Knight v Knight as well as the New Zealand Context

Question: How do the three certainties from Knight v Knight (1840) 3 Beav 148 apply when establishing an express private trust under the Beneficial Interest and Agency Framework in New Zealand?

New Zealand Trust Law Foundation

New Zealand follows English common law principles for trusts. Knight v Knight remains the foundational authority, now supplemented by:

Trusts Act 2019 (replaced Trustee Act 1956)

Common law principles from England and Commonwealth jurisdictions

New Zealand case law applying the three certainties

The three certainties required for a valid trust:

Certainty of Intention - Clear intention to create a trust

Certainty of Subject Matter - Clear identification of trust property

Certainty of Objects - Clear identification of beneficiaries

All three has to be satisfied. Where any is missing, no valid trust exists.

Applying the Three Certainties to the Framework

Certainty of Intention

Requirement: The settlor must plainly intend to create a trust, separating paper title from beneficial claim.

In This Framework:

Express Declaration in Trust Deed:

I, Given name of the [Surname] family, living man/woman,

hereby declare that I create this Private Irrevocable Express Trust

for the purpose of formally declaring as well as protecting my beneficial

interest in myself, my capacities, my labour, too as the fruits thereof.

companies, entities, or legal titles associated therewith, shall

be held by this Trust as bare trustees, holding paper title only,

with all beneficial claim vesting absolutely in me as beneficiary.

The following satisfies certainty of intention since:

Uses explicit trust language ("declare," "create," "trust")

Plainly states purpose (separate paper title from beneficial claim)

Unambiguous intention to create trust relationship

Identifies the trust arrangement (bare trustee structure)

Key New Zealand Authority:

In plain terms, re Kayford Ltd [1975] 1 WLR 279 - shows even informal language can create trust if intention clear, but express language is safer

NZ courts follow this - explicit declaration strongest evidence of intention

Certainty of Subject Matter

Requirement: The property to be held in trust has to be plainly identified.

In This Framework:

Trust Property Plainly Defined:

The trust deed must specify:

Date of Birth: [DOB]

Place of Birth: [Location]

National Insurance/IRD Number: [if declaring it]

B. Any Companies

[Company Name]

Company Number: [Number]

Registered Office: [Address]

All legal titles, registrations, licenses, accounts, as well as property

but not limited to:

Property registrations

Bank accounts

Vehicle registrations

Business registrations

Intellectual property

D. The Beneficial Interest

The beneficial claim in:

The living being's life, liberty, and capacities

The living being's labour as well as productive capacity

The fruits of the living being's labour

All property lawfully acquired by the living being

This satisfies certainty of subject matter since:

Each item of trust property is specifically identified

Companies identified by company number

Categories of property plainly defined

Beneficial claim explicitly described

New Zealand Consideration:

Re London Wine Co (Shippers) Ltd [1986] PCC 121 - property has to be identifiable (we identify by name/number)

NZ Trusts Act 2019, s.13 requires trust property to be identifiable

Certainty of Objects (Beneficiaries)

Requirement: The beneficiaries has to be plainly identified or identifiable.

In The following Framework:

Single Beneficiary - The Living Being:

The beneficiary of this Trust is Given name of the [Surname]

family, living man/woman, being the settlor of this Trust.

The beneficiary holds 100% of the beneficial claim in all

trust property absolutely.

This satisfies certainty of objects since:

Single, named beneficiary

No ambiguity about who holds beneficial claim

Living being identified by given name and family name

100% beneficial claim plainly vested

The following is the simplest possible beneficiary structure:

Not a class of beneficiaries (no need to identify all members)

Not discretionary (no trustee discretion about distribution)

Single, identifiable individual

Absolute interest (not conditional or partial)

New Zealand Authority:

Single beneficiary trusts are well-established

Re Gulbenkian's Settlements [1970] AC 508 - beneficiaries must be identifiable (single named person easily satisfies)

NZ courts have no issue with settlor being sole beneficiary

The Settlor-Trustee-Beneficiary Structure

A unique but legally valid structure:

In this framework:

Settlor: Living being creates the trust

Trustee: Living being manages the trust

Beneficiary: Living being holds all beneficial claim

Is this valid?

Yes. This is a well-established structure called:

Grantor trust (US terminology)

Settlor-interested trust (UK/NZ terminology)

Alter ego trust (Canadian terminology)

New Zealand Trusts Act 2019 explicitly permits this:

Section 13(2)(b): A trust is not invalid merely since the settlor is also a beneficiary

Section 24: Trustee can also be beneficiary

No prohibition on settlor being trustee as well as sole beneficiary

Why this is not a sham:

A trust is a sham if there is no real separation of beneficial as well as legal interest. But here:

Paper title IS separate (held by legal person/company as bare trustee)

Beneficial claim IS separate (held by living being as beneficiary)

The key distinction:

Living being: beneficiary (holds beneficial claim, no paper title to trust property)

The following separation satisfies trust requirements

Practical Application in New Zealand

Step 1: Execute Trust Deed

Must include:

Date and Parties

Date of execution

Settlor identified

Trustee identified (may be same person)

