Equity and Trust Coursework

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  • Topic: Legal terms, Beneficiary, Trust law
  • Pages : 6 (1749 words )
  • Download(s) : 156
  • Published : December 29, 2011
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* The donor, Mr Chet died recently, and left directions in his Will to his executors relating to a couple of gifts. * This hearing relates to the execution of the will which have been causing difficulties. * The Executors have adopted a neutral stance between the competing claims, and with the Court’s permission have merely undertaken to abide by the Court’s eventual decision: as such they will not be represented in this hearing. * Clause 6: My trustees are to hold all of my shares on Trust for Zeke, except that for the period of 5 years after my death my Trustees are to give 1000 of my shares (or whatever lesser number my trustees think fit ) in whichever Company they shall think fit to any of my University classmates who ask for it and they in their discretion think fit.

I submit to the court that my client is the sole beneficiary under a fixed trust and as such owns equitable rights in the trust property. His interest should be given precedence over the gift which the testator purported to offer in the latter part of the clause. I also submit to the court that the 3 certainties required for a legally enforceable trust have been well observed in this trust instrument. My client wishes to invoke the rule established in Saunder v Vautier and have the legal title of the trust property transferred to him.

My submissions are supported as follows:

We must consider if the will has been properly drafted, having regard to the ‘certainty’ requirements of a well formulated trust instrument?

The general rule is that for a trust instrument to be held valid:

“...first...the words must be imperative...; secondly...the subject matter must be certain...; and thirdly...the object must be as certain as the subject"
(per Lord Eldon in Wright v. Atkyns (1823) Turn. & R. 143, 157).

Let us consider the Certainty of intention:

The wordings of the clause is sufficiently imperative….This is not simply because the testator used the word ‘trust’. Of course, it is well settled that a trust can be created without using the word ‘trust’ (Megarry J. in Re Kayford). However, there is no doubt that the testator could have possibly intended anything other than a trust for the benefit of Zeke. It is important that the court takes the will to construe and see what exactly was intended by the testator and give effect to it. An objective approach to each individual case was suggested by Lindley LJ in Re Hamilton [1895] (“take the will you have to construe and see what it means, and if you come to the conclusion that no trust was intended you say so”). This approach has been favoured by the court as subsequent cases have shown flexibility in judges’ approach to cases of ill-formulated trusts. I humbly suggest that the court closely construe the draft before us to determine the actual intention of the testator

As for the Certainty of subject matter:

Does the wordings ‘all my shares’ create ambiguity as to what shares were to be the subject matter of the trust? No it doesn’t. If there is any contention as to what is meant by ‘all my shares’, such contention is an artificial one. The word is one which is of general use and should create no controversy as to its interpretation. All simply means everything.

The requirement of certainty of subject matter is more or less paramount to the validity of a trust instrument. The orthodox approach is that the property which is intended to constitute the trust property is segregated from all other property so its identity is sufficiently certain. This rule is associated with the difficulty in identifying what property is to be administered in accordance with the terms of the trust. This problem may arise especially in complex situations when there are different classes of the same kind of property which are contested by different claimants.

The courts have taken different approaches to resolve this issue by distinguishing between tangible...
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