The defendant challenged the finding that an oral express trust applied to 50 of his 950 shares on the basis there was not certainty of subject matter. The trust related to five per cent of a company’s issued share capital. However, all of the shares were identical in one class and the defendant held more than 50 shares. Mr Rimer QC, at first instance, held that the principles applying to a trust of tangible assets (as in Re Wait or London Wine Co) were not the same as applied to a trust of intangibles. He held that the test should be whether, immediately after the declaration of trust, the court could, if asked, make an order for the execution of the trust, which it could only do if the subject-matter of the trust is identified with sufficient certainty. He then held that a declaration as regards a definite number of shares, forming part of a larger holding, was valid, just as a declaration as regards the corresponding proportion of the shares held would have been. He accepted that the trustee’s subsequent dealings with the larger holding might leave doubt as to whether the dealings were with his own retained assets or with the trust assets, but said that such uncertainty would not be as to whether a trust had been validly created, but as to whether the obligations to which it gave rise had been properly discharged.
Held: The appeal failed. It was not necessary to identify any particular 50 shares. The trust was effective.
Judges:
Dillon, Mann, Hirst LJJ
Citations:
[1993] EWCA Civ 11, [1994] 1 WLR 452, [1994] 3 All ER 215
Links:
Jurisdiction:
England and Wales
Trusts
Updated: 27 October 2022; Ref: scu.262616