EXPRESS TRUSTS

T deliberately created expressing intention of Settlor.

A. THE ESSENTIAL ELEMENTS OF AN EXPRESS TRUST
1. 3 certainties:
a. Intention
b. Subject matter
c. Object (Ben)
2. Full constitution OR supported by valuable consideration
3. Created/evidenced in writing: if stat requires s23C(1)
4. No latent flaws (eg. T incapacity, illegality of Trust).

Ben Principles - Leahy v. A-G (NSW) (1959) 101 CLR 611; [1959] AC 457
Object must be either HUMAN individual(s) or charitable purpose.

B. THE THREE CERTAINTIES

Knight v. Knight (1840) 3 Beav 148

1. CERTAINTY OF INTENTION TO CREATE TRUST

(a) Uses Words of Precation:
Words expressive of a confidence/belief that P1 (possibly T) will use Prop for benefit of 3rd party.
ISSUE: words of prayer/entreaty/recommendation/desire/hope (not direction!) suff strong to
evidence intention to create T? Matter of constructions.
Construction:
o take the will and see what it meansalthough previous judges have said the contrary on
some wills more or less similar to the one which you have to construe: Re Hamilton [1895]
2 Ch 370 consider the will itself and its own context.
Gunter v Commissioner of Stamp Duties (1932): I desire in context T.
CF RE Conolly [1910]: I specially desire no T.
THUS: it is a question of construction of instrument in EACH case.
Presumption:
o PREV: if Prop/Objects certain words presume to raise trust: Cary v Cary (1804)
o 19th C: presumption discarded words taken as request
Mussoorie Bank v. Raynor (1882) 2 App Cas 321: Prop to widow feeling confident
that she will act justly to our children in dividing the same when no longer required
by her. HELD: no T. Cf Lambe v. Eames (1871) LR 6 Ch 597
o NOW: precatory words NEUTRAL: Comiskey v Bowring-Hanbury [1905] per Lord Davey
Re Williams [1897] 2 Ch 12.
In each case, the whole will must be looked at.
Unless it appears from whole will that obligation intended no oblig.
Once construed as creating Trust has same effect etc of a Trust created by imperative language:
Re Williams [1897] 2 Ch 12.
o FACTS: Will to W with words in the fullest trust and confidence that she will carry out my
wishes in the following particulars. Partic pay premiums for her life insurance, then leave
that money in her will for their daughter.
o HELD: W take estate absolutely not confined by any condition/trust.
No need to use legal terms.

(b) Illusory T
Use of word trust is illusory need to look at the actual context of the word.

1
 Dean v. Cole (1921) 30 CLR 1: W and another appointed joint Execs. W given estate subject to will
conditions trusting that she willdivide in fair, just and equal shares between my childrenall
such part and portion of my estate as she may be in the use and enjoyment of.
o ISSUE: trusting that she will T?
o HELD: no T mere expression of Hs confidence in W.
If ambiguous look at context.
Context previously stated that estate be at Ws absolute disposal.
o Commissioner of Stamp Duties v. Jolliffe (1920) 28 CLR 178: HC held opening trust account as a
trustee does not prevent J from arguing NOT a T (no intention)
all the relevant circumstances must be examined in order to determine whether the
depositor really intended to create a trust
o Kauter v. Hilton (1953) 90 CLR 86: bank account, Ben given passbook and consulted that she was
beneficial owners T.

2. CERTAINTY OF SUBJECT MATTER (PROP)

Gen: any prop can be on T, except unassignable Prop (need to assign to put on T)
o Need to identify the Prop
o Need to identify the quantum of the Prop.
BUT contract of personal skill/confidence can be on T: Don King Inc v. Warren [2000] Ch 291
Uncertainty examples:
I give the bulk of my estate.. : Palmer v. Simmonds (1854) 2 Drew 221:
Leave 1K to A and if A die, anything remaining to go to B. what remains of it: Sprange v Barnard
(1789)
F with 2 daughters. 4 cottages to Ds on T. D1 get whichever prop she may feel proper to use. D2 to
get left over. But D1 died before selection: Boyce v. Boyce (1849) 16 Sim 476:
Undifferentiated parcel of share: Herdegen v Federal Commissioner of Taxation (1988)
Deposit in a bank account: Re Applebys Estate (1930)
An objective determinant (criterion):
Ct may find obj criterion in facts to interpret uncertainty away.
Re Golays Will Trusts [1965] 2 All ER 660:
FACT: left prop to Exec. Direct to give X Prop interest in 1 Prop for life + reasonable income from
other Props for life.
HELD: Exec can choose 1 Prop for X to live. Reasonable income can be obj determined between
T and X or by Ct.
Knight v. Knight (1840) 3 Beav 148
FACT: to reward very old servants and tenants according to what they deserve.
HELD: uncertain.
LAW: if doc is unintelligible or have too many meanings Ct will not intervene to invent or prefer
1 meaning over another.

