THE 3 CERTAINTIES
A legacy was left to a widow “in full confidence”
It is necessary that the settlor makes clear that a
trust was intended, what property is subject to
trust and who the beneficiaries are so that trust
can be enforced.
The 3 certainties are :
 Certainty of intention
 Certainty of subject matter
 Certainty of beneficiaries
 CERTAINTY OF INTENTION
- It is important that the settlor intends to
create a trust and not a gift/other device.
- Where the settlor signs a formal declaration of
trust in the form of a deed, then it is clear but if
the settlor leaves only a will behind, then it
becomes a question of construction
(interpretation).
- The words used must be clear and unequivocal
to show the intention of the settlor to create a
trust in favor of the beneficiary.
- The test is whether, on a construction of the
words used, and/or from the behaviour of the
parties, there is a clear intention that the
property is to be held on trust for the benefit of
a third party.
 Precatory words
- Words merely of ‘hope’ and ‘desire’
- The court is now looking for imperative words
that impose a mandatory obligation on the
trustee ( a moral obligation is not enough)
- The burden lies on the claimant to establish
the necessary intention on a balance of
probabilities.
Re Adams and the Kensington Ventry
There the gift was made “in full confidence that
she will do what is right as to the disposal
thereof between my children either in her
lifetime or by will after her decease”
Held : Mere precatory words which did not
impose a legal obligation on the widow (moral
obligation) . Hence, no trust was created in
favor of the children. The property was an
absolute gift to the wife.
In contrast, there are cases where that
contradict the rule which states precatory
words will not create a trust.
Comiskey v Bowring-Hanbury
That she would leave the propoerty on her
death to one or more of the testator’s nieces…
In default of any disposition by her thereof by
her will…I hereby direct that all my estate and
property acquired by her under this will shall at
her death be equally divided among the
surviving said nieces”.
Held : The initial words are precatory words;
they were in themselves ineffective to create a
trust. However, the trust document must be
considered as a whole in ascertaining certainty
of intention. The imperative wording of gift over
imposed a mandatory obligation upon the
widow to provide the property for the nieces as
the words show that the testator intends his
nieces to acquire some rights in the property.
The provision here made clear that the widow
cannot keep the properties for herself.
 Declaration of trust
- No special words are necessary to create a
trust and a trust may be found even when there
is no document.
- The intention can be derived from spoken
words or conduct.
Paul v Constance
Mr Constance’s marriage broke down and he
moved in with Ms Paul (mistress). Mr Constance
received some compensation for an injury at
work. He then opened a joint account in his sole
name. However, he intended that the money
should be shared with his mistress and he
repeatedly said that “this money is as much as
yours as mine”. On his death, Mrs Constance,
his wife, claimed all the money.
Held : Mr Constance had declared a trust,
informally of the account for himself and his
mistress.
 Absence of intention
- If there is no intention to create a trust, title to
the property may pass an absolute gift to the
donee.
Case : Re Adams and the Kensington Ventry
 CERTAINTY OF SUBJECT MATTER
- The settlor must identify what is to be the
subject of the trust and provide the means by
which the interest of the beneficiaries can be
ascertained.
- If not, the trust must fail because it cannot be
enforced.
Property can be classified into tangible and
intangible :
 Tangible : Can be touched (felt with
senses) e.g. Books, table, house
 Intangible : Cannot be touched (cannot be
felt with senses) e.g. Shares, chose in
action
It can further be classified into fungible and
non-fungible :
 Fungible : Same class/type
E.g. : Same class of shares
 Non-fungible: Different class/type
E.g. : Books of different topics & authors,
different class of shares.
Any existing property may be the subject matter
of a trust.
E.g: Land, personal goods, shares, cheques,
money, debts.
- Must be existing property - cannot create trust
over future or after acquired property.
- Mere expectation of inheriting a property
without certainty disables the property from
being the subject matter of a trust.
- It is different if the settlor will be owning a
property which is held on trust for him upon
him attaining certain age. This is not mere
expectancy. This is a property which is not yet
become vested in the settlor and is awaiting the
determination of some other prior interest. This
is considered as existing property since there is
certainty of him receiving the property.
 Tangible property
Re London Wine Co (fungible, tangible)
Re London Wine Co sold wine to various buyer.
