The Three Certainties

THE 3 CERTAINTIES
Equity, Trust & Probate

WHAT DO WE LEARN?
➤ Introduction
➤ Rationale for the requirement
➤ What are the 3 certainties?
➤ Certainty of Intention/
Work
➤ Certainty of Subject Matter
➤ Certainty of Objects
➤ Conclusion

INTRODUCTION
➤ Necessary for the settlor to make it clear regarding that trust
was intended to established, what property is subjected to the
trust & who are the beneﬁciaries.
➤ Law developed in Knight v Knight, court stated that they would
not acknowledge that express private trust has been created if
the three certainties are not fulﬁlled. Except for charitable
trust.
➤ Encompasses, certainty of intention, subject matter and
objects.

WHAT IS THE RATIONALE?
➤ To protect the trustees.
➤ Trustees were put in position to deal with the trust
property. Example: Knowing what obligation is attached to
the office of trusteeship
➤ To help court in the process of adjudication.
➤ Example : To have sufficient guidance to what extent as tot
he settlor’s intention.
➤ Quah Eng Hock v Ang Hooi Kiam - Settlor must’ve intended to
create trust. Intention must be clear and unequivocal and
held that words indication the trust would suffice the
purpose. In other words, 3 certainties need to be present.

THE THREE CERTAINTIES.
A. Certainty of Intention/Words to create trust;
B. Certainty of Subject Matter;
C. Certainty of Objects.

CERTAINTY OF INTENTION/ WORDS TO CREATE TRUST.
➤ Settlor must show an intention to create trust.Thus, it must’ve
been intended to create a trust. Words used must be clear in
showing the presence of intention.
➤ Court will not count the imposition of a moral obligation -
Obligation binding in conscience alone
➤ Equity will look the intent rather than form. Hence, court will
prove the existence of intention through the words used in trust
deed/will.
➤ The word ‘trust’ - not essential. As long as the words used shows
intention to create trust, thus accepted.
➤ Re Kayford - Trust can be created without using the word ‘trust’/
‘conﬁdence’ / the like.

➤ No particular form is necessary in expressing trust - Kishbai v Jaikishan : Where the
testator agreed that no one would claim any money or money that should be paid for the
insurance policy to D of which he is the sole beneficiary. However, testator reassigned
the benefits to himself and at the same day assigned the same benefit to the plaintiff.
➤ Even there is the term ‘trust’ used, no guarantee that trust will be discerned - Midland
Bank v Wyatt : The husband has a new business and made a loan with bank. the
mortgage was at first under his name on his own house. However, later he had
intentionally changed the name of the house to his wife and daughter. When the bank
came for mortgage for the house due to failure of his business. He claimed that the
house was not his instead it was his’ wife and daughter. Court held that it was a sham.
➤ Case Reference : Lambe v Emes - Testator had left his property to his widow ‘ to be at her
disposal in any way she may think best for the benefit of herself and her family’. He then
left a property to an illegitimate child of the testator. Held was that the will was actually
a gift to the widow and not trust.
➤ Formerly, precatory words is construed to be trust. However, will be construed according
to the real intention of the testator.

➤ Whether precatory words would give rise in trust?
➤ Before : Court construed precatory words as trust. Now : Modern Court at liberty to
construed precatory word as trust if only satisﬁed that donor intended so.
➤ Re Hamilton - Testator left legacies to his 2 nieces and stated that ‘i wish them to
bequeath them equally between the families of X & Y as they consider right’ Held:
Since there is no obligatory words employed, the will considered as gift.
➤ Hameeda Vee v Seenivasagam - important to use clear & unequivocal language. In this
case, App does not discharge the burden placed upon her to prove the trust.
➤ Important to prove special importance is attached to the context which the word were
used if there is absence in documents : Jones v Lock - Father gave a child $900 in cheque.
He said that the cheques was for his baby and the father was going to keep the cheque
away for the baby. Six days later he died. It was found the cheque was in his possession.
Issue : Was the baby entitled for the sum? Held : The is no valid gift/ declaration of trust
as the court cannot perfect and imperfect gift. In addition, the cheque was invalid as it
was written under his name. Hence, gift invalid and trust cant be used to validate the
gift.

