Re Baden (No.1) - HL, by a bare majority of 3:2,
Principle:
1) the objects of a trust must be defined with sufficient certainty to enable the trustees to execute the trust according to the settlor's intention.
The objects of a power of appointment must be defined with sufficient certainty to enable the donees of the power to exercise it according to the settlor's intention
2) Certainty:
- conceptual certainty - precision of language used by the settlor to define the classes of person whom he intends to benefit
- evidential certainty - extent to which the evidence available in a particular case enables specific persons to be identified as members of those classes
- ascertainability - extent to which "the whereabouts or continued existence" of persons identified as beneficiaries can be ascertained
- administrative workability - extent to which it is practicable for trustees to discharge the duties
This article argues that:
- same degree of conceptual certainty is required for all trusts and powers of appointment
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Aspects of certainty: 4 notions:
1) conceptual: meaning of "ex-employee"
2) evidential: e.g. A alleged that he is an ex-employee, but the record is destroyed by fire.
3) ascertainability: not sure if Tom is dead or not
4) how extensively must we survey the class of potential beneficiaries?
Fixed trust:
Complete list rule:
conceptual uncertainty: e.g. friend, old friend, person who has a moral claim on X
what degree of conceptual uncertainty will the courts tolerate?
Re Gibbard - a concept was sufficiently certain if it could be said in principle of at least some persons that they were within the class
Re Gulbenkian: this is not the correct test fo power of appointment
Gift upon conditional precedent
Re Allen - "to the eldest of the sons of [A] who shall be a member of the Church of English and an adherent to the doctrine of that church"
Held: the appellant should be permitted to seek to establish as a matter of fact that R had been a member of the Church of England and an adherent to its doctrine.
Re Barlow's Will Trusts - Browne-Wilkinson said that the "Re Allen test" was that the gift is valid if it is possible to say of one or more persons that he qualify, even though it may be difficult to say of others whether or not they qualify.
Re Clarke - TOR directed that his residue should be divided among each of four named "legatees". The gift to the last legatee failed. Held: each of the first three charities was entitled to a quarter of the residue, the fourth quarter went as on intestacy.
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Hayton textbook
Re Baden no.2:
Stamp LJ: relatives = next of kin, the trust is valid
Megaw LJ: substantial number of objects it can be said with certainty that they fall within the trust. What is a substantial number may be a question of common sense and of some degree in relation to the particular trust
Sachs LJ:
Cure uncertainty:
No
But what if the settlor gave personal power to widow that she can decide in case of doubt?
It seems unreasonable for the court to claim it invalid
But if it is valid that it seems unreasonable for the court to claim that the trust with trustee with fiduciary power being invalid
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Penner: administrative unworkability
McPhail, Lord Wilberforce: all the residents of Greater London
ambiguity of "hopelessly wide": size of the class? If the problem is survey? class definition? vague?
Only reported case in which a trust has failed for administrative unworkability is R v District Auditor, es p West Yorkshire MCC: any inhabitants of West Yorkshire
Lloyd LJ: class is far too large. the class was an accidental conglomeration of persons who had no discernable link with the settlor. and it is a non-charitable purpose trust.
3 cases dealing not with discretionary trusts, but with "intermediate" powers: power to appoint to anyone in the world except for a specified class:
Clausten v IRC
Re Manisty's Settlement
Re Hay's ST
Blausten: Stamp LJ focus on duty to survey
Manisty: Templeman: validity of any particular appointment. Templeton was not perturbed, expectations of the settlor are often not difficulty to discern
Another candidate for meaning of administrative unworkability: the settlor's direction is so capricious that no trustee could discern a sensible way to carry it out
Bird v Luckie: a testaor is permitted to be capricious
Brown v Burdett: testator's instruction to trustees to block up the rooms of a house for 20 years was struck down
Re Hay's: the width of a power pe se could not invalidate it if it were given to a non-trustee. The difficulty arises when the power is given to a trustee, whose fiduciary position requires him to deal with the power responsibly.
Swadling suggests that the test of administrative workability requires there to be a "core class" of objects within the larger class.
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