However, where the wines are to be taken to
satisfy the various order is not known because
the seller has several warehouses. Buyer who
has paid for the wines were given a certificate
of title. Wine Co. Then become insolvent and
their creditors claim that the bottles of wine
belong to them. They buyers claimed that there
is a trust created over the bottles of wine for
them as there is intention to create a trust.
Held : The trust failed on 2 grounds
i. This is a generic sale, not ex-bulk (in order
for it to be an ex-bulk, every purchaser
must know which warehouse these wines
are taken from, here, the seller has not
indicated).
ii. It cannot be determine which bottles of
wine go to which purchaser, there is no
identifiability.
Since no trust can be established, the bottles of
wine become the property of the creditors, not
the paying buyers.
The court made it clear that even though the
bottles of wine were fungible, 1 bottle can be
replaced with another. They are not precisely
the same since some bottles may have inheret
defects (the cork may have been exposed and
some bottles may have cracked) without
allocating risk by identification. The customers
and sellers will never know who bear the risk.
 Generic sale - does not know the source,
no certainty of trust fund
Re Goldcorp
Gold bullion exchange enters into contract with
customers whereby it would buy gold and hold
the same in its depository for the client should
the customer ask for delivery at a later date. It
went into the practice of buying and holding
just enough for the daily needs of the customer
in breach of contract despite having taken their
money. The customers argued that the gold was
held on trust for them thus making them to rank
as secured creditors when the company went
into liquidation.
3 types of claimants :
i. Had their gold stored with the gold
belonging to the company
Held : The trust failed because this is generic,
not ex-bulk.
- It cannot be ascertained where the gold of
each customer is coming from
- There is no identifiability as to which gold go to
which customers
ii. Maple gold leaves here, the customers
offered to store their maple gold leaves in
their own safety boxes to be given to the
company but the company refused stating
that it is a waste of time as their gold box
is more secured.
Held : Trust failed, the same reason as 1 st
category. However, if the customers here have
utilised their own safety box, the trust would
have been constituted since it has become ex-
bulk.
iii. Walker-Hall claimants. The gold here is
seperately stored away from the
company’s gold and properly recorded,
every customer knows which gold bars
 were allocated to him.
Held : There is certainty of subject matter as this
is ex-bulk (there is identity.
Mixing of co-mingling of fungible , tangible
goods will defeat the trust.
Re Wait
Under the contract, the claimant had agreed to
purchase 500 tons of wheat from the defendant
and paid for it. The defendant had 1000 tons of
wheat. After receiving the payment but before
delivering the wheat to the claimant, defendant
became insolvent. The claimant claims that he
has the beneficial interest over the 500 tons of
wheat that he had paid for.
Held : The 500 tons wheat was not segregated
from the 1000 tons of wheat belonging to the
defendant. Hence, it cannot be ascertained for
sure as to which part of the wheat trust is
attached in favor of the claimant. The claimant
had only contractual rights for delivery of 500
tons of wheat and not equitable proprietary
rights.
In observation,
 Tangible and fungible : Requires
segregation
 Tangible and non-fungible : Does not
require segregation as it could be
differentiated and said for certain which
property belongs to who.
 Intangible property
Principle: Requires segregation
However,
Hunter v Moss
Mr.hunter was entitled, under his contract of
employment with mr.moss, to claim 50 shares
out of 950 shares in a particular company held
by his employer. Although this showed the
intention to create a trust, mr moss did not
identify which shares were the subject of this
arrangement. Mr moss later sold the 950 shares
and kept the proceeds of sale for himself.
Issue: Whether, in these circumstances, Mr
Hunter could assert beneficial rights over 50
shares under a trust.
What would be decision if the orthodox rule for
tangible assets is applied here?
There would be uncertainty of subject matter as
there has been no segregation of the 50 shares
from the 950 shares. The decision would have
been against Mr Hunter.
Held : There was a valid trust created over the
50 shares in favor of Mr Hunter sicne the shares
were essentially identical and indistinguishable,
any 50 shares in the company were capable of
forming the subject matter of the trust.
Note: If Mr Moss held shares in a range of
companies, the lack of specification as to shares
from which company would have prevented the
existence of an inter vivos trust.
