''Re Gulbenkian’s Settlements Trusts''

968 Year 968 ( CMLXVIII) was a leap year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Emperor Nikephoros II receives a Bulgarian embassy led by Prince Boris (th ...

is an English trusts law case, concerning the

certainty Certainty (also known as epistemic certainty or objective certainty) is the epistemic property of beliefs which a person has no rational grounds for doubting. One standard way of defining epistemic certainty is that a belief is certain if and o ...

of trusts. It held that while the 'is or is not' test was suitable for mere powers, the complete list test remained the appropriate test for discretionary trusts. It was only a year later in ''

McPhail v Doulton , also known as ''Re Baden's Deed Trusts (No 1)'' is a leading English trusts law case by the House of Lords on the certainty of beneficiaries. It held that so long as any given claimant can clearly be determined to be a beneficiary, or not, a ...

'' that the 'is or is not' test was considered appropriate for discretionary trusts by a different panel of their lordships.

Facts

Calouste Gulbenkian Calouste Sarkis Gulbenkian (, Western hy, Գալուստ Կիւլպէնկեան; 23 March 1869 – 20 July 1955), nicknamed "Mr Five Per Cent", was a British-Armenian businessman and philanthropist. He played a major role in making the petrole ...

, a wealthy

Armenia Armenia (), , group=pron officially the Republic of Armenia,, is a landlocked country in the Armenian Highlands of Western Asia.The UNbr>classification of world regions places Armenia in Western Asia; the CIA World Factbook , , and ' ...

n oil businessman and co-founder of the

Iraq Petroleum Company The Iraq Petroleum Company (IPC), formerly known as the Turkish Petroleum Company (TPC), is an oil company that had a virtual monopoly on all oil exploration and production in Iraq between 1925 and 1961. It is jointly owned by some of the worl ...

, made a settlement in 1929 that said the trustees should ‘in their absolute discretion’ and while his son Nubar Gulbenkian was still alive, give trust property to 'Nubar Sarkis Gulbenkian and any wife and his children or remoter issue for the time being in existence whether minors or adults and any person or persons in whose house or apartments or in whose company or under whose care or control or by or with whom the said Nubar Sarkis Gulbenkian may from time to time be employed or residing'. It was argued this was too uncertain to be enforced.

Judgment

At first instance, Goff J declared the settlement invalid, following '' Re Gresham's Settlement'' where Harman J held a similar clause invalid.

Court of Appeal

The Court of Appeal held that the trust should be declared valid, so long as any claimant could be said to fall within the class at hand. Lord Denning MR said the action was a challenge to ''Gresham’s case'', and continued.

Ch 126, 134 Danckwerts LJ and Winn LJ agreed that the decision should be overturned and held the trust valid.

House of Lords

The House of Lords held for powers of appointment, objects were sufficiently certain if any given individual could be said to be in, or not in, the class. (So this was more relaxed than list certainty, which requires everyone to be said to be in the class.) Lord Upjohn reaffirmed the list certainty test for discretionary trusts, but then in ''

'', the list certainty test was abandoned for discretionary trusts as well. Lord Reid said, 'It is often difficult in a particular case to determine whether a temporary sojourn amounts to "residence".' But he held that it was certain enough to succeed.

Notes

References