3. CERTAINTY OF OBJECT (BEN)

Must be a person, group of persons, charitable purpose.
Fixed or Discretionary?
If FIXED express T (fixed Ben) form of T doc must identify Ben with suff certainty
If DISCRETIONARY express T (T choose who Ben will be) must identify class of ppl and
selection criterion with suff cert.
Types of uncertainties
(i) semantic uncertainty
Uncertain wording: Ct must be able to determine from DESCRIPTION in T, if person X is within
class or not.

2
 Eg. my old friends is uncertain: Re Gulbenkians Settlements (1970) but my relatives or my
dependents is sufficient: Re Badens Deed Trusts (No 2) (1973)
(ii) administrative uncertainty
Description of range clear, but TOO WIDE that it cannot form a class (too hard to supervise/enforce)
Eg. all the residents of Greater London: McPhail v Doulton (1971)
(iii) evidential uncertainty
Evidence unavailable to identify potential Bens. But will not invalidate T itself (Ts can go to Ct for
help): McPhail v Doulton (1971)
Eg. any resident of Sydney who visited Brazil in December 2004.

Discretionary T Bare powers and Trust powers?

Re Leek Decd [1967] 2 All ER 1160; [1968] 1 All ER 793
BP: T may/may not exercise power to select. No obligation to select anyone.
TP: obliged to choose Ben out of class, but discretion as to who. Ben can demand selection, but not
of himself.
Gartside v. IRC [1968] AC 553:
TP Ben have better rights than BP Ben right to be considered by T, right to compel T to exercise
power properly.
Hourigan v. Trustees Executors and Agency Co Ltd (1934) 51 CLR 619
Identify power as either BP or TP matter of constructions.

Tests for BP and TP

Re Gestetner (Decd) [1953] Ch 672:
TP test (list certainty): more severe has to make list of all members of identified class before
selecting.
BP test (criterion certainty): identify class with suff certainty for Ct to determine if X is member of
that class.
Re Gulbenkians Settlement Trusts;
FACT: G set up T for ppl who assisted his disabled son. 1 ppl who were friends or befriended his
son. 2 past employers of son.
o 1 HELD: FAIL definition of friend and how to track them list certainty impossible.
o 2 HELD: WIN possible to list individually list certainty possible.
Upjohn: affirmed Re Gestetner 2 tests.
ENG HOL: criterion certainty is test for BOTH BP and TP.
Aus: not yet accepted this view.
Re Badens Deed Trusts; McPhail v. Doulton [1971] AC 424
Affirmed Re Gulbenkians
Lord Wilberforce in McPhail suggest extra class certainty test class cannot be impossibly wide.
o Mean all Bens must have common characteristic?
Mean Bens must be readily identifiable, numerically and geographically discrete grouping?
o Mean workability criterion?
Re Manistys Settlements [1974]
FACT: T appoint class of ben, exclude certain persons from class, absolute discretion to declare any
person etc. as within class.
Templeman J: Lord Wilberforce class certainty does not apply to BP.

Australian State courts: approach to Re Badens Deed Trusts:

Accepted/applied Re Badens: Horan v. James [1982] 2 NSWLR 376
West v. Weston (1998) 44 NSWLR 657

3
 FACT: will debt, funeral expenses, 10% estate to Exec. Exec to divid balance equally among any
living (at time of death) and 21+ relatives from his 4 grandparents. Over 1600 possible Bens found
uncertain that all were identified. Exec used searches, genealogist researches.
ISSUE: class certain? No. Quantum certain? No.
HELD: new test per Young J:
The rule will be satisfied if, within a reasonable time after the gift comes into effect, the court can
be satisfied on the balance of probabilities that the substantial majority of the beneficiaries have
been ascertained and that no reasonable inquiries could be made which would improve the
situation.

