Re Osoba [1979] 1 WLR 247

Facts

  • Mr. Osoba, the testator, executed a will establishing a trust for the maintenance and education of his daughter and the upkeep of his wife.
  • The trust fund was to be used for these purposes during the lifetimes of the named beneficiaries.
  • Upon the deaths of his wife and daughter, the remaining trust funds were to be distributed to other specified individuals.
  • Executors sought court guidance on whether the trust created was valid and how it should be administered.
  • The ambiguity concerned whether the trust was intended as a gift to individuals or as a purpose trust aimed at achieving specific objectives like the advancement of education.

Issues

  1. Whether the trust established by Mr. Osoba’s will was a trust for the benefit of named individuals or an invalid purpose trust.
  2. Whether the language used in the will satisfied the requirements of the beneficiary principle and certainty of objects in English trust law.
  3. Whether the trust instrument’s ambiguity could be resolved through judicial interpretation to ascertain the testator's intent.

Decision

  • The court held that the trust was a gift for the benefit of the named individuals (wife and daughter), not a purpose trust.
  • The provisions for maintenance and education, as well as upkeep, indicated the testator’s intention to benefit his immediate family directly.
  • The trust satisfied the beneficiary principle as the beneficiaries were ascertainable individuals.
  • Ambiguity in the will was resolved in favour of interpreting the trust as a gift to individuals, making the trust valid.
  • The trust was administered according to the intention to benefit the named individuals rather than fulfill a wider purpose.

Legal Principles

  • A valid trust must have identifiable beneficiaries, according to the beneficiary principle.
  • Certainty of objects requires that beneficiaries are clearly defined or ascertainable.
  • Purpose trusts are generally void under English law unless within specific exceptions.
  • Judicial interpretation can resolve ambiguities in trust instruments by discerning the testator's true intent.
  • The court emphasized clarity and precision in drafting trust instruments to ensure enforceability.

Conclusion

The Court of Appeal in Re Osoba clarified that a trust worded for the maintenance and education of named individuals is construed as a valid gift for those individuals, reaffirming that trusts must have ascertainable beneficiaries and underscoring the importance of careful judicial construction of ambiguous trust instruments in English law.

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