Equity and Trusts: The three certainties

Résumé du document

Equity and Trusts: The three certainties, dissertation en anglais



The respect of the rule of the three certainties and formalities are compulsory in order to constitute an express trust. However it might sometimes lead to harsh results hence the eventual neglect of those rules by the Court. The statement we have to discuss here, questions whether the goals of Judges should be primarily to promote and protect justice and fairness or whether they should rather focus on certainty and transparency.

Extraits

[...] Judges primarily seek to ensure that a just result is achieved. They do it through making sure that formalities and the three certainties are present before constituting an express trust. Those are precisely the instruments of fairness. Knight v Knight (1840) 3 Beav 148 at 180 IRC v Broadway Cottages (1955) Ch 20, (1954) 3 All ER 120 We can also talk about trust powers here for they bear similarities. A trust power is something that appears as being a power at first sight but is actually a trust. [...]

[...] If s 53 had applied, Vandervell's transaction would have been ineffective but he would have been compelled to pay heavy tax on the share dividends paid to the trustees for the children. We can therefore conclude that the court was looking for a less harsh outcome in favour of the claimant. Nevertheless the statement that the court has been too willing to disregard the respect of the three certainties and formalities seems to make little sense. Such behaviour from the court has proved to be quite rare. In fact it is through those means that the court can ensure fairness. [...]

[...] If his nephew decides to become a solicitor, he will not be entitled to the shares. A gift subject to a condition subsequent means that the aunt can decide to give him the shares before he becomes a barrister but if after having received the shares he decides to change career, he will have to give back the gift. If there is no certainty of object, it will amount to a resulting trust; the property will go back to the settler[10]. [...]

[...] But the trustees may or may not use them. It is not an obligation. Therefore, unlike Fiduciary powers, the beneficiaries in case of mere powers cannot ask the court to compel the trustees to consider whether or not to exercise them. See Vandervell Vandervell v IRC (1967) 2 A.C concerning the option to repurchase the shares Mascall v Mascall (1984) 81 LSG 2218; (1984) 50 P&CR 119, CA Vandervell v IRC (1967) 2 A.C Grey v IRC (1960) AC 1 Vandervell's Trust (Number (1974) Ch (Court of Appeal) One has to precise that the Vandervell series of cases has been pretty long and both parties and the court wanted to get rid of the matter for good. [...]

[...] Concerning fixed trusts, there must be no room for doubts. All beneficiaries have to be clearly identifiable according to the case of IRC v Broadway Cottage Trusts[2]. The settler does not give any powers of appointment to the trustee; he specifies everything in the trust instrument. However, a trust is not void if we cannot find the beneficiary or if we do not know whether he is still alive. Research will be done in order to enforce the trust. The position is different for discretionary trusts[3]. [...]