Skip to main content Accessibility help
×
Home

THE THREE CERTAINTIES REQUIRED TO DECLARE A TRUST – OR IS IT FOUR? “DISTRIBUTIONAL CERTAINTY”

  • David Wilde

Abstract

This article argues certainty in trusts is better understood by recognising a fourth certainty: “distributional certainty”. Distributional certainty is required in private trusts that involve dividing the property between beneficiaries: their shares must be clear. Distributional uncertainty is not, as usually understood, merely an instance of uncertainty of property: it has differing consequences, special resolution techniques, and may explain “administrative unworkability” in discretionary trusts. Distributional certainty is not required in charitable trusts. But this is not, as usually understood, merely an instance of the rule that charitable trusts do not need certainty of objects: it is an independent proposition.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      THE THREE CERTAINTIES REQUIRED TO DECLARE A TRUST – OR IS IT FOUR? “DISTRIBUTIONAL CERTAINTY”
      Available formats
      ×

      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

      THE THREE CERTAINTIES REQUIRED TO DECLARE A TRUST – OR IS IT FOUR? “DISTRIBUTIONAL CERTAINTY”
      Available formats
      ×

      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

      THE THREE CERTAINTIES REQUIRED TO DECLARE A TRUST – OR IS IT FOUR? “DISTRIBUTIONAL CERTAINTY”
      Available formats
      ×

Copyright

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.

Corresponding author

Address for Correspondence: Foxhill House, Reading, RG6 6EP, UK. Email: d.c.wilde@reading.ac.uk.

Footnotes

Hide All
*

Associate Professor of Law, University of Reading.

Footnotes

References

Hide All

1 Knight v Knight (1840) 49 E.R. 58, 68 (affd. as Knight v Boughton (1844) 8 E.R. 1195).

2 Alternatively, the objects of a trust can be purposes, rather than beneficiaries. But public, charitable, purpose trusts are exempt from the certainty of objects requirement; and the law only very rarely allows private, non-charitable, purpose trusts.

3 Or it could be said there is always a requirement of distributional certainty; but it is automatically satisfied in a trust for a sole beneficiary. I am indebted to Professor Richard Nolan for this insight.

4 Palmer v Simmonds (1854) 61 E.R. 704.

5 Only Tucker, L., le Poidevin, N. and Brightwell, J., Lewin on Trusts, 19th ed. (London 2015), para. 3.005, n. 27, seems to state the qualification at all; and does not note its potential for approaching “the bulk of my estate” differently today. (There is also a brief mention in Stevens, R. and Barr, W., Pearce & Stevens’ Trusts and Equitable Obligations, 7th ed. (Oxford 2018), 76.)

6 Choithram International S.A. v Pagarani [2001] 1 W.L.R. 1 (PC).

7 Ibid., at p.13.

8 McPhail v Doulton [1971] A.C. 424, 451 (HL).

9 The rule that an apparent gift, with an invalid trust mentioned afterwards, takes effect as an outright gift is usually called “the rule in Lassence v Tierney” (1849) 41 E.R. 1379; or sometimes called “the rule in Hancock v Watson” [1902] A.C. 14, 22, where Lord Davey's leading judgment contains a clear statement of it.

10 Knight v Knight (1840) 49 E.R. 58, 180.

11 Boyce v Boyce (1849) 60 E.R. 959.

12 Pensions Regulator v A Admin Ltd. [2014] EWHC 1378 (Ch), [2014] Pens.L.R. 319.

13 Pettit, P.H., Equity and the Law of Trusts, 12th ed. (Oxford 2012), who perhaps does most to separate out distributional certainty, is typical in treating it as part of certainty of property; admitting to the potential for confusion this causes (p. 51, note omitted): “This requirement of certainty of subject is somewhat ambiguous, because the phrase may mean that the property subject to the trust must be certain, or that the beneficial interests of the cestuis que trust must be certain.”

14 Although their use is not necessarily restricted to resolving distributional uncertainty in private trusts.

15 Under the so-called rule in Lassence (1849) 41 E.R. 1379 or Hancock [1902] A.C. 14 (HL).

16 Re Gulbenkian's Settlement [1970] A.C. 508, 522 (HL) (reported as Wisher v Stephens).

17 Gold v Hill [1991] 1 F.L.R. 54, 64.

18 Paul v Constance [1977] 1 W.L.R. 527 (CA).

19 The court did not discuss this aspect of its decision in detail. For analysis and approval, see McFarlane, B. and Mitchell, C., Hayton and Mitchell: Text, Cases and Materials on the Law of Trusts and Equitable Remedies, 14th ed. (London 2015), paras. 4.030–4.031.

