1 Maitland, F., Equity—A Course of Lectures (Brunyate, ed., 1936), p. 44Google Scholar.

2 Meagher, R.P. and Gummow, W.M.C., Jacobs’ Law on Trusts in Australia (6th edn., Butterworths, 1997), p. 3Google Scholar.

3 See e.g. P. Birks, “Equity in the Modern Law: An Exercise in Taxonomy” (1996) 26 U.W.A.L.R. 1, 19-20.

4 The Privy Council has stated that “the distinction between the legal and equitable estate is of the essence of the trust”: Abdul Hameed Sitti Kadija v. De Saram [1946] A.C. 208, 217, quoting with approval Lee, Introduction to Roman-Dutch Law (3rd edn. 1931).

5 See for example the debate between Austin Scott and Harlan Stone in two essays both entitled “The Nature of the Rights of the Cestui Que Trust” at (1917) 17 Col. L.R. 269 (Scott) and 467 (Stone).

6 Waters, D.W.M., “The Nature of the Trust Beneficiary's Interest” (1967) 45 Can. B.R. 219, 221Google Scholar.

7 The landmark decisions were perhaps Baker v. Archer-Shee [1927] A.C. 844 and Commissioner of Stamp Duties v. Livingston [1965] A.C. 694.

8 The issue arises still in the interpretation of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. See Webb v. Webb [1994] 3 W.L.R. 801; Re Hayward (deceased) [1996] 3 W.L.R. 674.

9 Maitland, op. cit. p. 28.

10 Waters, D.W.M., “The Role of the Trust Treatise in the 1990s” (1994) 59 Missouri L.R. 121Google Scholar; J. Langbein, “The Contractarian Basis of the Law of Trusts” (1995) 105 Yale L.J. 625, 632ff; Simpson, A.W.B., “The Rise and Fall of the Legal Treatise: Legal Principles and the Forms of Legal Literature” (1981) 48 Univ. of Chicago L.R. 632Google Scholar.

11 T. Lewin, A Practical Treatise on the Law of Trusts and Trustees (1837) p. 17.

12 Ibid., at p. 5.

13 These propositions are reflected in the definition of the trust which is to be found in Hanbury and Martin's Modern Equity. “A trust is a relationship recognised by equity which arises where property is vested in (a person or) persons called the trustees, which those trustees are obliged to hold for the benefit of other persons called cestuis que trust or beneficiaries. The interests of the beneficiaries will usually be laid down in the instrument creating the trust, but may be implied or imposed by law. The beneficiary's interest is proprietary in the sense that it can be sold, given away or disposed of by will; but it will cease to exist if the legal estate in the property comes into the hands of a bona fide purchaser for value without notice of the beneficial interest. The subject-matter of the trust must be some form of property. Commonly, it is legal ownership of land or of invested funds; but it may be of any sort of property …” (16th edn. by Jill Martin, Stevens, 2001 at pp. 47-48).

14 Westdeutsche Landesbank Girozentrale v. Islington London Borough Council [1996] A.C. 669, 705.

15 [2002] 2 W.L.R. 802, 825ff.

16 Re Thompson [1934] Ch. 342.

17 Re Endaeott [1960] Ch. 232, 250. Roxburgh J. in Re Astor's Settlement Trusts [1952] Ch. 534, 547 described these cases as “concessions to human weakness or sentiment”.

18 Gartside v. IRC [1968] A.C. 653.

19 (1841) 4 Beav. 115; 49 E.R. 282.

20 Sir Moses Montefiore Jewish Home v. Howell & Co. (No. 7) Pty. Ltd. [1984] 2 N.S.W.L.R. 406. See also Re Beckett's Settlement [1940] Ch. 279, 285, per Simonds J.

21 [1971] A.C. 424. McPhail v. Doulton has not been accepted in Ireland: O’Byrne v. Davoren [1994] 3 I.R. 373.

22 [1973] Ch. 9.

23 There is ample authority for the proposition that if the class of beneficiaries is too wide, then the trust will be void because it is administratively unworkable. Lord Wilberforce, in his speech in McPhail v. Doulton [1971] A.C. 424, gave as an example a trust for the residents of Greater London. In R. v. District Auditor ex p. West Yorkshire Metropolitan County Council [1986] R.V.R. 24, a trust for the benefit of the inhabitants of West Yorkshire (about 2.5 million) people, was held invalid on this reasoning. While some trusts for a large number of potential beneficiaries may be struck down because of administrative unworkability, it is clear from the Baden litigation itself that it is possible to have a very broad and indeterminate class without infringing the administrative workability requirement.

24 An example would be where the death of a person ends the possibility that future born children will enter the class of potential beneficiaries of the trustees’ discretion.

25 Re Smith, Public Trustee v. Aspinall [1928] Ch. 915.

26 [1969] 1 Ch. 373.

