Certainty Of Intention Problem Question Essay

- Three certainties, constitution and formalities
- Terms of the trust and powers of the trustees: think carefully about what the terms of the trust are and what the trust actually entails, think about the different ways in which it could be understood. ALso think about what the trustees' powers are, if relevant.
- Breach: has there been a breach? To answer this you need to carefully consider the duties of the trustees and think about what they have breached any of those duties.
- Personal remedy against the trustees: Which trustees might be personally liable and why? What is the quantum
- Personal remedy against third partes: Might knowing receipt or an action for money had and received be available?
- Proprietary remedies: Is a proprietary remedy available? If so, are there any advantages to a proprietary remedy?

Of course, you need to use your discretion. In most equity questions, many of the above points won't be an issue; questions will generally be focused on certainties/formalities/constitution; terms, powers and breach; or remedies. But its a useful checklist to run through, there are often important points that people miss so do think about everything.

There will be additional issues where a resulting, constructive or Quistclose trust is involved, though even then I think you can break things down into the three fundamental questions of 1) where there is a trust, 2) what the trustees can do and what they can't, 3) remedies.

McDonald & Street: Equity & Trusts Law Concentrate 4e

Chapter 3: Outline answers to essay questions

The current approach to certainty of objects in discretionary trusts creates more uncertainty than it resolves. Discuss.

Introduction : the test for certainty of objects previously required a complete list of beneficiaries (IRC v Broadway Cottages). While the new test in McPhail v Doulton allowed more discretionary trusts to be upheld, the case law in this area remains uncertain and confusing.

McPhail v Doulton : clearly set out the test for certainty of objects, as per Lord Wilberforce. The test is the same as for fiduciary powers (Re Gulbenkian's Settlement).

Discuss whether Lord Wilberforce's reasons for applying the same test are convincing – should a trust for which it may not be possible to identify all the potential beneficiaries be valid?

Re Baden's Trust (No 2) : the court had to decide how to apply the test set out in McPhail v Doulton. A strong knowledge of the facts and differing reasoning of the Court of Appeal is vital if you are to answer this question well.

Discuss the differences between the approaches of Stamp, Sachs, and Megaw LLJ. The diversity of opinion within the court is indicative of the uncertainty of the test itself.

Discuss the advantages and disadvantages of each approach.

Discuss and illustrate the central idea of 'conceptual certainty'. How is it distinguished from evidential certainty? Do the different approaches in the Court of Appeal use 'conceptual certainty' correctly? (Emery provides an excellent discussion of these issues (see, chapter 3 key debates).)

Can conceptual uncertainty be cured? This issue highlights further uncertainty in the current approach to certainty of objects for discretionary trusts. Discuss the different reasoning adopted in Re Tuck's ST. Note: this is an issue on which textbook authors also disagree!

All of these issues are of particular importance to trustees, who may be held liable for breach of trust if they distribute property incorrectly.

Conclusion : draw together the points made. Reflect on the reasons for changing the test for certainty of objects for discretionary trusts – do the benefits outweigh any problems?

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