Equity and Trusts CW1 (University of Law): Certainty of Objects

This essay critically examines the courts' approach to the tests for certainty of objects within the context of express trusts in UK law. It explores key principles of equity and trust law, including the maxim that equity provides remedies for wrongs and the principle of equity abiding by the law. The essay analyzes the significance of certainty of objects, distinguishing between fixed and discretionary trusts, and emphasizes the requirement for a complete list of beneficiaries in express trusts. It discusses the evolution of court approaches, from stricter adherence to the list principle to a more flexible interpretation of settler's intentions. Various remedies, such as injunctions, are outlined, along with case examples like IRC v Broadway Cottages Trust and Re Eden. The essay concludes by highlighting the courts' role in ensuring fair justice to beneficiaries and the constructive remedies available to address issues related to the identification and distribution of trust property.

Equity and Trusts CW1

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Critically discussing extent to which courts have approached the various tests for certainty of
objects in relation to express trusts.........................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Equity and Trust law is useful in case of beneficiaries as they are able to take their part in
the trust property in realistic manner. Present report deals with critical discussion on Courts
approach towards tests for certainty of objects in case of express trust. In relation to this, positive
impact of Court has been discussed and relevant remedies are explained in context to Court.
Moreover, key principles and remedies in relation to equity law is discussed. Hence, overall
analysis is based on certainty of objects of express trust.
Critically discussing extent to which courts have approached the various tests for certainty of
objects in relation to express trusts
The UK law is one of the highly developed and well-structured among other laws of
various nations. Government has enacted laws in relation to civil, criminal, equity and trust and
related laws. These laws are binding on people and as such, they have to follow all of them.
Various laws are also applied to corporate sector which are legally binding on organisations so
that they may trade fair products and services (Paolella and Durand, 2016). The Equity and Trust
law is another useful law which are applied to in case of express trust between parties. There are
various legal principles that can be included in the context of Equity and Trust law which are
listed below-
1. Equity will not suffer without getting remedy in case of wrong- This is the case which
explains that party monetary damages occur will be provided to the party who has suffered loss.
Maxim has provided that it can be used by a beneficiary of trust of which rights are not
recognised by common law. The remedies such as injunctions and specific remedies should be
provided to the party (Friedman and et.al, 2018).
2. Equity abides law- One of the main approach that is followed by Courts is to firstly apply
common law and if it is required that such law is inappropriate, then equitable remedy will then
apply. Main reason to exercise such equitable remedy on second basis is that party do not suffer
loss and not overruled judgements are then made.
3. Justice to party- Equity will be provided in case of one who has done justice which means that
past behaviour of parties is likely to be judged with relation to activities conducted by them. In
context to this, they should not have been involved in fraud and as a result, if they have indulged
then, party will not succeed on the grounds of equity. On the other side, equity will only be
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provided if both parties indulged in transaction have acted in good faith. Thus, it is based on
discretionary nature and related to future activities which would be conducted by plaintiff.
4. Delaying defeats equity- This is another principle which is based on the concept that delays in
proceedings of Court disallows equity up to a high extent. Laches is a type of non-reasonable
delay in relation to enforcing right. Acquiescence is also another terminology which means that
one party has breached rights of another party and that has not approached Court for achieving
justice and thus, suffered party cannot claim for justice at a later stage (Morgan and Kuch, 2015).
5. Equity is based on Equality principle- This means that when a person or more owes property,
then Court decides property to be divided equally. It is particularly applicable when organisation
is liquidated and funds should be divided to creditors claiming for their funds and other parties
on equality basis.
6. Equity is intention to fulfil obligation- The person who is obliged in fulfilling his duties
should fulfil the same as he has expressed duty to make out the same in effective manner.
There are various remedies which can be applied in the context of Equity and Trust Law
such as injunctions which has several types like Interlocutory, Qui Timet and Mareva
injunctions. Interlocutory means that it is granted priorly by Court so that innocent party may not
suffer. The reason must be stated regarding damage will be caused to them. Qui Timet injunction
implies that it is exercised to prevent an act prior to happen which may cause loss to plaintiff. On
the other side, Mareva injunction is termed as freezing one as well. This implies that innocent
part may apply for Court as he may think that substantial case may be built and assets are at risk,
then he must prove the same in Court for seeking relaxation (Subedi, 2016).
Certainty of objects- The certainty is termed as who are the beneficiaries. There are
various types of trusts such as fixed and discretionary etc. Fixed trust are those which are based
on the principle that beneficial interests are normally fixed and these are known as express trusts.
However, discretionary trust postulates that trustees have power to appoint to person as trust's
beneficiary. To exercise and satisfy certainty of objects, complete list of beneficiaries must be
made so that clarity may be maintained in the best possible manner. The Court has made
judgement in the case of IRC V Broadway Cottages Trust in which Court had applied wrong test
on case of discretionary while, it should have been applied to express trust. It is challenging
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knowing that both trusts can be applied to same tests as no difference is observed by the Court
which distinguishes them.
For maintaining an express trust, three elements are required for such formalities such as
certainty of intention, certainty of subject matter and certainty of objects. These are required to
be abide by the trustees, if they fail, then Court can exercise control over it. This is due to the
implied and constructive fact that nature of trusts are legally binded and obligations are
enforceable which are on trustees. Hence, it is crucial for identifying trust objects. In relation to
express trust, objects are relevant to human beneficiaries rather than on a purpose. It is required