Trusts for Unincorporated Associations:

Eg. religious groups, bowling clubs, trade unions, sporting associations.
Issues:
o UA has no legal status cannot hold Prop.
o If T to benefit present and FUTURE member object unascertainable/uncertain
o T would be non-charitable purpose T object not person or charitable purpose
Exception 1: charitable trust if purpose of UA is charitable
Exception 2: gift to present members to take effect immediately
o Presumption: disposition to UA is absolute gift to existing members
o Can be rebutted by evidence of intention to benefit present or future members or if gift
for non-charitable purposes of UA.
Exception 3: gift to present members to hold as JTs and subject to rules of association.
o Still allows gift to be saved and used for UAs purposes members contractually bound
by rules and must use funds consistent with it.
Leahy v. A-G (NSW) (1959) 101 CLR 611; [1959] AC 457
Cts start with presumption that it is absolute gift to existing members, then look at intention of T:
o the terms of the instrument: if expressed for actual association unlikely to benefit
present members
o the location and number of members: small mean immediately benefit to all - gift
o the subject matter of the gift: if Prop easy to distribute likely to gift.
o the rules governing the Association: if no association rules or it is silent re distribution of
association assets no gift.
HELD: A gift on Trust for an Unincorporated Association would, prima facie, be valid as a gift for
the individual members. That presumption would be overturned, and the trust would fail, if on
proper construction the gift was present and future members, in which case it failed as a gift in
perpetuity, or if it was a gift for the non-charitable purposes of the Association.
Bacon v. Pianta (1966) 114 CLR 634
FACT: disposition for Communist Party of Aus.
HELD: invalid T.
o Not charitable trust (exception 1) because political purpose.
o Rebutted presumption that it was gift to present members terms of T addressed to party
(not members) and stated as being for its sole use and enjoyment, membership
broad/fluctuated, no provision of how to end party/distribute assets.

Purpose Trusts: for the benefit of ascertainable beneficiaries:

Re Denleys Trust Deed [1969] 1 Ch 373
FACT: T of land/money for sports ground fro comp employees and other people permitted by T.
Goff J:
o Ct easily supervise/control T for benefit of ascertainable bens from abstract and
impersonal purposes by ensuring sports ground not abused and maintained for comp
employees.

4
C. COMPLETE CONSTITUTION OF THE EXPRESS TRUST & WRITING REQUIREMENTS
Complete constitution: irrevocable transfer of Prop to T and creating E interest to go to Ben
(splitting ownership).
o Effect: enforceable by Ben (even if volunteer) settlors intention fulfilled: Ellison v.
Ellison (1802) 31 ER 1243
o No needed if consideration has been paid E maxim of not assist a volunteer does not
apply to CCed Ts: Paul v Paul (1882)
If CC fail: agt to constitute T need E SP
o Yes consideration: amounts to Agt to constitute T - E will give SP to enforce
o No consideration: E will not give SP, even if under seal.
o But E will not deny volunteers rights outside E:
CL Cov rights:
Examples:
Davenport v. Bishop (1843) 63 ER 201:
FACT: W marriage settlement have cov to settle Prop on her niece.
HELD: T can sue W for benefit of N to perform cov.
Cannon v. Hartley [1949] Ch 213; [1949] 1 All ER 50
FACT: H cov in deed to C (party to settle after-acquired moneys on trust for her)
HELD: C action for breach of cov damages (absence of consideration irrelevant)
This idea broadened
o If A promise B (for value) to pay B on T for C. A-B have failed CC, BUT B-C may have
CCed Trust of Bs CIA, C can compel B to sue A.
B have CL rights to sue for breach of contract and E right for SP of cov
C have E right to compel B to sue A.
o If A promise B (under seal but NOT for value):
B is T for C cov is T Prop.
C have E right to compel B to sue A
Fletcher v. Fletcher (1844); 4 Hare 67; 67 ER 564:
FACT: Settlor deed cov with T that if A/B (sons) survive him, Ss personal reps
pay 60K to T on T for A/B or to A/B if they 21I.
HELD: cov voluntary, but create T of that cov.
o T refuse to enforce cov but this does not affect A/B rights to sue.
CF Re Pryce [1917] 1 Ch 234; [1916-17] All ER 573
Eve J: if A-B fail CC, then B-C have no CC either (cant have CC T of right to sue)
CF Re Cooks Settlement Trust [1965] Ch 902
FACT: A cov with B and T that if certain assets sold, proceeds go on T for As children. A sell but not
settle proceeds, according to cov.
Buckley J: children cannot compel T to sue A for damages of breach of cov.
o Approve Re Pryce - cov is re contract nothing to do with law of Ts.
o Criticism: issue is whether if T hold benefit of cov (prop right) on T. Not just if promise was
merely contractual.
(i) Creation of T by Declaration
o Declares himself as T via statement (final/binding).
o No need to transfer L interest only need writing if in relation to land then.
o Formalities (writing requirement):
- in relation to land (writing requirement);
s. 23C(1)(a) Conveyancing Act 1919 (NSW): re land must be in writing
s. 23C(1)(b) Conveyancing Act 1919 (NSW): decl of T re land must be in writing.
- in relation to personal property:

5
 s.23C(1)(c) Conveyancing Act (NSW): no writing UNLESS settlor is NOT
absolute owner (already Ben) and makes SubT.
Then depends on which model Ct adopts:
1. If Ben disappears (gi ve ALL to New Ben) disposition from Old Ben to
New Ben writing necessary
2. If Ben doesnt disappear (gives bulk of E interest to New Ben, but keeps
scintilla first carves out interest, then disposes of it) no writing.
Certainty of subject matter: Hunter v. Moss [1994] 3 All ER 215:
o FACT: decl T of 5% of shares. Didnt specify which shares.
o HELD: upheld note, this case is strongly criticised.

