PEER FEEDBACK ACTIVITY – EQUITY AND TRUSTS

ANSWER AND FEEDBACK EXAMPLE 2

Student Answer
The aforementioned question, requires an analysis on the validity and effect of the bequests as laid
out in Marcels' will. In doing so, it is necessary to assess whether all three certainties (certainty of
intention, subject matter and object) co-exist for such a trust to be recognized under law. (Knight v
Knight).
1) To begin with, we must first assess whether it gives rise to Marcels' intention to impose legal
binding obligations on his wife to carry out the trust. It appears likely that in the absence of any
imperative words, the following provision lacks any intention to impose legal binding obligation.
Rather, it appears that the provision expresses mere hope or belief that his wife would carry out
the trust for the benefit of his sister, Hannah. Such precatory words do not give rise to legal binding
obligations as established in Lamb v Eames. It is therefore likely that in the absence of an
intention by Marcel, this is likely to be a mere power which would mean that the only duty on
Marcels' wife would be only to consider executing the trust and would be in no breach of her duty,
if she chooses not to.
Arguendo, in the unlikely event that courts do consider that certainty of intention exists, which may
be possible by interpreting the whole document (Comiskey v Bowring), then it is likely that the
trust would be valid. This is so because the subject matter is defined with sufficient clarity
i.e. £10,000, and the facts have mentioned that it is Hannah, Marcels' sister, who is to benefit from
such a trust. However, it is maintained that in light of the facts currently provided, it is likely that the
following provision would be classified as a mere power.
2) Here, it must be considered, whether the bequest is in fact a fixed or a discretionary trust. It
appears likely that the latter would apply.. The facts mention that the trustees have this discretion
regarding distribution purposes and how the property is to be disposed thus this is likely to be a
discretionary trust.
Turning next, to certainty of intention, as explained above, the words used are 'my trustees shall',
which are strong imperative words indicating that the trustee is bound to carry out the trust, as
opposed to a mere moral obligation. It can thus safely be concluded that certainty of intention does
exist.
Further, we observe that the subject matter is a pecuniary legacy, notably of £50,000. It needs
mention at this point that the settlor must have identified the actual money. Penner notes that the
'very notes and coins' must be ascertainable and the trust would fail for uncertainty of subject
matter if they are not segregated. The facts are however insufficient on whether Marcel actually
segregated the exact money which was to benefit his family and friends. If Marcel has done so,
then the trust would pass for certainty of subject matter.
Lastly, we must turn to assess who are the actual beneficiaries, which are to benefit from such a
trust. The facts mention that they are his family and friends, this is likely to give rise to conceptual
uncertainty as the language used appears to be vague and unclear. However, LJ Browne-
Wilkinson, held in Re Barlow's Wills Trust that the term friends were not too vague, and
subsequently stipulated a criteria for the term 'friends' i.e. the relationship must be a long-standing
one, the relationship must be a social one rather than a professional one and acknowledging that

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while owing to long periods, the circumstances prevented the testatrix and applicant from meeting,
but when circumstances did permit, they must have met frequently. In applying the criteria to the
current facts, the trustee must use the criteria to assess whether the potential beneficiary may be
termed as a 'friend' in order to give legal effect to the trust.
With regards to the term, 'family', this may qualified as certain as the definition of family is likely to
have been described by the Parliament in various statutes. Moreover, by contrast, the term
'relatives' which is a much broader term was considered as certain in McPhail v Doulton and it is
unlikely that the trustees or courts will have a difficulty in resolving who are meant as 'family'.
In wake of the foregoing, assuming that all the relevant certainties are established, one possible
issue to consider is the test which would apply in order to ascertain the potential beneficiaries
which are to benefit from such a trust. Being a discretionary trust, the relevant test is the 'is or is
not' test' as established in Re Baden's Deed Trust (No.2). Three of the judges in the case
attempted to lay out the application of the test. Sach LJ held that the test was applied if the
potential beneficiary is able to prove that he is within the class of beneficiaries who are to benefit
from such a trust. Megaw LJ held that the test would be successfully applied if it can be
established with reasonable certainty that a substantial number of beneficiaries fell within the class
so defined. Stamp LJ held that every potential beneficiary had a right to be considered by the
trustee and so the trustee was under a duty to carry out a survey which covers a substantial
number of beneficiaries.
In consonance with all three approaches, it is likely that the interpretation of Sach LJ may be taken
into account as it is not only easier to establish, but also proves to be less burdensome on trustees
as opposed to carrying out a survey or taking into account a substantial number. Conveniently, a
potential beneficiary, which in this case are family and friends must satisfy to the trustee that they
fall within the class, which the settlor had envisaged should benefit, and the test is held to be
successfully applied.
3) The beneficiaries have been identified with sufficient clarity i.e. Nelly and Claude and there also
exists certainty of intention, with the obligation being a legal one, that the terms of the trust be
carried out. The moot issue here is likely to be uncertainty of subject matter because the facts
suggest that Claude has to be the first one to choose from either the silver or the gold necklace,
however, Claude passes away without making any choice. This provision of Marcels' will is quite
analogous to the facts of the case in Boyce v Boyce. In that case, a testator had left three houses
to a widow with instructions that one of his daughters would be given the choice to choose first and
the remaining two houses would go to his other daughter but the daughter had died without
choosing the house first. The courts held that on the daughters failure to choose the house first,
the gift had failed because ascertainment of the other houses became impossible. In light of the
case, it is likely that such a trust would fail for lack of certainty of subject matter as it would be
impossible to ascertain which, from the two necklaces, would have gone to Nelly.
4) This provision is, in similar vein, likely to give rise to issues resulting in uncertainty as to subject
matter. It has been maintained that where the subject matter of a trust forms part of a larger mass
then, it is necessary that the subject matter be ascertained or appropriated to the contract. The
case of Re London Wine Co. Ltd revolves around similar facts of a quantity of wine which was to
be sold to the customers but had not been appropriated to the contract. The courts had held that
due to failure of segregation of property, there was no identifiable property on which the trust could
be created. Similarly, in Re Goldcorp Exchange, the courts re-iterated their approach and held
that 'there could be no right in a property hovering over an unidentified mass of property'. In light of
the two cases, it is likely that Marcel should have segregated which half of the wine was to go to
Hugo and it is likely that the trust would fail in the absence of ascertainable goods.
5) A provision pertaining to trust of residue requires a consideration whether it is certain as subject
matter. A trust for residue under a will or a testamentary gift is not uncertain as the subject matter