to create list of such beneficiaries which are in trust and well-defined class should be recognised,
else trust is not formed (Allen and Kraakman, 2016). It is important that beneficiaries are
identifiable so that Court can enforce favour to trust and trustee would continue to hold legal title
and ownership would retain by the settler on trust. In relation to this, strict approach had been
followed by Court earlier, but now fundamental principle has been changed as litigation
procedure is adopted by it and as such, it can uphold trust whenever, it thinks fit to be.
The tests for providing protection to the certainty of objects have highlighted how Court
can exercise its control and execute trust in scenario of uncertainty. This can be particularly
addresses to express trust, furthermore, case of IRC V Broadway Cottages Trust may be cited
here as it provide clarity that complete list of beneficiaries were imparted. However, such
exercise were attained failure in context of discretionary trust at a later year by House of Lords.
Approach by Court was stricter in express trust where higher degree of certainty is needed in
comparison to discretionary trust. The fixed one type of trust sets out individual interest of each
of beneficiary in property of association and list of beneficiaries is formulated so that equal
division can be provided to them. Since, objects are strictly controlled, discretion cannot be
exercised. The approach by Court is clear in this context that if complete list is not imparted,
then trust would be deemed to be invalidated (Michalos, 2017).
Hereby, demonstration of Re Eden would be fruitful to explain list related to
beneficiaries. It was quite difficult to ascertain all the lists as it is a time consuming process.
This is an obstacle that can be reason lead to void of trust else enquiries are done performed in a
better way. On the other hand, Gold V Hill which was an express trust created for 'Carol and
Kids' can be cited. It was upheld by Court despite uncertainty was not there. In relation to this, it
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may be identified that Carnwath J asked and referred the case to Upjohn by stating that it was
required that Court should have exercised its common sense in aspect of settler's intent. In
relation to this, Lord Upjohn stated that it was the duty of Court to exercise and tried to ascertain
settler's intentions in the best possible manner. The unambiguous language can be used but it
should not be violent up too much extent which may lead to complete violence to the same.
Hence, it can be said that Courts are obliged and entitled to initiate control and as such, duty is to
provide full justice to all the beneficiaries. However, it is also the duty of trustees to effectively
ascertain who are trust' beneficiaries so that terms of express trust can be interpreted in realistic
manner (Cameron, 2017).
However, problem or issue related to application of list of beneficiaries are required to be
resolved in a better way so that trust may be able to make out obligations quite effectually.
Trustees may face difficulty in providing division to beneficiaries and may result into breach of
duties. In order to resolve such issues and to minimise breach of duties by trustees, Court has
provided constructive remedy for solving such problem. Equity and Trust Law has imparted
sensitive mechanisms to express trusts which are to be exercised in accordance to the situations.
For instance, for procuring directions under Civil Procedure Rules or providing advertisement
with regard to claimants in London Gazette, it is required that constructive notices are to be
provided for obtaining directions in the best possible manner. In case the status of any of
beneficiaries, then Benjamin order can be used to permit trustee for distributing property that are
still pending for their appearance. Hence, it is clarified from the fact that when beneficiaries are
non-traceable or even deceased, trust would not be affected in either manner. Neither, it would
be affected with entitlement of not known beneficiaries at future date (Gabrielsson, Whaley and
Sloboda, 2016).
Moreover, it can be critically discussed that fixed trusts have been reviewed on consistent
basis by the Court and they are in operations by effectively carrying out duties with much ease. It
is evident from the fact that entire list is required to be obtain which is an appropriate way to
handle information of beneficiaries of trust. This helps Court to effectively justify and make bold
move or action in context of application. It has been fruitful for Court as it can exercise for
making effort to enable trust in complying with intent of settler and thus, extracting better
outcome for all of beneficiaries present in trust. It can be dated back to discretionary trust that
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determination of certainty of objects in such trust has been more contentious and controversial.
Despite of this, Court has been operating in realistic way and thus, it may be said that they are
operating positively and thus, equal approach has been followed in a better manner. Hence,
courts have approached various tests of certainty objects in the context of express trusts.
CONCLUSION
Hereby it can be concluded that Equity and Trust Law of UK is imparting fair justice to
all the parties who are entitled to receive their share in property of trust with much ease. The
beneficiaries of trusts have right to claim part of portion in such property and trustees are obliged
to fulfil duties and as such, distribute shares equally in accordance to part of it held by members.
Moreover, Courts are far more consistent in meeting out their operations and thus, better control
and approach have been adopted to safeguard interest of beneficiaries. On the other side,
certainty of objects is followed and is required that complete list is being formulated of all
members of express trust and thus, clarity is being obtained with regards to members in the best
possible way. Hence, Courts are operating and has positive impact on law.
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REFERENCES
Books and Journals
Allen, W. T. and Kraakman, R., 2016. Commentaries and cases on the law of business
organization. Wolters Kluwer law & business.
Cameron, P., 2017. International energy investment law: the pursuit of stability. OUP Catalogue.
Friedman, R. S and et.al, 2018. How just and just how? A systematic review of social equity in
conservation research.Environmental Research Letters.
Gabrielsson, A., Whaley, J. and Sloboda, J., 2016. Peak experiences in music. In The Oxford
handbook of music psychology.
Michalos, A. C., 2017. The loyal agent’s argument. In How Good Policies and Business Ethics
Enhance Good Quality of Life (pp. 53-61). Springer, Cham.
Morgan, B. and Kuch, D., 2015. Radical transactionalism: legal consciousness, diverse
economies, and the sharing economy. Journal of Law and Society. 42(4). pp.556-587.
Paolella, L. and Durand, R., 2016. Category spanning, evaluation, and performance: Revised
theory and test on the corporate law market. Academy of Management Journal.59(1).
pp.330-351.
Subedi, S. P., 2016. International investment law: reconciling policy and principle. Bloomsbury
Publishing.
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