because the wine in stock had not been individually marked as to which batch
belonged to who, it was held that no trust had occurred because the bottles were not
individually identifiable, furthermore Oliver J held that: “I appreciate the point taken that the
subject matter is a part of a homogeneous mass so that specific identity is of as little as
importance as it is, for instance, in the case of money. Nevertheless, as it seems to me, to create
a trust it must be possible to ascertain with certainty not only what the interest of the beneficiary
is to be but to what property it is to attach”4. The trust failed and subsequently set a binding
precedent in relation to the certainty of subject matter.
1
[1986] PCC 121
2
Lord Langdale
3
[1994] UKPC 3
4
Oliver J
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Eight years later just as in Re London the certainty of subject matter needed clarification by
the courts in Re Goldcorp Exchange ltd5 who were in the business of holding gold reserves
in coin and ingots for members of the public wishing to invest in gold, however, they owed
money to the Bank of New Zealand, consequently the bank petitioned for the business to be
wound up, which in turn transpired that Goldcorp had not held anywhere near enough
money for the members of public who had supposedly bought gold with it, the company
therefore lacked enough assets to satisfy the debt of the bank, inevitably the members
argued unsuccessfully that the gold that remained in stock was entitled to them, however the
bank had a much superior argument that following the precedent set eight years earlier in Re
London, that the gold stocks had never been isolated, therefore the public would be
regarded as unsecure creditors and the bank’s security interest (floating charge) took
priority. Lord Oliver’s statement and these two cases are considered to be part of the
“orthodox” or “strict” approach to subject matter.
The one exception to the “orthodox” or “strict” approach was controversially established in
Hunter v Moss6 , this case can be described as one of the most significant cases in trust law
that deals with the certainty of subject matter, the facts are as follows; Moss was the founder of
Moss Electrical Co Ltd and owned 950 shares in the company, and one day he said to Hunter
that he could have 50 of these shares as part of his employment. Significantly, he said nothing
involving the other 900 shares he owned. This gift of 50 shares was never implemented because
of tax concerns, and mainly because Moss had second thoughts. Hunter subsequently sued
Moss claiming his promised 50 shares, which rested on two factors. First, whether the language
used was sufficient to create a trust, and secondly, whether or not the trust failed to provide the
three certainties because of the lack of separation between the 900 and 50 shares.
As stated above prior to Hunter, a valid trust requires the three certainties, the ordinary rule for
the certainty of subject matter as stated by Lord Langdale, it must be certain what is intended
to be trust property by showing clarity otherwise the trust will fail. Given this ordinary
precedent by cases leading up to Hunter it is clear for example for a solicitor/judge dealing with
a case on subject matter to perhaps advice their client on what the law is or decide whether
certainty of subject matter has been met or not, however it is reasonable to claim that Hunter has
changed this.
Colin Rimer QC, (sitting as a deputy High Court judge) held that since the shares were all
identical, the lack of segregation between the shares did not invalidate the trust, the judge
distinguished the precedent set by Re London Wine Co Ltd because the subject matter (wine)
where potentially different, while all of Moss’s Shares were all identical, Rimer J instead cited
Rollestone v National Bank of Commerce7 in St. Louis, a decision of the Supreme Court of
Minnesota where it was held that separation of goods was not needed in such a situation, “ in
this case I cannot leave the point open, in my judgement the decision in Rollestone, reflected the
correct principle and I approach the present case in the same way. “In the result, I conclude that
5
[1994] UKPC 3
6
[1994]
7
[1923] 252 SW 394
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the trust which I have found the defendant to have declared was not void for the lack of certainty
as to its subject matter”8
On appeal, the Court of Appeal followed the Rimer’s decision and stated a valid trust had been
created, giving the lead judgement Dillon LJ said the trust was valid, because the trust was
required for Moss to enforce the terms of the employment contract. Second, he distinguished Re
London wine Co, by stating Re London was a “long way from the present”9, it was concerned
with the appropriation of chattels and when property of chattels passes. “We are concerned with
a declaration of trust”10, he concluded that there was no tangible distinction between the shares,
therefore there was no reason for the trust to be void just because they had not been separated.
The significance of this case is that for the first time in trust history, a trust was held to be valid
without the need for clarity as to which property is intended to transferred upon trust, although
Hunter is commonly cited with intangible, identical property, Lord Dillion never actually said such
a thing, granted it is the obvious conclusion to draw from his statement however it does leave the
question; how can his statement be interpreted?, he distinguished Re London, which allowed him
to decide the case on the facts alone, this does pose the question that if the same facts as
Hunter were to appear today but this time it involved 1,000 identical wine bottles would a trial
judge follow Hunter or London Wine co Ltd?.
Hunter added a degree of uncertainty on this area of law; the Court of appeals reasoning
employed that since the shares were identical and indistinguishable any 50 shares in the
company were capable of forming the subject matter of the trust, however when Lord Dillion
distanced himself from Re London and stated that “as a person can give by will a specified
number of shares in a certain company, so equally, in my judgment, he can declare himself a
trustee of 50 of his ordinary shares and that is effective to give a beneficial proprietary interest to
the beneficiary under the trust” the analogy drawn with what occurs upon death has proved
controversial because, with a testamentary disposition, the shares are to be separated and
allocated by the executors of the will.
It is with no great surprise that Hunter received masses of criticism from legal academics and
more, as David Hayton writing in the Law Quarterly Review states: “the decision was hurried; he
points out that inter vivos11 is not the same as a testamentary trust. With the later, the testator
does everything necessary to strip himself of all his legal and equitable title in favour of the
executor, which makes perfect sense as he/she is transferring the property upon death this
therefore also means there’s no problem with non-segregation of the trust property because the
gift is to be allocated by the executor of the will, it is important to note however that all the
property has to be identical. With an inter vivos trust, the settlor does everything necessary in
order to create the trust, but until he has segregated the assets which are to be held on trust then
that subject matter of the trust is therefore uncertain, David points out that Dillion J ignored the
fact that there is a “crucial difference between such a testamentary bequest, where undoubtedly
8
Colin Rimer QC
9
Sir Brain Dillion
10
Sir Brain Dillion
11
between the living
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the testator has effectively divested himself of his legal and beneficial ownership, and an inter
vivos declaration of oneself as trustee for another, where the disputed question is whether or not
the settlor has effectively divested himself of his beneficial ownership in specific property”12,
Dillion J effectively said that both a testamentary trust and inter vivos were the same.
David makes a very valid point; Moss should have separated the 50 shares from the remainder
of his 900 shares and told the company registrar of this at the time of agreement, what if he then
sold 100 shares the next day, who’s to say that he has or hasn’t just sold all of Hunters 50
shares, it seems the Court of Appeal have followed the general thinking that because intangible
property is so hard to distinguish it is therefore better to regard it as the same, which suggests
that the problem might just be poor reasoning by the Court of appeal, because in fact, a share
can actually be distinguishable as shares each receive unique certificate numbers etc.
By contrast of David’s opinions Jill Martin13 is in favour of Hunter, as she states that it was a fair,
sensible and workable decision by Court of Appeal, she says the problems which arose in Mac-
Jordan v Brookmount14 (concerning unsegregated money in a bank account) did not occur in
Hunter because in Hunter there was an identifiable fund of property (950) shares out of which the
trust was to be created. She states there was no need for segregation as the settlor retained the
ownership of the remainder of the shares in the fund and acquired a “mixed pot of identical
property”15.
By Jill Martin’s rational if Moss had sold 100 shares in the fund the next day, the beneficiary via
the trustee could still trace his entitlement into the 850 shares that remain and if all shares were
gone a tracing action could be pursued into the proceeds of those shares (50) to regain what
he/she was entitled to. The tracing mechanism mentioned by Martin acts as a brilliant remedy for
the beneficiary (hunter) which means there is no need for the separation of property even with an
inter vivos trust, however, one can now argue now that if this tracing mechanism works, it should
also work where the courts are dealing with tangible property? And this is s similar argument
Alastair Hudson puts forward in regards to the decision in hunter v moss and claims it should not
be relied upon, he says that it contradicts an element of property law which states that there be
“specific and identifiable” property to be subject to a property right, he goes further and says it is
difficult to see why there should be a dividing line between intangible and tangible, since there
are principles which apply to both types of property, he gives the example that 500 ball bearings
are tangible, but identical, this then means that under hunter, there is no reason these should
also not require separation, he proclaims the distinction between tangible and intangible is thus
“spurious”.
He suggests that the reason Hunter v Moss was decided the way it was in contrast to Goldcorp is
simple, in that “it was open to the Court of Appeal to decide that there had been a valid trust
created only because there were sufficient shares to satisfy the claim”16, implying that if they
12
Davies P and Virgo G, Equity & Trusts (7th edn Oxford University Press 2008)
13
Martin J, Modern Equity (19th edn Sweat & Maxwell 2012)
14
Erostin Ltd [1992] BCLC 350
15
Martin J, Modern Equity (19th edn Sweat & Maxwell 2012)
16
Hudson A, Equity and Trusts (8th edn Routledge 2014)
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were enough gold, would the decision have been different, i.e would tangible and intangible
property have the same rules under Hunter in regards to the separation of property?.

