Hunter v Moss [1994] 1 WLR 452

Key point

  • A portion of intangible assets does not have to be segregated from the rest to form the subject of a trust

Facts

  • D owned shares 950 shares of a company with 1000 shares and orally declared a trust of 5% of the share capital or 50 shares in favour of C

Held (Court of Appeal)

  • A valid trust was created for 50 shares

Dillon LJ

  • The facts in this case are distinct from Re London Wine Co, since Re London Wine Co concerned the passing of property in chattels
  • Just as a person can give by will as specified number of shares of a certain class in a certain company, so equally can he declare himself trustee and give beneficial proprietary interest to the beneficiary under the trust

Commentary

  • You can have a contract for fungibles but not a trust
  • The will analogy is criticised as flawed by Hayton: a beneficiary under a will does not have equitable interest as absolute interest (legal and equitable) vests in the executor of a will once the testator passes
  • A practical rationale is that it would be inconvenient to identify share numbers when declaring a trust of part of one’s shares