Question

Sasha died earlier this year, she had been a law professor at the University of Loronto. Her husband, Joshua, had also been a law lecturer in the same law school. Sasha drafted her own will in which she named Tomas and Todd as her executors and trustees, and the will contained clauses as follows:

a)         £100,000 to my trustees to hold on trust to distribute as they see fit amongst those students at the University of Loronto law school who have shown promise and talent. If there is any query regarding who is entitled then Joshua will know.

b)        £5,000 to my trustees upon trust to divide it equally amongst all of my music loving friends.

c)         £100,000 on trust for my trustees to allocate an appropriate income to my elderly father for the rest of his life, then to Joshua absolutely.

d)        All of the residue of my estate to Joshua hoping that he will in due course leave it to the charity Oxfam but I direct that my trustees allow such old colleagues of mine who wish to do so within one year of my death to acquire any one of my collection of antique law books at 25% of market price.

Advise Tomas and Todd.

Introduction

This is an advice for Tom and Todd (“the executors”) of Sasha’s will the advice will discuss the clauses in her will a) to d) respectively.

a)      The bequest is a discretionary trust. This is a trust for a class in which the trustee is given the ability to determine the individual shares within that class. Thus the appointment ‘all to one’ would be possible. The intention to create this trust is clear if we look at the meaning of the words, their true effect and at the intention of the testator as expressed in the will (Comisky v Bowring-Hanbury [1905]). The subject matter is also very clearly stated and is capable of satisfying the test for certainty (Sprange v Barnard (1789)).

There is some uncertainty as to who the objects are here, because it is for the students of the university that “have shown promise and talent”. The test for certainty was laid down in McPhail v Doulton [1971] which it was held The modern test for certainty of object for discretionary trusts is called ‘individual ascertainability test’. The power to appoint the beneficiaries is valid if it can be said with certainty whether any given individual is or is not a member of the class and does not fail simply because it is impossible to ascertain every member of the class.

In Re Baden Deed Trusts (No 2) [1973] further clarification was provided using the approach adopted in the article by Emery ((1982) 98 LQR 551). Sachs LJ emphasised that the court was concerned only with conceptual certainty test and not evidential certainty. Stamp LJ emphasised that the is or is not test was not just about conceptual certainty, a class can be conceptually certain, but it can still fail the is or is not test because of evidential uncertainty. It must be possible for the trustees to make a comprehensive survey of the range of objects, but he did not think it would be fatal if, at the end of the survey, it was impossible to draw up a list of every single beneficiary. Megaw LJ adopted a different solution, however, requiring that as regards a substantial number of people, it can be shown with certainty that they fall within the class. This is rather a vague test — clearly it is not enough to be able to show that one person is certainly within the class, as this test was rejected in Re Gulbenkian’s Settlements [1970]. Presumably, the test requires evidential, as well as conceptual certainty.

Using their Lordships analysis students that “have shown promise and talent” appears to be a condition precedent and can be determined by looking at University records thus addressing evidential uncertainty and ascertainability. The language is clear and conceptually certain because the promise and talent that Sasha is wanting to reward is within Academia. If the executors are concerned about the vagueness or are querying of the meaning of “promise and talent” of the students then Sasha has directed them that her husband Joshua will know. Sasha has nominated an expert that can help the executors determine construction of the condition. Both Re Tuck’s Settlement Trust [1978] and Re Tepper's WT [1987] are examples where an expert is used and the court may hear extrinsic evidence of the surrounding circumstances to show the meaning attributed by the testator.

b)      Similar to the advice in relation to clause a) the intention to create a trust Paul v Constance [1977] and the certainty of subject matter are both capable of determination in this bequest Re Golay’s Will Trusts [1965]. The issue here is who the objects are. This is a fixed trust and the trustees have no discretion at all. The shares to be taken in the trust by the beneficiaries are predetermined by the testator. It follows that a fixed trust must, for its execution, have beneficiaries, which are also known so that a complete list can be made of them (complete list test). Specifically, a complete list of all a trust’s beneficiaries must be capable of being drawn up. This was the view of Jenkins LJ in IRC v Broadway Cottages [1955]. If the complete list is not capable of being drawn up then the trust fails for uncertainty of objects, and a resulting trust is set up for Sasha’s estate.

