Trust and Equity - Properties Clauses

Running head: TRUST AND EQUITY
TRUST AND EQUITY
Name of the Student
Name of the University
Author Note

TRUST AND EQUITY1
Clause a
In the given scenario, the first issue is in relation to the validity and the impact regarding
the clause where Trevor gave half of his shares to Loretta, and hoped that she would sell the
shares and distribute the proceeds of the sale to his employees in an equal manner.
The case of Knight v Knight (1840) 49 ER 581 shall be considered to be a significant case
in this regard. In this case, it was notably stated that a personal express trust should establish and
show the supposed ‘three certainties’ in order for the trust to be considered as valid. Only when
the ‘three certainties’ is has been fulfilled, the court shall identify and acknowledge the trust to
be binding and obligatory in relation to equity, and so enforce its terms in order to provide for a
beneficiary. Firstly, there should exist the ‘certainty of intention’. It means it must have been
made clear by the settlor that it was his intention (instead of any expectation, belief or hope) that
the utilization regarding the trust property shall be done in a specific manner. Secondly, there
should exist the ‘certainty of subject-matter’. It means that the court shall be able to recognize
and classify the specific property, which creates the subject-matter in relation to the trust.
Thirdly, there should exist the ‘certainty of objects’. The ‘certainty of objects’ is multifaceted,
complex and has undeniably instigated various discussions and debates in relation to the topic.
According to this certainty, court should have the ability to recognize the exact individual or
individuals who shall be considered to be the beneficiary or the beneficiaries in relation to the
trust. This certainty is considered to be very vital and decisive, because the purpose of any
particular trust arrangement is to convene benefit on demarcated and defined persons. However,
the substance is frequently made complex by uncertain, vague or extensive and varied classes of
beneficiaries.
1 Knight v Knight (1840) 49 ER 58.

TRUST AND EQUITY2
In the case of Re Denley's Trust Deed [1969] 1 Ch 3732, it was stated that a particular
trust established for the purpose of benefit in relation to a particular category of employees, shall
be considered to be a progressive approach by the judiciary.
The case of Knight v Knight (1840) 49 ER 583 shall be applied in the given scenario. It
must be demonstrated that whether the ‘three certainties’ is fulfilled in the given scenario.
Firstly, applying the ‘certainty of intention’ test, it may be said that there was no clear intention
by Trevor as he only believed that Loretta will sell half of his shares and distribute the proceeds
of sale among the employees of Spick+Span in an equal manner. Secondly, applying the
‘certainty of subject-matter’, it may be said that the property, which creates the subject-matter in
relation to the trust, has been specified by Trevor. Thirdly, the ‘certainty of objects’ should be
applied in the given scenario. Applying this certainty, it may be said that Trevor has identified
the exact class of individuals (employees working for more than ten years) who shall be
considered to be the beneficiaries in relation to the trust. In Re Denley's Trust Deed [1969] 1 Ch
373, it was stated that a particular trust established for the purpose of benefit in relation to a
particular category of employees, shall be considered to be a progressive approach by the
judiciary4.
To conclude, it may be said that in the given scenario, the impact regarding the first
clause shall not be valid, because even though this clause fulfils two certainties (subject-matter
and object), it does not fulfil one certainty (intention).
2 Re Denley's Trust Deed [1969] 1 Ch 373.
3 Knight v Knight (1840) 49 ER 58.
4 Re Denley's Trust Deed [1969] 1 Ch 373.