Case Study Analysis on Express Trust and Agency Law

Running head: CASE STUDY ANALYSIS
CASE STUDY ANALYSIS
Name of the Student:
Name of the University:
Author Note:

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CASE STUDY ANALYSIS
Part-A:
Issue:
The issue involved in this case is there enough certainty for the creating a trust.
Rule:
An express trust is a trust that is created for a purpose and not imposed by the court. The
trust is an arrangement where a person called the trustee controls the property for the benefit or
advantage of another people who is known as beneficiary. The trust is created by a person who is
known as a settler, trustor or grantor. Another type of trust is called the implied trust which is
being created only by the operation of court.
The Australian trust law is developed from the English trust law. It is a legal agreement
where the trustee manages and holds property for another person in the agreement as provided in
the trust deed. The trustee though legally owns the property on behalf of the beneficiaries but is
under obligation to act according to the deed. The three certainties denote a rule which had its
origin in the English trusts law. This rule was propounded in the case of Knight v Knight [1840]
49 ER 58, leading case of English trust law that laid down the ‘three certainties’ principle.
Langdale MR, the English law reformer, decided in this case that in order to create a valid trust,
the trust instrument must have the certainty of intention, certainty of subject matter and the
certainty of objects. Similar observation was given in the case of Bowman v Secular Society
[1917] AC 406.
The first principle, the certainty of intention or words as given in the case of Wright v
Atkyns (1823) Turn & R 143, is to be determined by considering the nature of language used in

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CASE STUDY ANALYSIS
the agreement. It must be clear that the testator wants a trust to be created. The settler should
have the intention to create a trust. There is no need of any particular for or word and it is not
even necessary to use the word trust.
The next condition is called the subject matter’s certainty. There are 2 main parts of the
condition. Firstly, there has to be certainty as to which part or whole of the property is to be fixed
for trust, plus there shall be certainty regarding the beneficial interest’s extent of every
beneficiary. The first condition is important as the trustee must have a clear knowledge of the
composition and the constituents of the trust. If the trustee fails to deal with trust property, that
may result in to the breach of trust. Moreover, the beneficial interest of each of the beneficiary
shall be certain such that the trustees have clear ideas about how much amount is entitled to each
of beneficiary on the trust distribution and what income must be collected or paid to the
beneficiary as held in the case of Boyce v Boyce (1849) 16 Sim 476.
The third condition is the certainty of the objects which is a crucial criterion such that the
beneficiaries for whose interest the trust is being created under the trust must be properly defined
that enabled the trustees to determine them. If the trustee distributes the profits or benefits out of
the trust to the non objects, then they can be held personally responsible for it and will be
required to replace the assets.
Application:
In the present case, it is seen that Basil is a registered holder of about 950 numbers of
shares of the Basil Electrical Co Pty Ltd with share capital issued of 1,000 shares. He orally
declared himself to be the trustee of 5 % out of the issued share capital. The remaining fifty
number of shares held by the trust were not being identified.