27 Ibid. at pp. 382-384.

28 [1979] 3 All E.R. 359, 368.

29 This distinction is well criticised by Moffat. He writes: “One form of discretion is of an administrative nature—‘making rules for the use and enjoyment of land by all those employees able to benefit’—whereas the other—‘discretion to distribute income among a class’—is plainly dispositive.” G. Moffat, Trusts Law: Text and Materials (3rd edn., 1999, with G. Bean, J. Dewar, and M. Milner), p. 201.

30 This was explained by Goff J. in Re Denley [1969] 1 Ch. 373 as a power in partial defeasance of a trust. I am indebted to John Mee for raising the question whether trustees can have powers which partially defeat the trust which they should be upholding.

31 Unreported, 6 Oct. 1978, Ch. D.. (Megarry V.C.).

32 [1985] 1 All E.R. 155.

33 [2002] 2 W.L.R. 802.

34 Ibid., at p. 827.

35 [1965] A.C. 694.

36 Ibid., at p. 712.

37 K. Gray, “Equitable Property” [1994] C.L.P. 157, 165.

38 As Isaacs J. said in Hoysted v. Federal Commissioner of Taxation (1920) 27 C.L.R. 400, 425, a person's “interest in the trust estate at any given moment is measured by the relief which equity is then prepared to give him, that is, by the rights which the due execution of the trusts as framed by the creator of the trusts will at that moment give him.”

39 The rule was well expressed in Gough v. Satterlee 52 N.Y.S. 492, 496, 32 N.Y. App. Div. 33, 40 (1898): “A subject or corpus of a trust is absolutely essential, not merely to the validity of a trust but also to its existence. Courts will supply a trustee; in England at times under the cy pres power, they will select beneficiaries, but in no country will they furnish a trust estate.” For other US authorities see Begier v. Internal Revenue Service 496 U.S. 53, 62 (1990); Salisbury Inv. Co. v. Irving Trust Co. (In re United Cigar Stores Co.) 70 F. 2d. 313, 315 (2nd Cir. 1934); 1 Scott on Trusts 4th edn. (A. Scott and W. Fratcher) s. 3.1; Baron, J., “The Trust Res and Donative Intent” (1986) 61 Tulane L. R. 45Google Scholar.

40 1 Scott on Trusts 4th edn. (A. Scott and W. Fratcher) s. 3.1. A similar distinction is drawn in the Restatement: Restatement (Second) of Trusts (1957) s. 2, comment c.

41 647 S.W. 2d 79 (1983) (Texas Ct. App.).

42 (1854) 2 Drew. 221.

43 See also Smullin v. Wharton 103 N.W. 288 (1905) (Supreme Court of Nebraska) (alleged oral trust of property bequeathed absolutely in the will; the term “bulk of my estate” was too uncertain).

44 (1849) 16 Sim. 476.

45 In this case, the testator devised all his houses in trust to convey one of them to his daughter Maria and the remainder to his daughter Charlotte. Maria was given the choice of her house. She died in the testator's lifetime and consequently did not choose a house. It followed, according to the court, that the beneficial interest of Charlotte failed for uncertainty also, since without Maria making a choice, the court could not determine which houses should be owned by Charlotte. Glanville Williams has pointed out that this was a harsh application of the uncertainty doctrine. The court might have held that the gift was to Charlotte of all the houses save such one, if any, that Maria might choose. See G. Williams, “The Three Certainties” (1940) 4 M.L.R. 20, 24.

46 [1994] 1 W.L.R. 452.

47 This decision was followed in respect of English, but not Australian law, in Re Harvard Securities Ltd. (in liq.) [1997] 2 B.C.L.C. 369. In Australia, the position was left open by Gummow J. in Herdegen v. Federal Commissioner of Taxation (1988) 84 A.L.R. 271, 279.

48 United States Trust Company of NY, Trustee v. Commissioner of Internal Revenue 296 US 481 (1936). “An undivided interest in property may constitute the corpus of a trust” (per Hughes C.J., 487). See also Rollestone v. National Bank of Commerce in St. Louis 252 S.W. 394 (1923); Matter of Estate of Berryman 226 Kan. 116, 595 P. 2d. 1120 (1979).

49 D. Hayton, “Uncertainty of Subject-Matter of Trusts” (1994) 110 L.Q.R. 335.

50 See for example, Birks, P., “Proprietary Restitution: An Intelligible Approach” (1995) 9 Trust Law International 43Google Scholar; P.J. Clarke, “Land Law and Trusts” [1994] All E.R. Rev. 241, 249-251; M. Ockelton, “Share and Share Alike?” [1994] C.L.J. 448.

51 E.g. Walker v. Carboy (1990) 19 N.S.W.L.R. 382; Re Australian Elizabethan Theatre Trust (1991) 102 A.L.R. 681.

52 [1913] 2 K.B. 515, 521. See also in Re Bond Worth Ltd. [1980] Ch. 228, 260-261.

