Hunter v Moss [1994]

Facts

• Moss owned a company and declared a trust over 50 out of 950 shares in the company.

• It was clear from Moss's statement that there was an intention to create a trust, but he did not specify which 50 shares were to be held on trust.

• The only issue was whether the subject matter (the 50 shares) was sufficiently certain to create a valid trust.

Outcome

• The court held that the subject matter of the trust was sufficiently certain despite the lack of identification of specific shares.

• The trust was upheld, and it was determined that it did not fail due to uncertainty about which shares were included.

• Briggs J: Suggested that the trust could be considered a "floating trust," which allows the subject matter to be identified in the future, thus resolving the uncertainty.

• Dillon J: Clarified that the rule from this case would not apply to shares in different companies or of different classes. In this case, all shares were of the same class and within the same company.

Key Notes

• Interpretations of the case:

1. Shares as homogenous (fungible):

Shares in the same company and of the same class are considered substantively identical, so it doesn’t matter which 50 shares are selected, as each share is essentially the same.

▪ The case contrasts with other assets, such as sheep, where identifying specific items is more important because the items may differ in quality or other characteristics.

2. Shares as intangible property:

▪ Shares, though they may be evidenced by certificates, are intangible property. The court found that shares can be treated as a collective mass where identification of specific shares is not required.

▪ This reasoning does not apply to tangible property (e.g., gold bars or crude oil), where specific identification is necessary even if the property is homogeneous.

• The court did not explicitly decide between the two interpretations of the case, but it opened the possibility of applying a floating trust in situations where specific property is not identified immediately.

• The case significantly impacts the handling of trusts involving shares and other intangible property, making it easier to create a trust over fungible or intangible assets even if the specific property is not immediately identifiable.