Hunter v Moss received support from Barlow Clowes International v Vaughan17, and was
followed in White v Shortall18 and Re CA Pacific Finance Limited19, however it is adamant the
most important case post-Hunter is Re Harvard Securities (Holland v Newbury)20 which
applied the precedent set by Hunter, Neuberger J decided that there was no need to segregate
intangible property, however even then the precedent was reluctantly applied, it seems the only
way that Hunter can be followed is to apply it to intangible property only, with regard to the
various points stated above it can only be said that Hunter was decided wrongly and should not
be relied upon, as Alastair Hudson points out it ignores and contradicts a fundamental element of
property law, having different rules to tangible and intangible property is unnecessary and will
continue to create uncertainty in the law, even the possible remedy created by Pearson v
Lehman Brothers21 & Prof Roy Goode has its problems it contradicts what Briggs J says that
the approach of Prof. Goode upholds the settlor’s true intention, when in fact it distorts what the
settlor did in fact intend.

Perhaps the only logical explanation of the decision in Hunter is by looking at the contrast
between Goldcorp and Hunter Alastair Hudson implies, the outcome of the case is because in
Goldcorp the court was concerned solely with the allocation of property rights, whereas in Hunter
v Moss the court was concerned with preventing the employer from benefiting from a breach of
contract, perhaps the courts primary intention was to award Hunter the shares he was promised,
without proper consideration of what this decision would do to the law.

17
[1992]

18
[2000]

19
[2000]

20
[1997] 2 BCLC 369

21
[2011] EWCA Civ 1544