53 (2000) 202 C.L.R. 588.

54 (1988) 13 N.S.W.L.R. 331.

55 Ibid., at pp. 341-342.

56 Ibid., at p. 349.

57 As Hope J.A. pointed out, any uncertainty could only arise from the inadequacy of the records kept by the travel agency, not from anything provided for or envisaged by the agreement: ibid., at p. 342.

58 See e.g. Hayton op. cit., Clarke, op. cit. and Ockelton, op. cit.

59 J. Martin, “Certainty of Subject-Matter: A Defence of Hunter v. Moss” [1996] Conv. 223.

60 Re Hallett's Estate (1880) 13 Ch. D. 696; Re Oatway [1903] 2 Ch. 356.

61 Brady v. Stapleton (1952) 88 C.L.R. 322.

62 [1975] 1 W.L.R. 279.

63 Ibid., at p. 282.

64 S. Worthington, “Sorting Out Ownership Interests in a Bulk: Gifts, Sales and Trusts” [1999] Journal of Business Law 1.

65 [1986] P.C.C. 121. See R. Goode, “Ownership and Obligation in Commercial Transactions” (1987) 103 L.Q.R. 433.

66 [1995] 1 A.C. 74.

67 Re Harvard Securities Ltd. (in liq.) [1997] 2 B.C.L.C. 369.

68 This was an argument utilised at first instance by Colin Rimer Q.C., as he then was, in Hunter v. Moss [1993] 1 W.L.R. 934.

69 [1995] A.C. 74.

70 4 96 U.S. 53 (1990).

71 26 U.S.C. sec. 7501.

72 Marshall J, who wrote the opinion of the court, dealt with the absence of identifiable property held on trust (in relation to the payments out of general funds) by stating that the statute created a trust which was different in kind to the common law trust. The statutory trust was created in an abstract dollar figure which was not tied to any specific assets.

73 496 U.S. 53, 70 (1990).

74 This aspect is considered below.

75 [1948] Ch. 465, 551-552.

76 (1988) 13 N.S.W.L.R. 331.

77 59 D.L.R. 4th 726 (1989) (Sup. Ct. Canada).

78 Another ground for decision was that a provincial legislature cannot change the order of priorities in the federal bankruptcy law by defining certain obligations as giving rise to a trust. For discussion of this and subsequent cases see Grenon, A., “Common Law and Statutory Trusts: In Search of Missing Links” (1995) 15 Estates and Trusts Journal 109Google Scholar.

79 496 U.S. 53, 71 (1990).

80 [1992] B.C.L.C. 350.

81 [1998] 3 N.Z.L.R. 171.

82 Countess of Bective v. Federal Commissioner of Taxation (1932) 47 C.L.R. 417.

83 See, e.g., Re Andrew's Trust [1905] 2 Ch. 326; Re Osoba [1979] 1 W.L.R. 247.

84 See, e.g., Curtis v. Rippon 5 Madd. 434 (1820); Mussoorie Bank v. Raynor (1882) 7 App. Cas. 321 (P.C., on appeal from India).

85 [1965] 1 W.L.R. 969.

86 To similar effect is the decision in State for Use of Woodlands Cemetery Co. v. Lodge 41 Del. 125, 16 A. 2d. 250 (1940). A trust was upheld where the testatrix directed the executor to pay to the Woodlands Cemetery “a sum sufficient to keep in perpetual care, out of the interest therefrom,” the family burial lots. The Superior Court of Delaware held that it was sufficient that the amount of the legacy be made determinable upon some reasonable basis of computation.

87 (1843) 2 Hare 607, 610. For an application of this by the Supreme Court of the United States see Colton v. Colton 127 U.S. 300 (1888).

88 Heydon, J. and Loughlan, P., Cases and Materials on Equity and Trusts (6th edn., Butterworths 2002), pp. 449–450Google Scholar, Parkinson, P., “Chaos in the Law of Trusts” (1991) 13 Sydney Law Review 227Google Scholar.

89 Rickett, C., “The Classification of Trusts” (1999) 18 N.Z. Universities L.R. 305, 309Google Scholar.

90 Mr. Paul Matthews has offered a spirited defence of “a truth about trust law, which is that fundamentally it is based on there being an equitable owner of the property or interest given” (Matthews, P., “The New Trust: Obligations Without Rights?” in Oakley, A., (ed.) Trends in Contemporary Trust Law (1996) 1, at p. 18Google Scholar). This analysis relies on criticising a number of cases of high authority as wrongly decided or to be construed in a way which is reconcilable with the proposition being defended but which is inconsistent with the reasoning adopted in the case.