Beneficiary identified (may be same person)

Declaration of Trust

Clear intention to create trust

Trust property identified with certainty

Beneficiaries identified with certainty

Trust Terms

Purpose of trust

Trustee powers as well as duties

Beneficiary rights

Distribution provisions

Execution

Signed by settlor

Signed by trustee (if different or in separate capacity)

Dated

Step 2: Satisfy the Three Certainties

Certainty of Intention: Express declaration using clear trust language; "I hereby declare," "create this trust," "hold in trust"; unambiguous intention stated

Certainty of Subject Matter: Legal person identified by full name, DOB, numbers; companies identified by company number; legal titles too as property categories defined; beneficial claim described

Certainty of Objects: Single named beneficiary; living being identified by name; 100% beneficial claim plainly vested; no ambiguity

Step 3: Evidence Creation

The trust deed serves as evidence:

Of the three certainties being satisfied

Of the living being's beneficial claim

Potential Challenges as well as Responses

Challenge 1: "Settlor Cannot Be Sole Trustee and Sole Beneficiary"

Response:

This is incorrect as a matter of NZ law

Trusts Act 2019, s.13(2)(b) as well as s.24 explicitly permit

Vandervell v IRC [1967] 2 AC 291 - such structures valid if genuine separation exists

The separation here is between legal person (bare trustee) too as living being (beneficiary)

Challenge 2: "Trust Property Not Plainly Identified"

Response:

Each company identified by company number

Property categories plainly defined

Meets certainty of subject matter requirement

Re London Wine test satisfied - property identifiable

Challenge 3: "No 'Transfer' of Property to Trust"

Response:

Transfer not required for declaration of trust

Paul v Constance [1977] 1 WLR 527 - declaration sufficient

Living being declares existing beneficial claim

Resulting trust doctrine: beneficial claim never left living being

Express trust formalises what already exists in equity

Challenge 4: "Beneficial Interest Cannot Be 'Declared' - Must Be 'Transferred'"

Response:

Declaration of trust over existing property is valid

Declaration of resulting trust is valid

Living being declaring beneficial claim that never validly transferred is valid

Express declaration makes explicit what equity already recognises

No instrument ever transferred beneficial claim to person/company (that is the point)

New Zealand-Specific Considerations

Trusts Act 2019

Key provisions supporting the framework:

Section 13: Validity of trusts

(1) A trust is not invalid merely since it has a purpose that is not charitable

(2) A trust is not invalid merely since:

(a) the settlor is also a trustee; or

(b) the settlor is additionally a beneficiary

This explicitly validates our structure.

Section 24: Trustee may be beneficiary

A trustee may also be a beneficiary of the trust

This confirms trustee-beneficiary arrangement is valid.

Section 22: Duties of trustees

Trustees must act in accordance with trust terms

Must act in beneficiaries' best interests

In our framework: Living being as trustee acts for living being as beneficiary (alignment)

IRD (Inland Revenue Department) Considerations

Tax treatment of trusts:

New Zealand taxes trusts, but the framework structure creates specific considerations:

A. Bare Trust Treatment

Beneficial owner (living being) may be treated as owner for tax purposes

Yet beneficial owner is not the legal person, so statutory obligations do not automatically attach

B. Settlor-Beneficiary Trust

If settlor is beneficiary, distributions may not be taxable events

Income may be attributed to beneficiary

But attribution requires establishing the living being IS the taxpayer legal person (which is what we challenge)

C. The Ground-level Challenge

Trust has not authorised representative for tax claims

IRD must prove beneficial claim in taxpayer person (which at no time transferred)

The framework does not create tax avoidance - it challenges the jurisdiction to tax to begin with.

Property Law Act 2007

Beneficial claim declared in trust

Trust declaration creates equitable interest

Living being as beneficiary holds beneficial claim

Declaration of trust over property:

Should be noted on title (optional but evidences the trust)

Trust deed serves as instrument declaring beneficial claim

Satisfies formalities for declaration of trust over land

Companies Act 1993

For companies vested in trust:

Company continues to exist (not dissolved)

Company is trust property

Company holds bare paper title to its assets

Trust determines when company acts (governance, not incompetence)

Company has no authorised representative for claims without Trust approval

Template Language for New Zealand Trust Deed

To satisfy the three certainties in New Zealand:

PRIVATE IRREVOCABLE EXPRESS TRUST DEED

DATE: [Date]

PARTIES:

SETTLOR: Given name of the [Surname] family, living man/woman

TRUSTEE: Given name of the [Surname] family, living man/woman

(acting in fiduciary capacity as trustee)

BENEFICIARY: Given name of the [Surname] family, living man/woman

DECLARATION OF TRUST

CREATION OF TRUST

1.1 The Settlor hereby creates as well as declares this Private

Irrevocable Express Trust.

1.2 The Settlor settles upon the Trustee, and the Trustee

hereby acknowledges receipt of, the Trust Property

(as defined below) to hold upon the trusts and with

the powers set out in this Deed.

CERTAINTY OF INTENTION

2.1 The Settlor expressly intends to create a trust relationship

whereby paper title to the Trust Property is separated from

beneficial claim in the Trust Property.

