Hunter V Moss

Submitted By Nazib-Ullah
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Pages: 8

English Law is of intermediate (intangible) securities is built almost entirely onthe dubious authority of the court of Appeal’s decision in Hunter v. Moss. In
Hunter v Moss the defendant was the registered holder of 950 shares in acompany with an issued share capital of 1,000 shares. He orally declaredhimself trustee of 5% of the issued share capital in the company which,importantly, the deputy judge, Colin Rimer QC, interpreted as a declaration inrespect of 50 of the 950 shares held by the defendant. However, after judgment had been given in favour of the plaintiff, the defendant applied to thesame judge to have his judgment recalled. The defendant argued inter alia that the judge ought to have held that a declaration of trust of 50 unidentifiedand similar shares out of the 950 held by the defendant did not sufficientlyidentify the specific property to be held by the defendant as the property of theplaintiff and that the trust thereby failed to be properly constituted by reason ofuncertainty of subject matter. The judge dismissed the application. The Courtof Appeal dismissed the defendant's appeal.In the Court of Appeal however Mr
ran a new argument, that even if hehad adequately expressed an intention to create a trust over certain shares hehad in fact been incapable of doing so because he failed to identify thesubject matter of the trust. He contended that it is generally not possible tocreate a trust of part only of property, which is all mixed together until that parthas been in some way segregated and identified from it and madedistinguishable from the remainder.
Re London Wine Co (Shippers)
Two reasons for judgment: The finding of a trust would enforce the terms ofthe employment contract between the parties, and the second was that itmade no practical difference which 50 shares were subject to the trust giventhat there is no qualitative difference between one ordinary share and anotherordinary share (provided that the shares are in one class an in one company).In essence, the CA appeared to hold that it was not necessary to segregatethe property comprising the trust fund if the property was intangible property,like ordinary shares, with each unit being indistinguishable from another unit. Tangible property might have to be sufficiently identified or appropriated. Butwhere the property was intangible and, where it would make no difference tothe parties which part of the mass was applied to carrying out the terms of thetrust, the trust would not fail solely on account of the fact that no property hadbeen identified as trust property.The defendant owned 950 of the 1,000 shares. In a judgment delivered onOctober 16, 1992, Colin Rimer, Q.C. found that there had been an intentionon the part of the defendant to create a trust of 50 of his shares in favor of theplaintiff. The requirements of certainty of intention and objects were, therefore,satisfied. Being personalty, no writing or other formality was required for the declaration to be valid. However, the defendant applied to have the judgmentset aside on the ground that the purported trust failed for want of certainty ofsubject matter. The deputy judge refused to recall his order. The subjectmatter of the trust was defined with sufficient certainty.Dilnot
, A. & Harris, L. ‘
Ownership of a fund
’ (2012) Butterworths Journal of
International Banking and Financial Law.This article examines and analyses the court of Appeal ruling on therequirement of certainty of subject matter in relation to a declaration of trust inrespect of a certa in percentage of a company’s issued share capital
Gordon, K. ‘
The Certainties of Trust

Vol. 158 (2006) Taxation Magazine.This article provided arguments in favour of the judgment of the Court of Appeal in the case of Hunter v. Moss.
Eden, P. ‘
Beneficial Ownership of