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can readily be made certain and the estate is correctly and precisely identified. It is worth noting
that a trust for residue estate is different from 'whatever is left' trust which was observed
in Sprange v Barnard, where the trust failed as it was impossible to execute what property had
remained after the husbands use but in contrast to a residue estate, there appears to be no
difficulty for the executors to determine what the residue of the estate is.

Tutor Feedback
Aspect 1: At the start of the answer, is there a focus on this being a
question about ‘the three certainties’ and identifies what they are.
Your introduction is to the point and is clear. I would suggest the word 'aforementioned' is
unnecessary though.
You mention the three certainties and then go on to explain what they are which is good.

Aspect 2: To what extent is there a discussion on whether or not the

will is valid? Is this necessary?
You do not look into the question of if it is a valid will. The question doesn't tell you and it is always
a good idea to write that you are proceeding on the basis that it is. The reason is that if it is not
valid the estate has to be distributed according to the intestacy rules.

Aspect 3: Bequest £10,000: Does the answer consider what the

words of the will are attempting to do? Does the answer contain an
analysis of what Marcel is probably intending? Is it a gift; is it a trust
and to what extent does the answer discuss both options? Is there
any discussion on precatory words and the use of relevant case
law: in particular has Re Comiskey, Lamb v Eames been used?
Has a useful suggestion been given in the event that the gift/trust
might fail?
You have analysed the scenario quite well and used a couple of relevant cases. By deciding it is a
mere power you then should go on and decide if that power has to be used. In other words would
the £10,000 be an outright gift to the wife?

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Aspect 4: Bequest £50 000: Has there been any analysis of the
intention of the testator? Has the answer considered whether there
is a discretionary trust and, if not, what the clause might create?
Has the answer identified the test for certainty of objects of a
discretionary trust or power, and how the cases have interpreted
that test. In particular does the answer given details of McPhail v
Doulton? Has there been analysis of the wording of “family and
friends” in the case law? Perhaps Re Baden No 2 has been
mentioned and the views taken by the judges in that case? A good
answer may compare it to a fixed trust, IRC v Broadway Cottages. It
is not necessary, but a really good answer would just briefly analyse
the difference between the two. Has that been done? If so, was it
done in far too much detail, which detracts from the real answer or
just enough to give a good insight into the difference and make the
answer stand out?
Your answer is not bad as you suggest correctly it is a discretionary trust. You eventually get to the
case of McPhail and also look correctly at Baden (no 2). However, you could be better at wording
the answer in a logical order. The way you have written it makes it a little unclear as you mention
something, go onto something else then go back to the first topic again.
Do you think the clause would succeed? If not what happens to the money?

Aspect 5: Necklaces: Does the answer consider whether this is a

gift or trust and whether the objects of the gift or trust are
identifiable? Has the answer rightly decided it is a trust? Does the
answer consider if Nelly and Claude are identifiable to Marcel? Has
the gift and the subject matter been identified? Have the relevant
cases been stated? e.g. Re Goldcorp and Re London Wine? Has
the answer addressed the part about Claude having died without
making a choice? Has the relevant case been referred to and the
outcome, if that case is followed? It would be good to see a short
discussion on Boyce v Boyce. Are there any alternatives mentioned
that might help the situation for Nelly?
You have correctly identified this is a question where Boyce should be applied. However, you could
than have gone o to look at the case of Burrough v Philcox because the beneficiaries are very
clear and a small class so the fairer result would be to sell the necklaces and give half the money
to Nelly.
You also have not addressed the question of if there was more than two necklaces. The question
is not clear. If there are more then the subject matter becomes completely unclear.

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Aspect 6: Wine: Has it been mentioned, albeit briefly, that this looks
like a gift to Hugo, and that Hugo can be identified? Does the
answer contain relevant case law about the potential donee making
a choice and whether the choice of “half” is valid?
Again you have correctly identified the relevant case law and explained the problem. You might
have discussed the word 'vintage' and perhaps the help of Re Tucks might have saved it, albeit
unlikely.
What happens to the wine?

Aspect 7: To what extent has the answer addressed the matter of

‘residuary’? Has this term been adequately explained? This is likely
to be brief, but helps bring clarity to the overall answer. Is it clear
that “residuary” is a term that is legally certain and clear,
although not quantifiable at the time the will was written?
I think your answer is slightly wordy but in essence you have correctly state 'residue' is certain.

Aspect 8: In the conclusion does the answer contain consideration

as to what provisions might fail, what will be upheld and what will
happen to the property if some provisions do fail? Has the answer
addressed what happens to the property if the gift/trust fails and
where it goes?
You have not summarised who gets what property as a conclusion.
I think it is usually a good idea to briefly conclude after each answer as to what might happen to
the property and then at the end of all questions just briefly suggest what falls into residue.

Overall Feedback:
You have demonstrated you have sound knowledge about this topic. You have used relevant case
law.
Some of your answers could be more concise and it would be good to summarise where you think
the property will go.
Overall a good effort.

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