The Three Certainties

Introduction

For a **valid express trust** to come into existence, the settlor must do more than use the word 'trust'. The trust must satisfy the **three certainties**, the test classically stated by Lord Langdale MR in **Knight v Knight (1840)**: **certainty of intention**, **certainty of subject matter** and **certainty of objects**. This chapter examines each limb in turn — what it requires, the leading authorities, and the consequences when a limb is not satisfied — all of which are core, frequently-tested material for SQE1 FLK1.

Assessment focus

The three certainties are a **staple of the SQE1 FLK1 trusts syllabus**. Questions are single best answer questions (SBAQs) set in **realistic client-based scenarios**: you will be given facts and asked whether a valid trust has arisen, or which certainty (if any) has failed and what the **consequence** is. You must be able to (i) recognise an intention to create a trust as opposed to a gift or merely **precatory** words; (ii) apply the **Hunter v Moss** distinction between intangible and tangible property for certainty of subject matter; and (iii) apply the correct **test of objects** — the **complete list test** for fixed trusts and the **'is or is not' (given postulant) test** for discretionary trusts. This is a closed-book assessment — recall the tests, the leading cases and the consequences of failure from memory.

Study tips

1) Memorise the source: the three certainties come from **Knight v Knight (1840)**. 2) Learn the **consequences of failure** for each limb — no intention = outright **gift** to the intended trustee; no subject matter = property stays with (reverts to) the **settlor**; no objects = **resulting trust** back to the settlor. 3) For subject matter, remember **Hunter v Moss [1994]**: a fraction of **intangible** (identical) property (e.g. shares) need not be segregated, but **tangible** property (e.g. bottles of wine — Re London Wine) must be. 4) Match the **test to the type of trust**: complete list (fixed) v 'is or is not' (discretionary, from **McPhail v Doulton**). 5) Note the two extra ways a discretionary trust can fail even if objects are conceptually certain: **administrative unworkability** and **capriciousness**.