Equity - lecture 2

Topic 1 - The 3 Certainties - Creating an Express Trust - Certainty of Intention

3 criteria for private express trusts to be valid:1. Certainty of intention - the settlor's intention to create a trust2. Certainty of subject matter - the property held on trust3. Certainty of object - the people who benefit from the assets in the trustThe 3 certainties were established in Knight v Knight [1840]. In order for there to be a trust, it must be clear: Settlor intended to create a trust What property is part of the trust? Who are the beneficiaries?

Certainty of IntentionDid the settlor intend for it to be a gift? Or did they intend for it to create a trust? If it is a gift, the person who receives it can do what they want with it. If it is a trust, the person who receives it must hold on to the asset for the benefit of someone else. Using the word 'trust' doesn't always mean a trust has been created. Are the words used imperative or just precatory? Wright v Atkyns [1823]- Imperative words impose an obligation. Imperative words= Authoritative, directive, commanding words. The language imposes legal obligation whereas precatory only imposes a moral obligation giving the trustee a choice what to do w/ assets. They are not legally bound if precatory. Precatory words= hope, desire or suggestion. Insufficient to establish intention. Jones v Lock [1865] - Words used by father insufficient to show certainty of intention as he put cheque in 9 month old baby's hand and said "I give this to baby for himself" then took it back and put it away. He didn't create gift because he didn't leave cheque w/ son. Didn't create valid trust because he didn't declare himself as trustee. No certainty of intention so trust not valid. Lamb v Eanes [1871] - "In any way she thinks best" is precatory language and not sufficient. Re Adams & Kensington Vestry [1884] - "In full confidence" and "do what was right" are precatory words. Using precatory words doesn't automatically result in failure of trust- Comiskey v Bowring-Hanbury [1905] - Settlor intended for gift to his wife with gift over to niece in equal shares. Re Steele's Will Trusts [1948] - Followed exact wording for creation of trust in previous case so intention was present.

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