Certainty of objects ( Beneficiaries)

 Objects of the trust should be certain or capable of being rendered certain.

 Problems relating to certainty of objects arise when the settlor uses generic terms,
such as my children, my friends etc to describe beneficiaries by referring them to a
class.
 Where beneficiaries are individually named no question of uncertainty arise.

Certainty of Objects under a fixed trust.

 Here the appropriate test adopted is, trustee must be able to determine the identity
of all the members of the class.
 Unless such an identity is made trustee cannot distribute the property. Because the
portion that each beneficiary will receive is contingent on the number of
beneficiaries.
 This test is called the complete list test. ; IRC V Broadway Cottages.

Certainty of Objects under a Discretionary trust.

 Under this situation trustees are not required to compile a complete list of potential
beneficiaries.
 The test pertaining to this is laid down in *Mcphail V Doulton.
 Test = *can it be said with certainty that any given individual is or is not a member of
the intended class? – This is also known as the *is or is not test.
 When applying the test it is of great importance to distinguish between *evidential
uncertainty and *conceptual uncertainty.
 Conceptual uncertainty – *this arises where the words used by the settlor do not
have a precise meaning.
- Example – “to all handsome boys of LEXpartners Law Academy.” Here the
concept used by the settlor is inherently uncertain.

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 - Similar words which give rise to such uncertainty – Friends, sons, etc.
 Evidential Uncertainty – *this occurs where it is known what the defining term of a
class means, but evidence are not enough to determine whether the particular
person belongs to that class or not.
- Example – “for my employees” – here the class is conceptually certain. But
evidence may not be enough to determine whether the particular employee
belongs to that particular class of beneficiaries.
 *Only where the objects are conceptually certain does any issue of evidential
uncertainty arise.
 When the class is conceptually certain, then the trust or power would not be
defeated by evidential difficulties. ; *Re Baden (No 2) 1973.
 Accordingly if it could be identified with sufficient certainty whether a person is or is
not a member of the class, *in theory it is said that Macphail test is satisfied.

Can conceptual uncertainty be cured by delegation? / issue of “opinion clause”

 Issue as to whether a matter could be settled by either trustees or by third party is

not settled.
 *Re Tuck’s Settlement Trust ( facts in brief)
- In the trust instrument there is a *condition precedent which states that the
beneficiary for the time being has to be of Jewish faith and if married, should be
married to an approved Jewish wife.
- It further provided that *if there is any doubt as whether a particular beneficiary
is in fact satisfy the criteria, the matter could be resolved by referring it to the
chief Rabbi.
- Held – *when conditions were condition precedents, it did not need to be
conceptually certain and were valid. – This view was supported by Lord Russel.
- However Lord Denning provided – *if there is any issue of conceptual uncertainty
in the conditions, matter can be cured by delegation.

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 - On the other hand Lord Eveleigh pointed out that – *opinion of chief Rabbi is
merely evidence of Settlor’s opinion.
 However the issue is not settled since early cases such as *Re Coxen and *Re
Wright’s WT did not follow the reasoning of Lord Denning.
 *Re Wright’s WT ( facts in brief)
- Trust was created for “ such people and institutions as my trustees think have
*helped me or my late husband”
- Held – trust failed for conceptual uncertainty. *Because helping the testatrix
could mean anything.
- Most importantly it was held, delegation did not cure conceptual uncertainty.
 *Martins , and *proff. Parker and Mellows provide that there is a possibility in
solving conceptual uncertainty by delegation. – They agree with Lord Denning’s
remarks in Re Tuck.
 On the other hand – *Hayton by contrast followed *Re Coxen and Re Wright’s WT.
Hayton raises an interesting question – *How can trustees solve uncertainty when
courts cannot?

Gifts subject to condition precedent

 These are not trusts. But raise similar issues as they are often phrased in generic
terms.
 As far as these are concerned, it is mainly considered about condition precedents
*where a less strict test will be applied.
 *Re Barlow’s WT. ( facts in brief)
- Executors were directed to allow “*any of her friends to buy painting from her
collection below market value”
- There was a very important condition precedent. – *friendship defines a class of
donees.
- Standard of certainty of objects here is similar to that of trust.
- Browne Wilkinson LJ held – *executors were not required to determine the class
of donees defined by the terms of friendship.

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 - *Instead it should be determined as a series of individual gifts to such persons
who could satisfy the criteria for friendship ( considering the long standing
relationship, whether they have met frequently etc)
 Principle in summery
- *In case of gifts with condition precedent,
1) Is or is not test is appropriated
2) court will be liberal in determining the criteria for vague terms. ; Re Barlows
WT

Consequences of uncertainty of beneficiaries

 If what is declared is a self declaration of trust, nothing would happen.

 If it is a declaration of a trust accompanying a transfer to a third party, *a resulting
trust would arise = third party as trustee and transferor as beneficiary.

Certainty of beneficiaries’ interest (this is related to the certainty of subject matter)

 Shares in which the beneficiaries are entitled under the trust must be clearly
identified by the settlor.
 This would not be problematic in a discretionary trust. But will be a problem in a
fixed trust.
 Curtis V Rippon ( facts in brief)
- It was stated in the trust instrument, “ *trusting that she would in fear of god,
and in love with children committed to her care, make such use of it as should be
for her own and their spiritual and temporal good, remembering always,
according to circumstances, the church of god and poor”
- Here beneficiaries could be identified as – children, church, poor
- However the *portion that each beneficiary is entitled is not certain.

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  If beneficial interests are unascertained, the trust will fail completely. ; *Boyce V
Boyce ( facts in brief)
- Testator devised three houses – stating “Maria, which ever house she may think
proper to be chosen or selected, and other two houses to the other daughter
Sharlet.
- Maria died in the life time of the testator and could not make her choice.
- Held – it is impossible to determine which houses to be held on trust for sharlet.
- Accordingly houses were held on a resulting trust for the testators residuary
estate.

Administrative Unworkability.

 In *Mcphail V Doulton, Lord Wilberforce further suggested that where the class was
conceptually certain, but was too wide to be administratively workable, such trust
would be regarded as in valid.
 Accordingly it is appeared that his Lordship seemed to have suggested a new type
of uncertainty.
 A discretionary trust was struck down in *R V District Auditor Exparte West Yorks
MCC
- “*for the benefit of any or all or some of the inhabitance of the country of west
York”
- Held – the class was conceptually certain. But it was too large
- If there is a co – class of subjects with in the larger class, then such trust is not
administratively unworkable.

 In *Re Manisty’s ST, Templeman J

- Associated the concept of administrative unworkability with capriciousness.

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