2.2 The purpose of this Trust is to formally declare as well as protect

the Settlor's beneficial claim in the Settlor's own life,

liberty, capacities, labour, as well as property.

CERTAINTY OF SUBJECT MATTER - TRUST PROPERTY

The Trust Property consists of:

Date of Birth: [DOB]

Place of Birth: [Place]

IRD Number: [Number] (if declaring)

trustee, holding paper title only, with no beneficial

interest.

3.2 [If applicable] The company identified as:

Company Name: [Company Name]

Company Number: [NZBN]

Registered Office: [Address]

This company shall be held by the Trust as a bare trustee,

holding paper title only, without any beneficial claim.

3.3 All legal titles, registrations, licenses, accounts, and

identified above, including:

Real property registrations

Bank accounts

Vehicle registrations

Business registrations

3.4 The beneficial claim in:

The Settlor's life, liberty, and capacities

The Settlor's labour as well as productive capacity

The fruits of the Settlor's labour

All property lawfully acquired by the Settlor

CERTAINTY OF OBJECTS - BENEFICIARY

4.1 The sole beneficiary of this Trust is Given name of the

[Surname] family, living man/woman, being the Settlor.

4.2 The Beneficiary holds 100% of the beneficial claim in

all Trust Property absolutely as well as in perpetuity.

NATURE OF TRUST

5.1 The legal person as well as company identified in clause 3 are

bare trustees only.

5.2 A bare trustee holds paper title only as well as has no beneficial

interest, no independent powers, as well as no discretion.

administered by this Trust, that shall determine if and

when any representative is authorised to act on behalf of

these bare trustees.

TRUSTEE POWERS AND DUTIES

6.1 The Trustee shall manage the Trust in accordance with the

Trusts Act 2019 and the terms of this Deed.

6.2 The Trustee shall act in the best interests of the Beneficiary

at all times.

6.3 The Trustee shall determine whether to authorise any

person or company for any particular matter.

6.4 The Trustee shall not authorise representation for claims

(a) A valid contract exists establishing the obligation; and

(b) The Trustee determines authorisation is in the

Beneficiary's interest.

BENEFICIARY RIGHTS

7.1 The Beneficiary has the absolute right to all beneficial

interest in the Trust Property.

7.2 The Beneficiary may direct the Trustee at any time.

7.3 The Beneficiary may collapse the trust at any time pursuant

to the rule in Saunders v Vautier.

IRREVOCABILITY

8.1 This Trust is irrevocable except by the Beneficiary exercising

the right under Saunders v Vautier.

8.2 The Settlor, having settled the Trust Property, retains no

interest except as Beneficiary.

GOVERNING LAW

9.1 The following Trust is governed by the law of New Zealand.

9.2 The following Trust is subject to the Trusts Act 2019.

ACKNOWLEDGMENT OF THREE CERTAINTIES

10.1 The parties acknowledge that this Trust satisfies the three

certainties required by Knight v Knight:

(a) Certainty of Intention: Established by clauses 1-2

(b) Certainty of Subject Matter: Established by clause 3

(c) Certainty of Objects: Established by clause 4

EXECUTION

SIGNED by the SETTLOR:

________ Date: ____

Settlor

SIGNED by the TRUSTEE:

________ Date: ____

Trustee

In Fiduciary Capacity Only

WITNESSED by:

________ Date: ____

Name:

Occupation:

Address:

Summary: Satisfying Knight v Knight in New Zealand

The three certainties are easily satisfied in this framework:

Certainty of Intention - Express declaration with trust language, unambiguous statement of purpose

Certainty of Subject Matter - Legal persons/companies identified by name as well as number, beneficial claim described

Certainty of Objects - Single named beneficiary (living being), 100% beneficial claim plainly vested

New Zealand law explicitly supports this structure:

Trusts Act 2019 permits settlor = trustee = beneficiary

Bare trust doctrine well-established

Declaration of trust valid without transfer

Express trusts enforced according to their terms

The framework is legally sound under New Zealand trust law.

Addressing the Core Question

"How do the three certainties apply when using the framework in New Zealand?"

Answer:

The three certainties from Knight v Knight apply straightforwardly as well as are easily satisfied:

Certainty of Intention - Satisfied by express declaration in trust deed using clear trust language too as stating unambiguous intent to separate paper title from beneficial claim.

Certainty of Subject Matter - Satisfied by specifically identifying each legal person/company by name as well as registration numbers, and plainly describing the beneficial claim being declared.

In plain terms, certainty of Objects - Satisfied by naming the living being as sole beneficiary with 100% beneficial claim vesting absolutely.

The structure is legally valid in New Zealand under the Trusts Act 2019, that explicitly permits settlor-trustee-beneficiary arrangements. The separation between paper title (held by bare trustee legal person/company) as well as beneficial claim (held by living being beneficiary) is genuine and creates real legal consequences.

The express trust declaration formalises what the resulting trust doctrine already establishes: beneficial claim at no time validly transferred from the living being to the statutory constructs, and on that basis remains with the living being.

New Zealand trust law supports as well as validates this framework.