Public Trustee v Butler & Anor

A will may confer a power rather than create a trust where its language gives the trustee discretion over whether and how to distribute income. The court must construe a homemade will according to its ordinary language where the testator was fluent, literate and familiar with managing property. An intended class of beneficiaries cannot be reconstructed by deleting an express essential qualification. A power fails for uncertainty where it is impossible to determine whether an individual satisfies that qualification. Conceptual and evidential uncertainty must be distinguished. Descriptive terms used in a scholarship context may be conceptually certain, but a further requirement that beneficiaries be deserving may remain too uncertain.

The Public Trustee sought directions under Part 8 concerning the construction of clause 6 of the will of Saral Kumar Bose. The clause authorised the trustee, after the death of the testator’s widow, to grant educational scholarships to promising relatives and to use up to one quarter of the income to help deserving cases of material hardship among the relatives.

No beneficiary list referred to in the clause existed. The principal questions were whether clause 6 created trusts or powers, whether the relevant descriptions of beneficiaries were sufficiently certain, and whether the powers infringed the rule against perpetuities.

1. Nature of clause 6. Clause 6 conferred powers only in respect of estate income. The wording differed materially from clause 4, which directed that income be devoted to specified purposes. The court was entitled to give the words used their ordinary meanings. The answer to question 1(a) was therefore Q.1(a)(i): yes.
2. Scholarship power. The requirement for a list of individual names was an essential part of the definition of the eligible class. It could not be removed by blue-pencilling the words referring to the list. Since no list existed, it was impossible to determine whether any individual satisfied the class definition. The scholarship power therefore failed for uncertainty. The answer to question 1(d) was no.
3. The word promising, considered in the context of educational scholarships, was not itself conceptually uncertain. The question was whether a person could benefit from the education for which the scholarship was offered. The court therefore rejected the separate argument that promising necessarily invalidated the provision.
4. Material hardship and deserving cases. A power among relatives is not inherently uncertain. The relevant distinction is between conceptual and evidential uncertainty. The concept of material hardship was sufficiently certain, although the conclusion was reached without hesitation. The further distinction between deserving and non-deserving cases of material hardship had no identifiable criterion and was too uncertain. That power was therefore also invalid. The answer to question 1(j) was no.
5. The suggestion that promising and deserving were merely guides to the trustee did not avoid uncertainty. If such words qualify the beneficiary, uncertainty in the qualification invalidates the power.
6. If either power had been sufficiently certain, section 3 of the Perpetuities and Accumulations Act 1964 would have applied the wait-and-see principle. Questions 1(k) and 1(m) therefore did not arise. The remaining questions were left undecided pending a draft order.