➤ Paul v Constance : Mrs. P lived with Mr. C as his wife to all appearance even unmarried. When
C received $960 of his settlement as personal injuries, C had deposited the money into an
account of C. C had frequently mentioned to P that all his’ money belongs to P. One day, C
died intestate. P claimed that all the money belongs to her. Court held: The term ‘trust’ is
not fatal to the findings of an express declaration of trust taking into account the
deceased’s intention and his relationship. The sentence which was frequently said to P was
sufficient to construe his’ declaration of trust.
➤ Intention must be genuine
➤ When there is no trust obligation, he/she must proceed in considering type of power
created by grantor. (Mere/ hybrid power?)
➤ Mere power - covers powers given to donee which need not to be exercise. thus no
obligation/ fiduciary duty to carry out the task.
➤ Classified into 2 - Personal power of appointment / fiduciary power of app
➤ Personal : Given to person who has life interest in property.
➤ Fiduciary : granted to individuals such as trustee. similar to personal but has
not obligation to distribute property & has to deal the matter in certain manner.

CERTAINTY OF SUBJECT MATTER
➤ Settlor must identify which subject matter can form the subject matter of a trust. if fails,
can’t enforce the trust.
➤ Settlor must be clear and certain of the property - moveable/immovable property. Thus
trust need to identify the trusted property. Fusing construction s.b v EON Finance Bhd.
➤ 2 requirements - i. certainty of what property is to be held upon trust & ii. certainty of
the beneﬁciaries.
➤ 1st Requirement - Certainty is important bcs it would lead to breach of trust if there’s
failure in dealing with the trust property. No trust will exist if subject matter not
ascertained.
➤ Case for what ‘property’ is to held on trust : Palmer v Simmonds - the sentence used were
ineﬀective to create trust. The word ‘bulk’ is subjective and no objective to it. This case
considered as conceptual uncertainty.
➤ Sprange v Barnard - A testarix left $300 to her husband for his sole use & at his death the
remaining part of what is lest is to be divided between my brother and sister…’Held : Not
trust for her husband but rather an absolute gift. There is no certainty of what could be
left to the brother and sister.

➤ Asha Bee & Ors v Mahomed Hashim & Anor - Testator gave a land and $400 to his executor for the benefit
of his wife and youngest son and to be spent on ‘kenduris’ for himself. Held that the trust were lacking
in certainty in the subject matter.
➤ Second Requirement - Beneficial Interest.
➤ Boyce v Boyce - On her death, several houses are to be convey. It stated that any one house should be
given to her daughter, which ever she chooses and the remaining will be given to B. A died before
she could make a choice. Court held that it was uncertain as to what particular house B should
receive. Thus trust is void.
➤ Where issue of uncertainty does not arise at all : Re Golay’ WT - Trust was established to provide a
reasonable income for Tossy, daughter of the Testator. It was held it to be certain as the court may
look on various aspects in determining the reasonable income. Eg; standard of living, expenses,
incomes, need and etc.
➤ Where it is vital to make reference in a fixed trust. Equity is equality will be applicable whenever
there’s an invalid trust. Burrough v Philcox - Trust was given for the benefit of settlor’s son and
daughter. Shares were not specified. Relying upon maxims the shares was divided equally.
➤ Maxim can only be invoked when there is no contrary to the intention. If the trust stated to
divide unequally, maxim can’t apply.
➤ In relation to discretionary trust, naturally in this typo of trust beneficial interest are never
certain. The essence is that trustees exercise discretion as to who is to get the benefit.

➤ Relation to ‘commercial matter’ : Re Goldcorp Exchange Ltd - Purchasers of bullion who had paid
and not yet taken delivery asserted proprietary rights on the insolvency of company. Claims
rejected on ground that legal title not yet passed nor there is no identifiable property to which
any trust could attach.
➤ MacJordan Construction Ltd v Brookmount Erostin - Employer would retain 3% of contract price as
trustee for the builder. The retention was never set up. Builder claimed entitlement to the
retention money on the employer’s insolvency. Held, claim failed bcs there was no identifiable
assets that could be impressed with trust for the builder. Only a mere contractual rights.
➤ Whether rule of segregation of subject matter applies to money, shares and etc? : Hunter v Moss
- Settlor (Moss) owned 950 shares in a comp. Declared orally that 50 shares to hunter. Moss
later sold 950 shares when comp is taken by another authority. The issue was whether is
hunter able to claim to the proportionate shares.Held, trust can still be valid even property is
not segregated provided that the shares were of the same class and in the same company,
there was no need in segregate 50 shares declaring the trust.
➤ Arguments : Will be serious prob if no segregation. Probably justifies on account of
promissory/proprietary estoppel. i.e Moss being estopped from breaching promise bcs hunter
had acted to his detriment. However, promissory can be used as shield not sword. thus
proprietary applicable as it is to restricted to landed property and not personal property.

