McPhail v Doulton
1970 · [1971] AC 424
Posted By lanbuk.com
- Facts
- Bertram Baden set up a fund for the benefit of the staff of his company and their relatives and dependants, to be applied at the trustees' absolute discretion.
- Issue
- Was the clause a or a power, and what test of certainty of objects applied?
- Held
- The House of Lords held it was a , and that the test for certainty of objects is whether it can be said with certainty that any given person is or is not a member of the class.
- Principle
- Discretionary trusts, like powers, need only the is-or-is-not test, not a complete list.
- Why it matters
- It changed the law on discretionary trusts. The case was then sent back, and the class was held certain in Re Baden's Deed Trusts (No 2).
Words and Latin in this note
- Discretionary trust
- A trust under which the trustees choose which members of a class benefit and by how much. The test of certainty is whether any given person is or is not in the class. Open the note.
- Trust
- An arrangement in which a trustee holds property at law but must use it for beneficiaries, or for a charitable purpose. The beneficiaries have the equitable interest. Open the note.
For study only. By lanbuk.com. Always check current sources and consult a qualified professional.