Sasha’s trust for equal distribution among my music loving friends would probably fail on the grounds of conceptual certainty, because the list test could not be satisfied. Defining friends can be evidentially proved it is a conceptual problem, because a complete list of friends cannot be drawn up. For example people associated with so many times a year for more than 2 years, can define a friend? The definition of a friend is difficult to determine, say Sasha had not seen an acquaintance for over 2 years are they a friend? A colleague at work who she never socialise with, is that a friend.

In Re Barlow's WT [1979] the court actually proposed a weaker test, they said not only was evidentially uncertainty immaterial, they did not even insist on conceptual certainty, the said the expression “friends” would need to have a core of certainty. As long as friends had a core meaning (you could understand), it did not matter whether it had, what is described as a penumbra of certainty. The phrase “music loving” may provide that core certainty because Sasha may have been a member of a group of friends that enjoyed music together. The problem is if we validate this trust with quite a considerable degree of uncertainty then it leaves a problem for the executors, because if someone comes forward and falls into penumbra, do we treat this person as a friend or not, there is no right or wrong answer.

c)       In Sandra' bequest there is uncertainty around what is “appropriate income”. In Re Kolb's Will Trusts [1962] the direction to invest in blue chip shares was too uncertain. While in Re Golay’s Will Trusts [1965] Ungoed-Thomas J took the view that the words ‘reasonable income’ directed an objective determinant of amount, which the court could, if necessary, apply. It was held that there was certainty of subject matter as the court could determine what was reasonable income as this, in itself, contained a degree of objectivity. It should be noted that it has been doubted whether the decision in Golay’s is correct in the light of other authorities. However, it has been argued by Parker and Mellows that, whilst the decision in Golay’s was inconsistent with contemporaneous decisions on certainty, it does seem to be consistent with the more modern practice of the courts in trying to avoid holding dispositions void for uncertainty. The gift over to Joshua appears to be unspecified it can be argued it is uncertain. In Sprange v Barnard (1789) Arden M.R. held that the husband was absolutely entitled to the £300 because the subject matter for the children was not specified. The trust for the children has become void through not defining the subject of their benefit. However, this authority must be used with the proviso that the modern judge is more confident that they can find a way to implement a trust, even though its meaning is not certain.

d)      Sasha has left the residue of her estate. In Palmer v Simmonds (1854) A testatrix left on trust ‘the bulk’ of her residuary estate, and Kindersley V-C, after consulting a dictionary, concluded that the word ‘bulk’ was inadequate to specify any portion of the property as trust property. Since it was not possible to carve out from the residue that portion which was to be held on trust, the trust failed and the lasting beneficiary took the whole property absolutely. It is argued that residue is certain. Sandra has left it to Joshua “hoping” that he will in due course leave it to the charity Oxfam. When someone leaves something in a will and says I hope and pray it will be used for a stated purpose, this cannot be said to be a trust (Mugsoorie Bank v Raynor (1882) because these are precatory words which the court discourages.

Sasha further directs that old colleagues be permitted to acquire any one of my collection of antique law books at 25% of market price. We can distinguish this bequest with the one in  Re Barlow's WT [1979] here a testamentary direction giving an option to purchase paintings and parts of the estate to “members of my family and friends of mine” was not invalid for uncertainty. After specific bequests of various paintings, she directed that the remaining paintings be sold at a price well below their true value. Her executor sought directions from the court. We can the borrow the analysis in Barlow to advise in a gift to a class, as the objects are only entitled to a share of the property, it is vital to be able to say whether any given individual is or is not a member of the class. However, in Barlow the ‘family and friends’ were each given an individual opportunity to purchase the paintings. This is not a problem here because the executors do not need to divide up the entire fund equally so they do not need to know the maximum number of old colleagues or what “colleague” actually means. Therefore, a greater degree of uncertainty will satisfy this condition and will not affect the opportunity they shall receive.