Here, intangible and fungible - no segregation is
required as it can be any specified number of
shares from the whole. If the settlor holds
shares in various companies, even if same class,
he must specify share from which company is to
be given. Otherwise, the trust runs the risk of
failure. This is because the trustee has only legal
title over the specified property subject to the
trust and if he cannot know which property is
that (intangible-not segregated) how can he
distribute?
Hunter v Moss did not overrule Re London Wine
but it only distinguishes the distribution of
chattels in a will and declaration of trust over
shares.
Re Harvard Securities
Dealer in financial securities under the contract
held securities on bare trust for his clients.
Issue : The securities bought not numbered (in
large quantities)
Held : There was certainty, though not
identifiable, buyer knows the quantity of shares.
 Follows Hunter v Moss, does not need
identification
ESPL v Radio of Engineering
A series of contractual involving electrical
engineering works from DBKL. The contractual
requirement of the subcontracts is to placed the
money in the bank account (trust fund). This
oney belonging to the contractors and
subcontractors were co-mingle in this account.
Issue : Is there a trust formed?
Held : According to Hunter v Moss, trust is
formed. Does not need to segregate and
identify which money belongs to who.
Malaysia’s position
The law has not been decided but there was
obiter dicta by Gopal Sri Ram that Malaysian law
should follow the cases of Re London Wine and
Re Goldcorp.
- Not decided to follow conclusively.
- Persuasive, not binding
 CERTAINTY OF BENEFICIARIES
- There have to be beneficiaries (objects of the
trust) who are capable of being rendered
certain.
- This is because there has to be someone to
enforce the trust.
General Requirements :
i. There must be human beneficiaries
(except for charitable trust).
ii. Beneficiaries must be individually
identified such as “Jane”, “John” Or must
be identified as a member of a clearly
defined class such as “to hold on trust for
the benefit of my children”.
Re Txu Europe Group Plc – Trust can be held for
a group/class of beneficiaries but the objective
must be clear.
 Evidential and Conceptual Uncertainty
- The description of beneficiaries must be
conceptually certain at the time that the trust is
created.
- This refers to linguistic expression as regards
the class that is to benefit.
Re Barlow
Testatrix gave an option to any of her “ family or
friends” To purchase her valuable paintings at
prices quoted in catalogue five years before her
death which are significantly low prices.
Issue : The term “old” Or “friend” Have so many
shades of meaning that it was impossible to say
who was intended to benefit.
Held : This should not defeat the gift/trust
created for those who could satisfy the criteria
of the class above.
Applied the test in Re Allen, that defined
“friends” As people who would clearly fall
within the class of friend (people who had a
long relationship with the settlor based on
social contact rather than business) and held
that anyone who could prove that he was the
family member or friend of the testatrix would
be entitled to benefit the testamentary
provision/establish a trust.
Spafax v Dommett
A trust was established in favour of
“customers”.
Held : Trust was invalid. Although accounts and
records could be introduced to show who had
dealings with the settlor, it was unclear what
was actually meant by the word “customer”.
For example, it might refer only to those who
had made a purchase or it might embrace those
who had merely been browsing and had never
bought a thing (visitors).
 Fixed Trust
- Where the interests of the beneficiaries are
specified in the trust instrument, the courts take
a strict approach.
- The trust is void unless each and every
beneficiary is ascertainable.
↓
THE COMPLETE LIST TEST
- It is known as the complete list test whereby
there can be no distribution or division unless
all beneficiaries are known.
- The trustee must be able to draw a
complete/exhaustive list of beneficiaries before
the trust properties could be distributed.
- If the trustee is unable to draw a complete list
of the beneficiaries entitled under the trust, the
trust shall fail for uncertainty of object.
OT Computers Ltd v First National Tricity
Finance Ltd
OT company instructed its bank to open two
separate accounts for the payment of customer
deposits and money owed to “urgent suppliers”.
Held :
 Customers – identifiable in the context of
payments made by them to the company.
A complete list of beneficiaries could be
drawn up. Hence, the beneficial interest
over the account for customers has passed
to the customers. Trust valid.
 Suppliers – unidentifiable because of the
term “urgent” – a complete list of suppliers
who fall under this category could not be
drawn up – hence uncertainty of object
and the beneficial ownership over the
account for suppliers remained with the
company. Trust void.
