Equity and Trust

The law in relation to the validity and enforceability of trusts under the general principles of Equity and Trust is not altogether straightforward . The general view taken by the court is that once the intention of a founder of a trust is determined , the courts will attempt to enforce the trust provided the declaration of trust complies with the substantive and procedural provisions of both statutory and common law This can be a complicated exercise as there are a number of circumstances and facts that guide the court and each case is determined [banner_entry_middle]

br by its own facts . As a result there is no uniform set of rules capable of general application

As often happens , the applicable standards in one case may be obsolete in another case . Therefore , ascertaining the validity and enforceability of a declaration of trust can be an onerous task . Jack ‘s attempt to create trusts is no exception as will be borne out in the preceding passages

To start with , in for a trust to be a completely constituted trust the declaration of trust must contain three certainties . The three certainties are certainty of subject matter , intention and objects

Jack ‘s intention can be discerned by the words used in his will and in his oral communications . It is obvious that he intended to grant wide discretionary powers to his trustees as to the distribution of his antique furniture although his oral instructions were more specific According to the Chancery Division , of the three certainties intention is the most significant and important one . Once it is established to the satisfaction of the court that the donor had the required intention , the court will most likely validate the trust

Jack left no doubt as to his intentions to create a trust and his intention for the trust to be carried out . It is assumed that his will identified his trustees to whom he bequeathed antique furniture with instruct instructions to distribute among his friends after permitting his four best friends to choose one item first . There is no difficulty here in the construction of Jack ‘s intentions to create a trust Equally there is no ambiguity in Jack ‘s will as to the certainty of subject matter

Although it is not possible to create a complete list of the objects of the trust , the ruling in McPhail v Doulton will apply to this bequest and render the trust valid despite the somewhat uncertainty of objects

Prior to McPhail v Doulton , in for the requisite certainty of objects to be satisfied the clause identifying the objects in the trust instrument was required to be such that it was possible for the trustees to make a complete list of all the designated beneficiaries . This mechanism was commonly referred to as the `complete test

However , the House of Lords in McPhail v Doulton , made a brave departure from the application of the `complete test . The House introduced what became known as the `in or out ‘ test . Lord Wilberforce said… [banner_entry_footer]