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IRC v Broadway Cottages Trust (1955)

Last modified: Thu Feb 23 16:37:37 2006

[1955] Ch 20. A settlment attempted to apply the income of a fund of about £80,000 for the benefit of a number of different categories of individual. The trustees were given full discretion how to distribute the income and, within the schedule of beneficiaries, to whom. It was common ground that the exact set of beneficiaries could not be determined, but that the trust instrument was worded in such a way that it could readily be determined whether a particular individual was within the terms of the trust, or not. The case thus turned on whether the correct test for CertaintyOfObjects was whether a full list of beneficiaries could be drawn up, or whether it was sufficient merely to be able to establish whether some individual was, or was not, a potential beneficiary.

Despite the obvious advantages to using the `is or is not' test of certainty, the Court of Appeal decided to uphold the traditional view that it must be possible to enumerate the beneficiaries. Giving judgement for the Court, Jenkins LJ said:

``We confess to some sympathy for the appellants' argument, which has about it an attractive air of common sense, but we do not think that it can be allowed to prevail. We think the submissions made on behalf of the Crown, to the effect that the trust is not one which the court could control or execute, and that this objection cannot be met by urging the improbability of assistance by the court ever becoming necessary, are well founded.''

For a detailed dicussion, see CertaintyOfObjects.

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