Re Baden's Deed Trusts (No 2)

From Wikipedia, the free encyclopedia
  (Redirected from Re Baden’s Deed Trusts (no 2))
Jump to: navigation, search
Re Baden’s Deed Trusts (No 2)
Court Court of Appeal
Citation(s) [1972] EWCA Civ 10, [1973] Ch 9
Case history
Prior action(s) McPhail v Doulton
Case opinions
Stamp LJ, Sachs LJ and Megaw LJ
Keywords
Certainty, express trusts

Re Baden’s Deed Trusts (No 2) [1972] EWCA Civ 10 is an English trusts law case, concerning the circumstances under which a trust will be held to be uncertain. It followed on from McPhail v Doulton,[1] where the House of Lords affirmed that upholding the settlor's intentions was of paramount importance.

Facts[edit]

Mr Bertram Baden settled a trust for the employees, relatives and dependants of his company, Matthew Hall & Co Ltd. It said the net income of the trust fund should be applied by the trustees ‘in their absolute discretion’ and as they thought fit for the employees, relatives and dependants in grants. The House of Lords in McPhail v Doulton[2] held that the trust would in principle be valid if it could be said with certainty that a hypothetical claimant "is or is not" within the class of beneficiaries. The case returned to the lower courts to determine if the trust was in fact enforceable.

Brightman J held the House of Lords decision had overruled previous IRC v Broadway Cottages so that the rule in Re Gulbenkian applied equally to trusts as to powers: a trust was valid if it could be said with certainty that any given individual was or was not a member of a class of beneficiaries, and accordingly the clause was valid as a trust. The executors appealed.

Judgment[edit]

The Court of Appeal held, dismissing the appeal, that to apply the Re Gulbenkian[3] test for a discretionary trust, "conceptual" and "evidential" were distinct. If a claimant could not bring evidence he was a beneficiary, he would not be. But there was no inherent conceptual uncertainty in the words "dependants" or "relatives", and the clause was valid.

The three judges gave different views on why the trust was valid. Stamp LJ held that the trust was valid because the court could always determine who was a dependant and a relative could be restricted to a workable definition of the next of kin. Sachs LJ held the test required only clarity in the concept. He put it as follows.

Megaw LJ viewed the position to be as follows.

He said that requiring complete conceptual certainty would amount to a return to the list certainty test.

See also[edit]

Notes[edit]

  1. ^ [1971] AC 424
  2. ^ [1970] AC 508
  3. ^ [1970] AC 508

References[edit]

External links[edit]