CERTAINTY OF OBJECTS
➤ Beneficiaries must be certain/ clearly defined : Re Endacott - …in order to be effective, must have
ascertained or ascertainable beneficiaries.
➤ Must show who the beneficiaries are : Sale v More - the term ‘ near relation’ in the will does not create a
clear meaning. Thus, objects were not ascertain.
➤ In an absence of certainty of object although the other two certainty exists, it would lead to resulting
trust for the settlor since the trust could be void. However, in charitable trust, objects does not apply
since the AG can enforce the trust.
➤ 1. Fixed Trust - Settlor decides in advance the shares of each beneficiaries and the trustee has no power
to alter. Must draw out the complete list of the beneficiaries and if not fulfilled it will be considered as
void.
➤ IRC v Broadway Cottage Trust - Held that to administer the trust, the trustee have to list out a
complete beneficiaries at time of distribution.
➤ Malaysia position - Halsbury’s Laws of Malaysia - if trust require all division of classes, it would be
void for uncertainty if not possible to provide complete beneficiaries. As to the size of the equal
share can’t be ascertain unless the number of beneficiaries are not known.
➤ all in all, the trustee must make sure beneficiaries are conceptually certain. However, trustee
should advertise in newspaper regarding the trust informing the potential claimants. Also
evidential certainty need to be fulfilled, which enables specific persons to be identified as the
members of the class.

CERTAINTY OF OBJECT
➤ 2. Discretionary Trust : Trustee given the discretion as to who shall receive the benefit
from trust, and what amount shall they receive. In English Law, the position stated in
McPhail v Doulton - apply individual ascertainability test (whether the certainty given to
individual is ot is not a member of the class)
➤ Trust must fulfilled theses requirements -
➤ Conceptual certainty - Refers to linguistic expression. The class described should not
be wide enough as it will cause difficulties in identifying the class. Re Barlow - a trust
that benefits ‘old friend’. Court held it was not certain
➤ Administrative workability - members of class should be able to surveyed one by
one. McPhail v Doulton - benefits to ..all residents of Greater London. Held it was too wide in
ascertaining the trust.
➤ Class must not be capricious - If too capricious, void. Reflects a nonsensical
intention on part of settlor and precludes any sensible consideration by trustee.
➤ Malaysia position, applies the completely ascertainable test which laid down in IRC v
Broadway Cottage - Court mentioned that trustee must provide complete list of
beneficiaries. If unable to list, trust will fail.

CERTAINTY OF OBJECTS
➤ Whether a discretionary trust could be defeated by conceptual uncertainty? Eg; Old friends, shorter
employees etc have so many shades of meaning. Thus trust fails.
➤ But, trust can’t be defeated by evidential uncertainty. Eg; situation hard to trace the objects.
Uncertainty arises when there’s an absence of evidence to show who was the intended
beneficiaries. Re Wright’s WT - Trust which designed to benefit such people and institution as have helped
me/my husband. Held it was conceptually uncertain. Help could mean anything from helping the
testatrix across the road to save her from death or etc.
➤ Whether there’s exception to this doctrine? - Yes, gifts subjected to condition precedents. Re Allen -
when the testator left property to the eldest nephews ‘who shall be member of the Church of
England and adherent to the doctrine of the Church’ - gist was valid as there were precise meaning
of the conditions. It was perfectly possible for claimant to show that he fell within the terms
stipulated.
➤ Whether ‘conceptual uncertainty’ could be cured? - Yes, by a provision that such uncertainty
should be resolved by 3rd P. Re Jones - Whether X should at any time have a social / ors relationship
with Y in the uncontrolled opinion of the trustees decision? Settlor had adopted the meaning
ascribed by 3rd Party.
➤ Example; By having some formula for specific matters. Eg; devoted muslims? In order to know
who or what is the formula, the trustee must see the respective person (imam, in this eg).

The Three Certainties

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The Three Certainties