The law of equity and trusts imposes strict requirements for the valid creation of a trust, one of the most significant being the certainty of objects. This principle ensures that the beneficiaries of a trust are sufficiently identifiable, thereby enabling trustees to execute their duties effectively and the courts to enforce the trust if necessary. Without this certainty, a purported trust may fail and revert to a resulting trust or absolute gift. This essay examines the requirement of certainty of objects within the broader framework of the three certainties established in Knight v Knight (1840). It distinguishes between fixed and discretionary trusts, evaluates the evolution of the applicable tests through key authorities, and considers associated practical and theoretical challenges. The discussion draws on established case law and academic commentary to demonstrate both the coherence and occasional limitations of current doctrine.
The Requirement of Certainty in Trust Creation
In equity, trusts must satisfy three certainties: intention, subject matter, and objects. Certainty of objects, the focus here, addresses who is entitled to benefit under the trust. Lord Langdale MR in Knight v Knight articulated that a trust must be for the benefit of individuals or a class capable of being ascertained. This requirement promotes administrative certainty and protects against the misapplication of property. Indeed, without identifiable objects, trustees risk breaching their fiduciary duties, while beneficiaries lack the standing to enforce their rights. Academic analysis, such as that provided by Pettit, underscores that this rule balances settlor autonomy with judicial oversight, although it can sometimes operate rigidly in borderline cases.
Distinguishing Fixed and Discretionary Trusts
The test for certainty of objects varies according to the type of trust. In a fixed trust, each beneficiary possesses a predetermined interest, requiring the complete list of beneficiaries to be compiled with exactitude. This is illustrated by the strict approach in IRC v Broadway Cottages Trust [1955], where the Court of Appeal held that a fixed trust for a class fails unless it is possible to ascertain every member at the time of distribution. By contrast, discretionary trusts confer upon trustees the power to select beneficiaries from a defined class. Here, the test is less stringent, permitting a trust to succeed if the class is conceptually certain even when not every member is immediately identifiable. This distinction reflects equity’s pragmatic adaptation to modern settlor preferences for flexible arrangements.
The Evolution of the Test: From Gulbenkian to McPhail v Doulton
The House of Lords in Re Gulbenkian’s Settlements [1970] affirmed that certainty of objects demands conceptual certainty, meaning the description of the class must be clear in its meaning. However, the pivotal development occurred in McPhail v Doulton [1971], where the House of Lords reformulated the test for discretionary trusts. Lord Wilberforce established the ‘is or is not’ test: a trust is valid if it can be said with certainty whether any given individual is or is not a member of the class. This replaced the former complete-list requirement and introduced greater flexibility. Nevertheless, the decision also requires that the trust remains administratively workable. Subsequent cases, including Re Baden’s Deed Trusts (No 2) [1973], have grappled with evidential difficulties, revealing that while conceptual certainty is essential, practical challenges in proof may still undermine validity. These developments illustrate equity’s responsiveness to commercial and familial trust structures.
Practical Challenges and Doctrinal Limitations
Despite judicial clarification, certainty of objects continues to present difficulties. Conceptual uncertainty arises where the class description is inherently vague, such as references to ‘dependants’ without further definition. Evidential uncertainty, concerning proof of membership, may be resolved by trustees through reasonable inquiry, yet administrative workability remains a residual concern. For instance, in R v District Auditor ex p West Yorkshire Metropolitan County Council [1986], a trust for ‘all inhabitants’ of a large area failed partly on workability grounds. Critics, including Matthews, argue that the current framework disproportionately favours certainty over settlor intention, potentially frustrating legitimate private arrangements. At the same time, the doctrine encourages precise drafting, thereby reducing litigation. Overall, while the McPhail test represents progress, it leaves scope for ongoing judicial discretion in complex cases.
Conclusion
Certainty of objects remains a cornerstone of trust validity, safeguarding the enforceability and administration of equitable interests. Through the progression from Broadway Cottages to McPhail v Doulton, English law has balanced rigour with flexibility across fixed and discretionary trusts. Nonetheless, the interplay between conceptual certainty, evidential proof and administrative feasibility continues to generate complexity. For practitioners and students alike, mastery of these principles is essential for both analysing existing authorities and advising on effective trust creation in contemporary practice. The doctrine ultimately reflects equity’s enduring commitment to clarity and fairness in property arrangements.
References
- Hayton, D.J. and Mitchell, C. (2022) Hayton, Matthews and Mitchell: Commentary and Cases on the Law of Trusts and Equitable Remedies. 15th edn. Sweet & Maxwell.
- McPhail v Doulton [1971] AC 424.
- Pettit, P.H. (2019) Equity and the Law of Trusts. 13th edn. Oxford University Press.
- Re Baden’s Deed Trusts (No 2) [1973] Ch 9.
- Re Gulbenkian’s Settlements [1970] AC 508.
- Virgo, G. (2018) The Principles of Equity and Trusts. 3rd edn. Oxford University Press.
