- The facts to this case are the same as found in McPhail v Doulton (otherwise known as Re Baden’s Deed Trusts (No 1)).
- In McPhail v Doulton, the House of Lords affirmed that upholding the settlor’s intentions was of paramount importance in determining the distribution of trust property to beneficiaries.
- The House of Lords had remanded this case back to the Court of Appeal to be determined under this principle.
- The Court of Appeal held, dismissing the appeal, that to apply the Re Gulbenkian test for a discretionary trust, “conceptual” and “evidential” were distinct. A claimant must provide evidence that they were a beneficiary.
- However, the Court held that there was no inherent conceptual uncertainty in the words “dependants” or “relatives”, and so the clause was held valid.
- Each of the three sitting judges gave different views on why the Baden’s trust was valid:
- Stamp LJ held that the trust was valid because the court could always determine who was a dependant. A relative could also be restricted to the definition of the next of kin for practical purposes.
- Sachs LJ stated:.
- “The court is never defeated by evidential uncertainty… Once the class of persons to be benefited is conceptually certain it then becomes a question of fact to be determined on evidence whether any postulant has on inquiry been proved to be within it: if it is not so proved, then he is not in it.”
- Megaw LJ stated:
- “…the test is satisfied if, as regards at least a substantial number of objects, it can be said with certainty that they fall within the trust; even though, as regards a substantial number of other persons, if they ever for some fanciful reason fell to be considered, the answer would have to be, not ‘they are outside the trust’, but ‘it is not proven whether they are in or out’.”
The full text is available here: http://www.bailii.org/ew/cases/EWCA/Civ/1972/10.html
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