Lehman Brothers International (Europe) [2010]

Key Notes

• Possible Extension to Tangible Fungibles: The case explored the possibility of extending the principles from Hunter v Moss to tangible fungible assets.

• Briggs J's Ruling: Briggs J held that a trust over fungible assets does not fail due to uncertainty, provided that:

◦ The fungible mass is sufficiently identified.

◦ The beneficiary’s proportionate share in that mass is clear and not uncertain.

• Floating Trusts: The court indicated that a trust could still be valid even if the subject matter is uncertain at the moment, as long as the terms of the trust allow for the identification of the subject matter in the future.

• Implications for GoldCorp: This decision suggests that GoldCorp could potentially be found to be sufficient in certain circumstances, as the court implies that floating trusts may be valid where the subject matter is a fungible mass, and it can be sufficiently identified later.

• Development of Trust Law: The ruling supports the idea that trust law can accommodate flexibility in terms of subject matter, particularly when dealing with fungible or intangible assets, and may allow for the creation of floating trusts.

This case advances the notion that uncertainty in the subject matter of a trust does not necessarily invalidate the trust, particularly for fungible or intangible property, and suggests that floating trusts can be valid if the terms of the trust are clear enough to identify the property in the future.