Must determine whether the trust in question is;

(1) Fixed trust

- All beneficiaries have an interest in the trust property
- Trustee must distribute the trust property to all the beneficiaries in the
proportion fixed by the settlor, or, in default, equally
- Trustee has NO discretion in deciding whether to distribute the property or not
- Failure to do so: breach of trust

(2) Discretionary trust

- Trustee must distribute the property, but he has discretion as to whom among
the possible beneficiaries will or will not benefit from the trust, as well as the
extent of their benefits. [To whom? How much?]
- It is possible that some of the beneficiaries might not ultimately receive any
benefit under the trust.

(3) Power of Appointment (fiduciary mere powers)

- Power given by settlor or testator (the “donor”) to another person (the ‘donee’)
(who may or may not be a trustee) to distribute property subject to the power
amongst an identifiable class of persons (the “objects of the power”)
- **The donee is not obliged to exercise the power. He has a discretion
whether to exercise it or not. He can also choose whether to distribute
to any of the objects of the power or not

The distinction between discretionary trusts and mere power is irrelevant: difficult to
determine
- For each of these categories, its beneficiaries/objects must be conceptually
certain

Types of Uncertainty of Objects

MOST IMPORTANT
- Conceptual uncertainty
- Administratively

NOT SO IMPORTANT
- Evidential
- Ascertainably

● Evidential and Ascertainable uncertainty will not render the trust void
● Conceptual and Administrative Workability renders the trust void for
uncertainty of objects

Conceptual Uncertainty
- uncertainty as to the beneficiaries under the "trust"
 - meanings of the words used in the trust or power to describe the intended
objects are unclear. Examples;
● the words used are unintelligible
● settlor has used some technical terminology which the trustee cannot
decipher
● the words are familiar but so vague as to be incapable of effect

“RM 2 million for people who have been kind to me” would fail for conceptual
uncertainty
● note: properly construe the words used, taking into account of the facts in the
case to determine if there is conceptual uncertainty

Class of Objects - by description

(i) Friends

Brown v Gould
- Friends: uncertain
- "Friendship... is a concept with almost infinite shades of meaning.” Where the
concept is uncertain - the gift is uncertain

Re Barlow (1979)
- Friends” conceptually certain
- Court may decide who is a friend on any reasonable basis: there are
acquaintances of a kind so close that, on any reasonable basis, anyone
would treat them as being 'friends

Minimum requirement of friendship

- Long standing relationship
- A social relationship (not a business/professional one)
- Met frequently (when circumstances permit)

Note: motive for finding certainty of concept (of friendship) in this case) was to
validate the gift and thereby give effect to the settlor’s intention

(ii) Relative

McPhail v Doulton [1970]

- The term ‘relative’ could be rendered certain by interpreting it to mean
‘descendants of a common ancestor

Re Baden (No. 2) [1973]

- Stamp LJ: ‘relatives’ should refer to ‘statutory next-ofkin’ rather than
‘descendants of a common ancestor’
Administrative Unworkability
- This refers to the situation where the class of conceptually certain
beneficiaries is so large that the trust or power could not be administered
sensibly by the trustees or donees
- impracticable for the trustees or donees to carry out the settlor’s wishes

McPhail v Doulton [1970]

- If a trust [or power] is administratively unworkable, it would be invalid, even if
conceptually certain

R v District Auditors ex p West Yorkshire CC (1985)

- a trust power which would have had the effect of including within its class of
beneficiaries 2.5 million people in West Yorkshire was held to be
administratively unworkable so the power was void

(1) Disposition: Fixed Trust

Complete List Test

- Inland Revenue Commissioners v Broadway Cottages Trust [1955]
- For a fixed trust to be valid it must be possible to compile “a complete and
exhaustive enumeration of all the persons then qualified for inclusion in the
class of "beneficiaries" under the terms of the [trust]
- it must be possible to ascertain every single beneficiary of a fixed trust (if not:
void for uncertainty of objects)
- DRAW UP COMPLETE LIST OF BENEFICIARIES

Reasons for “the complete list”

- Re Gulbenkian’s Settlement Trusts [1970]
- Suppose the donor directs that a fund be divided equally between "my old
friends." If the donor doesnt provide some sort of definition for that class of
beneficiaries: (CONEPTUAL UNCERTAINTY)
- They cannot claim the whole fund…unless they prove they are the only
members of the class,

Summary
1. class of beneficiaries MUST be conceptually certain.
2. list of all beneficiaries is required.
3. there must be evidential certainty.
4. Ascertainability will not cause the fixed trust to fail. So long as the beneficiary can
be identified, the trust will not fail if his whereabouts are unknown.