20 Re Golay's Will Trusts [1965] 1 W.L.R. 969 (Ch.).

21 Ibid., at pp. 971–72.

22 The question is raised in Glister, J. and Lee, J., Hanbury and Martin Modern Equity, 21st ed. (London 2018), para. 4-005; and Haley, M. and McMurtry, L., Equity and Trusts, 4th ed. (London 2014), 75; both suggesting it would not be seen as certain. (However, contrast, for example, Parliament's insistence that the courts can identify a “reasonable” amount of capital in the Inheritance (Provision for Family and Dependants) Act 1975.)

23 Rowe v Prance [1999] 2 F.L.R. 787, 795 (Ch.).

24 Re Steel [1979] Ch. 218, 226 (Ch.).

25 Re Knapton [1941] Ch. 428 (Ch.).

26 Williams, G.L., “The Three Certainties” (1940) 4 M.L.R. 20, 24.

27 Saunders v Vautier (1841) 49 E.R. 282.

28 Hayton, D., Matthews, P. and Mitchell, C., Underhill and Hayton Law Relating to Trusts and Trustees, 19th ed. (London 2016), para. 8.22, would go even further and allow agreement to resolve uncertainty of property – that is, uncertainty as to the overall property designated for a trust – not merely distributional uncertainty as to beneficiary shares.

29 McPhail v Doulton [1971] A.C. 424, 457 (HL).

30 R. v District Auditor (No. 3), ex parte West Yorkshire M.C.C. (1985) 26 R.V.R. (DC). Garton, J., Moffat, G. and Bean, G., Moffat's Trusts Law: Text and Materials, 6th ed. (Cambridge 2015), 263 calls the decision “unsatisfactory” because not fully argued.

31 Emery, C.T., “The Most Hallowed Principle – Certainty of Beneficiaries of Trusts and Powers of Appointment” (1982) 98 L.Q.R. 551, 558.

32 Swadling, W., “Property: General Principles” in Burrows, Andrew (ed.), English Private Law, 3rd ed. (Oxford 2013), paras. 4.178–4.179.

33 Re Baden's Deed Trusts (No. 2) [1973] Ch. 9 (CA).

34 McKay, L., “Re Baden and the Third Class of Uncertainty” (1974) 38 Conv. 269, 276.

35 Ibid., at p. 279: “Should [a settlor's] ambitions be frustrated because he is prepared to leave those decisions to others who are more qualified and more experienced than himself?”

36 Harpum, C., “Administrative Unworkability and Purpose Trusts” (1986) 45 C.L.J. 391, 393.

37 I.M. Hardcastle, “Administrative Unworkability – a Reassessment of an Abiding Problem” [1990] Conv. 24, 25.

38 Re Gulbenkian's Settlement [1970] A.C. 508, 519.

39 Re Eden [1957] 1 W.L.R. 788, 795.

40 Moggridge v Thackwell (1803), 32 E.R. 15 (affd. (1807) 33 E.R. 350).

41 Riddall, J.G., The Law of Trusts, 6th ed. (London 2002), 174–76, dissects use of the proposition that “A charitable trust need not have certainty of objects”.

42 Re Delmar Charitable Trust [1897] 2 Ch. 163 (Ch.). By Charities Act 2011, s. 69, the Charity Commission has jurisdiction to establish a scheme, as well as the court. A scheme will seek to follow the settlor's intentions, so far as there is evidence from which they can be inferred: Henderson, W., Fowler, J. and Smith, J., Tudor on Charities, 10th ed. (London 2015), ch. 8, especially paras. 8.17–8.18.

43 Hoare v Osborne (1866) L.R. 1 Eq. 585 (Ct. Ch.).

44 Apparent distributional uncertainty may often be resolved, without the need for a scheme or an order for equal division, by implied authority given to the trustees to decide the matter, provided they act consistently with the intentions of the settlor, so removing the uncertainty; under the principle stated in A.-G. v Mathieson [1907] 2 Ch. 383, 394 (CA), approved in Shergill v Khaira [2014] UKSC 33, [2015] A.C. 359.

* Associate Professor of Law, University of Reading.

Keywords

THE THREE CERTAINTIES REQUIRED TO DECLARE A TRUST – OR IS IT FOUR? “DISTRIBUTIONAL CERTAINTY”

  • David Wilde

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.