The Three Certainties
An express trust is only validly constituted if three certainties are satisfied: certainty of intention, certainty of subject matter, and certainty of objects.
1. Certainty of Intention
- The settlor must intend to create a legally binding obligation, not merely a moral expectation or wish.
- Precatory words ("I hope", "I wish") are insufficient: Lambe v Eames (1871) — words expressing a mere wish did not create a trust.
- No technical language is required provided the intention is clear.
2. Certainty of Subject Matter
- The trust property must be identifiable with precision.
- A declaration over an unidentified portion of a bulk (e.g., "some of my wine") fails: Re London Wine Co [1986] — no trust arose over unascertained bottles.
- Contrast Hunter v Moss [1994]: a declaration over 50 of 950 identical shares (intangible, fungible property) was held sufficiently certain — a significant distinction for intangibles.
3. Certainty of Objects
- Fixed trusts: the complete list of beneficiaries must be ascertainable — the complete list test (IRC v Broadway Cottages Trust [1955]).
- Discretionary trusts: the test is whether it can be said with certainty whether any given person is or is not a member of the class — the is or is not test (McPhail v Doulton [1971]).
- Powers of appointment: same "is or is not" test applies (Re Gulbenkian's Settlements [1970]).
- Administrative unworkability (a class so large as to be unmanageable) can still defeat a discretionary trust: R v District Auditor, ex parte West Yorkshire MCC [1986].
Common Traps
- Confusing the complete list test (fixed trusts) with the is or is not test (discretionary trusts) — examiners frequently swap the facts.
- Thinking precatory words automatically fail; the question is always the overall construction of the document.
- Assuming Hunter v Moss applies to tangible property — it does not.
Exam tip: Identify the type of trust/power first, then apply the correct certainty of objects test.