(ii) Creation of T by Transfer

Settlor own Prop absolutely + doesnt want to be T assign L interest to T for Ben that Settlor
chooses.
2 METHODS:
(a) inter vivos settlement
- Real pty or subsisting equitable interest: need writing CA above
- Personal Prop: unsure re writing CA above
- Test: if everything necessary to transfer the title has been done by the creator: Milroy v Lord

(b) testamentary disposition (will) post-mortem

Must comply with valid will req (writing)
o s.7 Wills Probate and Administration Act 1898 (NSW): will in writing, signed in presence of
2+ witnesses.
Exception (even if not comply): Secret Trusts:
o Intention of T not disclosed in will + Ben unnamed, BUT that info is communicated to
intended T.
(i) Fully secret T: no record of T at all but T agreed. Need evidence.
(ii) Half secret T: some indication of T but not all facts disclosed eg. who Ben is
Requirement of valid secret T: Ledgerwood v. Perpetual Trustee Co Ltd (1997) 41 NSWLR
532, per Young J:
o Settlors intention to subject Donee to T
o Communication of T to intended Donee/T
o Agt/acquiescence of Donee/T

(iii) Creation of T by Direction

Existing Ben direct T to be T to new Ben.
Evidenced in writing: s.23C(1)(c) Conveyancing Act (NSW)

D. VARIATION, TERMINATION & FAILURE OF EXPRESS TRUSTS

1. Variation
(a) via a provision contained in the T instrument
- Kearns v. Hill (1990) 21 NSWLR 107
(b) via the inherent power of the court
- Chapman v. Chapman [1954] AC 429
4 types of emergencies that could be remedied by the courts inherent jurisdiction:
(i) changes in the nature of the investments for infants from
personalty to realty
(ii) investments in business transactions not authorised by a Trust of
settled land

6
 (iii) payment of maintenance out of income, even where there is a
direction to accumulate income
(iv) compromises in favour of unborn children
- Tickle v. Tickle (1987) 10 NSWLR 581, per Young J:
Can vary T re minors if circ thwart Settlors intention and parties/guardians
consent to Cts course of action to effect intention.
(c) via a statutory power bestowed on the courts
- s. 81 Trustee Act 1925 (NSW)

2. Failure of T
Despite complying with 3 certainties + CC + writing still some vitiating elements.
(i) Public policy:
o Is contrary to PP, promotes immorality, interferes with sanctity of marriage: Re Ayles Trusts
(1875) 1 Ch D 282.
o Eg. 1875: against PP to have children outside marriage T for illegitimate children fails.
(ii) Legality of Purpose
o Illegal purpose void.
o Ct will not assist persons trying something contrary to law: Hamilton v. Waring (1820) 2
Bligh 196; 4 ER 300
o Example: Thrupp v. Collett (No. 1) (1858) 26 Beav 125; 43 ER 844: T fund to pay fines of
poaches (imprisoned for non-payment). HELD: invalid encouraged non payment of fines.
o Nelson v. Nelson (1995) 184 CLR 538: McHugh look at Resulting Ts.
(iii) Rule against perpetuities
o Perpetuitie eg. T where Ben are Settlors children for life, then their children for life etc.
Effectively hold onto Prop forever!
o AIM: To avoid restrictions on the alienation of pty (Prop should not be tied up too longer
under 1 person/family).
o Rule: someone must have ABSOLUTE interest within set expiry time T vest in specified
time.
o OLD expiry time: lifetime of a nominated person + 21yrs: Cadell v. Palmer (1883) 6 ER 956
o NOW: Statutory reforms
- s. 23A Covneyancing Act 1919 (NSW): wait and see provisions: reversed the initially
uncertainty rule so that now an interest will not infringe the rule merely because it
appears to have the potential to do so.
- s. 8 Perpetuities Act 1984 (NSW): Ct can postpone possible invalidation to see if the
interests actually vest within the perpetuity period (more relaxed)
- s. 7 Perpetuities Act 1984 (NSW): 80 yr expiry from date of disposition.
- s. 9(1) Perpetuities Act 1984 (NSW)

3. Termination of T by the beneficiaries

o Ben (suri juris) can call on T for FULL interest: Saunders v. Vautier (1841) 4 Beav 115; 49 ER 282