Certainty of subject matter essay

The three certainties of intention, subject matter and objects are a must if we want a
private express trust to be legitimate under law. The necessity and importance of all
these three certainties has been emphasized in many different cases but the most
important one can be seen by Lord Langdale's decision in the case of Knight Vs Knight
which is most often cited as it has established these three certainties. However Lord
Langdale's statement was not the first one as previously Wright vs Aykyn had already
stated these three common certainties.
The specific property must be specifically identified in order to fulfill the requirement of
certainty of subject matter which will serve as the trusts subject matter. This is a
requirement for a private trust to be legal. A trust will be held void for the certainty of
subject matter if the property which is in question could not be precisely identified,
which could happen due to a lot of different reason. If the settlor or even the testator is
not able to specifically name the property which is a subject of the trust is the first
explanation which is usually accepted without criticism. It was determined in the case
of Hemmens vs Wilson Browne that the arrangement which alleged to grant right to
ask for payment of 110000 pounds did not establish any trust because there was no
apparent asset which could be identified and serve as the trust's subject matter.
We can see from the case of Fortex Group vs MacIntosh that trust of money is not
possible to be deposit into an overdrawn account because no specific subject matter
exists there. Mac Jordan Construction Ltd. vs Brookmount Erostin is another case a
claim that was rejected because identifiable assets were not present. Second of all we
should know that where the trust property is ambiguous in nature then the trust may
still fail and that is even if it relates to a specific trust asset. Theoretically speaking any
ambiguous statement in relation to the amount of trust property may cause the trust to
fail due to uncertainty in the trust subject matter. The phrase the bulk of my said
residuary estate was deemed to be insufficient to establish a trust in Palmer vs
simmonds which then resulted in failure of a testamentary trust. Anthony Vs Donge is
another case of conceptual uncertainty failure where widow of testator was declared
that she was entitled a minimal portion of estate just for maintenance purpose under
the law. But because there was no such entitlement there was confusion. Still court have
demonstrated their willingness to reach a particular conclusion despite what appears to
be conceptual confusion on, these grounds that it is conceivable to establish a limit for a
hazy term. Re Golay's Will Trusts was a case where a trust of fair income was upheld
by the court and this provides us an example of this. It's challenging to comprehend
these conflicting viewpoints (Penner). third and maybe most contentious factor which is
relating to subject matter uncertainty is an portion of trust property which has not been
determined out of a larger majority.
In Re London Wine Co Shippers case decision was seen that if a trust propery is not
made separate from the bulk when only a portion of a greater bulk of tangible property
unascertained products is held on trust then trust will fail. The Privy Council upheld
and applied Re London Wine in Re Goldcorp Exchange Limited. The rule's
justification is that even when a majority of property is being easily identifiable then
there cant be a trust of unidentified chattels that are not segregated. Comparable goods
are not every time the same.
The Sale of Goods Act of 1979 guides us that buyers of unascertained commodities that
are the part of any identifiable whole and are then sold gain right as tenants in common
however this provision doesn’t really apply to the express trust of goods which are
unascertained. The Chattel’s Principle of Segregation does not apply to shares or cash or
other tasks which are in action and this was decided by the Court of Appeal in Hunter
vs Moss. Anyhow the fact that they had not been segregated Moss declaration of trust
for 50 of the 950 shares was recognized as being legitimate. Many complaints have been
leveled at the Hunter vs Moss ruling firstly the ruling goes against Mac Jordan
Construction Ltd vs Brookmount Erostin case because it says that appropriation will
only be necessary when we are dealing with chattel or a tangible property and that the
norm does not apply in a situation where the trust property is an intangible component
of an identifiable bulk. Secondly critics also raise the issue of following transactions.
What takes place when the settlor trustee handles shares? Shares transferred to whom?
Is there a trust breach here? Martin says that the solution is given to us under tracing
rules. Penner asks whether the tracing principles should govern the certainty issue.
Thirdly the Goldcorp model also eliminates the issue of one unsecured creditor who has
an edge over other unsecured creditors in insolvencies. Fourthly even if Re Harvard
Securities decision was being followed still justice Campbell had favored the tenancy in
common method in cases like White Vss Shortfall where the Supreme Court of new
south wales rejected the separate property of proportion in the bulk solution.
On the grounds that the declaration of 50 out of 950 shares created a trust of all 950
shares for both parties as tenants in common in the proportions of 50 over 950 for
Hunter and 900 out of 950 for Moss the outcome in Hunter was approved in the White
case. As all shares are being held on trust this then will avoid the problem of a subject
matter certanity. Instead of separate trust of 50 shares there is one complete trust which
is covering all of shares with two beneficiaries. The Supreme court has preferred and
also favored this strategy in Re Lehman Brothers International in the case of
Administration vs CRC Credit Fund. According to many people when several
customers cash are held in one sizable fund a single trust is than created for all the
customers. Intangible asset like the bank deposits and shares of same company can only
be held in coownership and that is according to Professor Goods. trusts of residuary
estate have been the fourth topic to spark discussion over the certainty of subject matter.
A testamentary trust or even a gift of a residuary estate is legitimate and cannot be said
to be held void due to uncertanity in the subject matter as it only refers to everything
that is left although this point was not decided in case of Choitram vs pagarani by the
privy counsel because it was not in issue in that particular case. The question whether a
testator is able to establish a property trust or not under a suspended trust is still open
in relation to residuary estate. Such a trust was disallowed in case of Sprange vs
barnard and this conclusion was shared in lambe vs eaves and Mussoorie bank Ltd Vs
raynor. Yet the australian strategy of floating or suspended trust from case of
Birmingham vs renfrew was used in another case of Ottaway vs norman. Court have
started now to distinguished between future property and an residuary interest despite
that a settlor cannot create a trust of any future property which he doesn’t already own
cases of Re ellenborough and Re Brooks Settlement trust.
Although the legal title to a trust property is not possible to be transferred to a trustee at
that particular moment, a person is allowed to make a trust immediately over it. A
future property trust is also ruled to be held valid if its later acquired by trustee and
imprinted with the trust as can be seen in the case of(Re Bowden).
Confusion in the subject matter might have major repercussions for both the intended
beneficiary and the person who is establishing the trust. The impact of this doubt is that
the transferee, the intended trustee, keeps the property beneficially as the uncertainty of
subject matter has a reflex action on the previous words; it feeds back into certainty of
intention (Sir Arthur Hobhouse in Mussoorie Bank Ltd v Raynor). It is to be noted that
where a trust fails due to a lack of clarity on the beneficial interest, the courts have not
used the reflex action strategy. Even when the subject matter is certain, a trust may fail
due to doubt over the beneficial interest. Boyce vs. Boyce. The trust-based strategy that
resulted from this failure has been preferred. It is preferable that a consistent strategy be
used.

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