91 See, e.g., the explanation for the Quistclose trust given by Gummow J. in Re Australian Elizabethan Theatre Trust (1991) 102 A.L.R. 681. See also the analysis of Lord Millett in Twinsectra Ltd. v. Yardley [2002] 2 W.L.R. 802.

92 (1988) 165 C.L.R. 107.

93 The difficulty of working out who is the “settlor” has also arisen in relation to payments into pension plans for defined benefits. See Hockin v. Bank of British Columbia 71 D.L.R. (4th) 11 (1992) at p. 20.

94 [1970] A.C. 567.

95 N. McBride, “On the Classification of Trusts” in P. Birks and F. Rose (eds.) Restitution and Equity, Vol. 1: Resulting Trusts and Equitable Compensation (2000), 23 at p. 24.

96 R. Chambers, Resulting Trusts (1997) especially at pp. 220ff.

97 G. Elias, Explaining Constructive Trusts (1990).

98 McBride, op. cit. at p. 38.

99 This is consistent with the approach taken by Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v. Islington London Borough Council [1996] A.C. 669, 705. He stated that the guiding principle in the law of trusts is that “equity operates on the conscience of the owner of the legal interest.”

100 This is the basis of certain constructive trusts, e.g., Grant v. Edwards [1986] Ch. 638; Green v. Green (1989) 17 N.S.W.L.R. 343. While such trusts are sometimes said to be based on the parties’ common intentions, it is the intention of the legal owner which is relevant and, as these two cases show, the representation made to the plaintiff does not necessarily correspond to the subjective intention of the legal owner. Such cases are best understood as applications of the doctrine of estoppel: P Parkinson, “Estoppel” in P Parkinson (ed.), Principles of Equity (1996) 201, at pp. 263-264.

101 A constructive trust may of course be imposed even where an enrichment is not made at the expense of the plaintiff, for example where an employee submits a tender in competition with the employer, and the employer would in any event not have gained the contract: Green & Clara Pty. Ltd. v. Bestobell Industries [1982] W.A.R. 1.

102 Timber Engineering Co. Pty. Ltd. v. Anderson [1980] 2 N.S.W.L.R. 488, 504.

103 [1900] 2 Ch. 326.

104 Ottaway v. Norman [1972] Ch. 698.

105 (1921) 21 S.R. (NSW) 400.

106 For a similar kind of case, interpreted as a trust, see Gordon v. Gordon 124 N.E. 2d 226 (1955) (Sup. Ct. of Massachusetts).

107 [1998] Ch. 241, 253.

108 P. Matthews, “The New Trust: Obligations Without Rights?” in A. Oakley (ed.), Trends in Contemporary Trust Law (1996) 1, at pp. 18-28.

109 Hague Convention on the Law Applicable to Trusts and Their Recognition, 1984.

110 See D. Hayton, “The Irreducible Core Content of Trusteeship” in A. Oakley (ed.), Trends in Contemporary Trust Law (1996) p. 47.

111 Ibid., at p. 26.

112 For discussion of the notion of the trust as a form of contract, see Langbein op. cit.

113 Schedule 1, para. 7.

114 Armitage v. Nurse [1998] Ch. 241.

115 Bryan, M., “Reflections on Some Commercial Applications of the Trust” in Ramsey, I. (ed.), Key Developments in Corporate Law and Trusts Law: Essays in Honour of Professor Harold Ford (Lexis Nexis, Sydney, 2002), 205 at 208Google Scholar.

116 D. Hayton, “Developing the Obligation Characteristic of the Trust” (2001) 117 L.Q.R. 96.

117 It is this which distinguishes the trust from other forms of obligation, for the obligation is equitable in nature and consequently enforceable by means of the full range of equitable remedies appropriate to the situation.

118 On this definition, it is sufficient that the trustee has legal title to identifiable property. That property may be held within a larger mass as long as it is capable of identification within that mass. This definition also covers the situation where a trustee is required to provide for another person out of an estate, for the subject-matter of the trust is identified, and the definition does not require precise quantification of the amount to be used for the purposes of satisfying the trust obligation.

119 This requirement deals with one of the objections to the trust in Re Astor's Settlement Trusts [1952] Ch. 534 that it was too vague.

120 On this definition, it is not necessary that the enforcer be provided for expressly in the terms of the trust. It is sufficient that the court will recognise that it was the intention of the settlor that certain persons should have a right of enforcement. In Re Denley [1969] 1 Ch. 373, Goff J. took the view that the employees of the company for whose benefit the sports ground was to be established would have such an enforcement right. Creditors or shareholders intended to be assisted under a Quistclose arrangement might in certain circumstances have been intended to be able to enforce the trust. So too, might a lender.

121 This part of the definition is necessary in order to bring the charitable trust within the definition. Charitable trusts are enforceable by the Attorney-General as a matter of law, not because this is so provided in the trust instrument.