*OT Computers Ltd v First National Tricity Finance Ltd [2003]

 - “urgent suppliers” was too vague to define any class of beneficiaries

(2) Dispositions: Fiduciary Mere Power

● Clause 3 of Sam’s trust instrument provides – “My residuary estate on trust for my
widow for life with power to dispose of it amongst my children and grandchildren as
my trustee, T, thinks fit (discretion) and in default of appointment, to be divided
amongst my children equally.”
● Clause 2 of Sam’s trust instrument provides – “I give to my trustee, T, RM100,000 on
trust for my grandchildren so that T shall divide the RM100,000 between any of my
grandchildren in any way as he sees fit.”

● Clause 3 is an example of an FMP whilst Clause 2 is an example of a DT

IS OR IS NOT TEST
Re Gestetner’s Settlement [1953]
- any given postulant test

Re Gulbenkian’s Settlements [1970] - main case

- Is or is not test
- If it can be said of any given postulant that he is or is not within the class of objects of
a fiduciary mere power, the power is not void for uncertainty
- Reason for the test: They are given an absolute discretion. So, if they decide in good
faith at appropriate times to give none of the income to any of the beneficiaries the
court cannot pronounce their reasons to be bad. And similarly, if they decide to give
some or all of the income to a particular beneficiary the court will not review their
decision.”
- Not all beneficiaries are entitled to the trust property: since it’s based on who the
trustee picks

(3) Disposition: Discretionary Trusts

IS OR IS NOT TEST
- McPhail v Doulton [1970] - applied the test in Re Gulbenkian’s Settlement Trusts

Interpretations = Is or Is Not test

The strict interpretation - the trustees must consider whether or not any hypothetical,
possible postulant would either fall clearly within or outside the class. The shortcoming of
this interpretation is that the trust will fail if it is theoretically possible to be unsure of even
one person within the class of objects satisfying the test
Alternative interpretation (Re Baden No.2) - burden of proof is on the person claiming to
be a potential beneficiary under the trust
- a question of fact to be determined on evidence whether any postulant has on inquiry
been proved to be within it

***Re Barlow’s Will Trusts (1979) - series of conditional gifts (condition here: to
fall within the class of beneficiaries) - when there is limited property
- Testatrix directed her executor to allow “any member of my family and any
friends of mine who may wish to do so to purchase any of such picture” at an
undervalue
- It becomes unnecessary to draw up a full list when (i) the quantum of the gift
to any qualified person is fixed – in this case one painting for each ‘friend’ who
comes forward to buy one painting – (ii) there is a limited number of paintings
available for purchase.
- The gift was “a series of [conditional] individual gifts to persons answering the
description 'friend
- The effect of cl 5(a) is to confer on friends of the testatrix a series of options to
purchase
- "The disposition does not fail for uncertainty… anyone who can prove that by any
reasonable test he or she must have been a friend of the testatrix is entitled to
exercise the option.”

RESOLVING THE UNCERTAINTY OBJECTS

1. Express definition of the concept concerned (e.g. the trust instrument will set out a
restricted meaning of ‘friends’ or ‘family’ or ‘relatives’);
2. Empowering an independent third party to decide who falls within the class of objects;
3. Empowering the trustee to decide who falls within the class of objects;
4. Giving trustee power to appoint property to anyone he deems fit.

Independent Third Party - certain

Re Tucks Settlement Trusts (1978)
- Decision of chief rabbi in was to be conclusive as to who fell within the class of
beneficiaries: an approved wife

Trustee Decides - uncertainty of concept (conceptual uncertainty)

- Re Coxen [1948]: such a provision is ineffective

Unfettered power of appointment to trustee

● to anyone whom the trustees consider appropriate
● Blausten v Inland Revenue Commissioners [1972]
● If the class of persons to whose possible claims [the trustees] would have to give
consideration were so wide that it really did not amount to a class in any true sense
at all no doubt that would be a duty which it would be impossible for them to perform,
and the power could be said to be invalid on that ground.”
● (i) although there may be conceptual certainty: possibility of administrative
unworkability; ii how can the court possibly decide whether or not such a power has
been properly exercised by the trustees