 Discretionary Trust
- The trustee is given the discretion to select,
from among a specified class of beneficiaries,
who will benefit under the trust and often when
and to what extent.
- Discretionary trust may include a class of
beneficiaries such as employees and
dependants.
Mc Phail v Doulton
A discretionary trust was established to provide
benefits for the staff of Matthew Hall & Co Ltd,
their relatives and dependants.
Issue : The object of the trust, therefore, were
so numerous and wide-ranging that it was
impossible for the trustee to draw up an
exhaustive list of potential beneficiaries.
Held : In considering the certainty of beneficiary
the test of Re Gulbenkian is applied for
discretionary trust namely if it was possible for
the trustee to say whether a postulant is or is
not within the class of beneficiaries, then the
trust power is valid. If it is impossible, then the
tust power fails. Here, relative could be
rendered certain if it meant “descendants of a
common ancestor”.
The House of Lords held that it was no longer
necessary to have a complete list in relation to
discretionary trusts. The less strict “class test”
was instead be applied.
The issue remained as to whether the class test
was to be rigidly applied?
Re Baden
The major stumbling block concerns the
question as to how can a trustee prove that a
particular person is not, for example, a relative
of an employee?
3 Judges’ Opinions :
 Stamp LJ
- The class test was to be applied literally.
- It can only be satisfied when it could be said of
any given postulant that he is or is not a
member of the class.
- “Validity or Invalidity is to depend on whether
you can say of any individual is or is not a
member of the class…” - to determine the
range of objects or possible beneficiaries.
 Sachs LJ
- Adopted a more liberal view and stated that it
was up to a claimant to prove positively that he
is within a class.
- If he fails to do so, then he is regarded as
falling outside the class.
Criticism:
- It may uphold the discretionary trust even if
only one beneficiary can be proven to be within
the class.
- This would not have been the settlor’s
intention when he stated a class of
beneficiaries.
 Megaw LJ
- Rejected the strict approach.
- It sufficed that the trustee could say, as
regards a substantial number of beneficiaries,
that they fell within the scope of the trust.
- This would be so even where there were
others about whom it could not be said with
certainty whether they were in or outside the
class.
- Accordingly, it does not matter that there is a
category of “don’t know”.
- This approach overcomes the possibility of
there being only one beneficiary under a
discretionary trust.
 Administratively Unworkable Trusts
- This is to do with the numbers of potential
beneficiaries.
- Lord Wilberforce in Mc Phail v Doulton
acknowledged that a class of beneficiaries might
be, “so hopelessly wide as not to form
“anything like a class” So that the trust is
administratively unworkable or …One that
cannot be executed”.
- The class would be too extensive for the
trustees to perform their duties and for the
court to enforce the beneficiaries’ claims if the
trustee’s failed in those duties.
- In short, where the concept is certain, the
beneficiaries are ascertainable and can prove
themselves to be within the group but the
group is too tedious that its impossible for the
trustees to perform their obligations then the
trust is declared invalid (Mc Phail v Doulton).
R v District Auditor Ex P. West Yorkshire
Metropolitan County Council
An attempt was made by the council to benefit
in specified ways “ any or all or some of the
inhabitants of the county of West Yorkshire”.
Held : The discretionary trust failed because the
class consisting of approximately 2.5 million
people, was far too large to be workable.
Re Hay
A trust to benefit anyone in the world would be
ineffective.
 Capriciousness
- For a trust, the disposition must be sensible
and rational.
- Hence, a trust is void if it is capricious or non-
sensible and precludes any proper consideration
by the trustees.

Brown v Burdett
The trustees were directed to block up the
doors and windows of a house for 20 years –
the direction was undeniably capricious in
nature.

 Ascertainability
- Difficulty on finding the beneficiaries like
death/moved abroad etc.

Re Benjamin
- Mere difficulty in ascertainment is not of itself
fatal to the validity of gift, it is only when one
reaches a difficulty that is so great and thus
incapable of resolution that the gift is void for
uncertainty.
- Thus ascertainability will not invalidate a trust
unless the trustee’s obligation is so difficult to
perform that the trust is invalidated.