Knight v Knight

Facts

The testator owned substantial estates. In his will, he left them to a member of his family and expressed his confidence that his successors would act in a particular way, keeping the estates in the male line of the family. He didn't say clearly that they were bound to do so.

After his death, other family members argued that the will had created a binding trust in their favour. The court had to decide whether the words of the will imposed an obligation, or only expressed the testator's wishes.

Issue

Did the testator's words create a trust, binding on the person who received the estates, or were they only a non-binding expression of his hopes?

Decision

Lord Langdale MR held that no trust had been created. The words weren't imperative enough, and the property and people intended to benefit weren't defined with enough certainty.

Reasoning

Lord Langdale explained that words of recommendation, request or hope can create a trust only if three conditions are met:

1. the words must be imperative, so that, taken as a whole, they show an intention to impose an obligation;
2. the subject of the recommendation or wish must be certain; and
3. the objects, or persons intended to benefit, must be certain.

Here, the testator had expressed confidence, not a command. He hadn't clearly identified the property to be held on trust or the people who were to benefit. A court asked to enforce such a trust wouldn't know what to enforce.

Why it matters

Knight v Knight is the classic statement of the three certainties, which every express private trust must satisfy. Each certainty has since developed its own case law.

Certainty of intention. The court looks at the substance, not particular words. "I trust" can be enough, and precatory words aren't.

• In Re Adams and the Kensington Vestry (1884) 27 Ch D 394, a gift to a wife "in full confidence" that she would provide for the children was an absolute gift.
• In Paul v Constance [1977] 1 WLR 527, informal words and conduct were enough to show an intention to create a trust.

Certainty of subject matter.

• In Palmer v Simmonds (1854) 2 Drew 221, "the bulk of my estate" was too uncertain.
• In Re London Wine Co (Shippers) Ltd [1986] PCC 121 and Re Goldcorp Exchange Ltd [1995] 1 AC 74, unsegregated goods couldn't be held on trust.
• In Hunter v Moss [1994] 1 WLR 452, a trust of 50 out of 950 identical shares was upheld, because the shares were intangible and interchangeable.

Certainty of objects. For a fixed trust, it must be possible to draw up a complete list of beneficiaries. For discretionary trusts, the test is the "is or is not" test from McPhail v Doulton [1971] AC 424.

How it comes up in exams

In any express trust problem, test each certainty in turn:

1. Intention: imperative words or conduct, or just a hope?
2. Subject matter: is the trust property clearly identified, and are the beneficial shares clear?
3. Objects: fixed trust (complete list) or discretionary trust (is or is not test)? Is the class conceptually certain, and is it administratively workable?

Then explain the consequences of failure. If intention fails, the recipient usually takes absolutely. If subject matter or objects fail, the property usually goes back to the settlor or the estate on a resulting trust.

Frequently asked questions