Certainty of Intention
Discuss about the Corporations Law for Buckhurst Park Properties.
Sufficient certainty must be there in order to create a contract and therefore the present case deals with it. The present issue can be addressed with reference to relevant case laws and apply them accordingly. In this assignment, the selected research methodology is from primary sources.
The concept of certainty of intention is associated with the fact that, whether the trust that was alleged by the individual was intended or not. In cases involving certainty of intention, if the person making the trust transfers the property by applying express motive expecting that the property shall be only used in that particular manner. However, the concept of certain intention does not rely upon the intention on the part of the creator in order to form the trust. In cases involving certainty of trust, the individual can create the trust without even using the terms trust and trustee which can be observed in the case of Star v Star [1935] SASR 263 and Boccalatte v Bushelle [1980] Qd R 180. However, if the trust that has been created is uncertain and unclear and has been made as a result of mistake, then it shall not be considered as a valid trust as observed in the case of Registrar of the Accident Compensation Tribunal (Vic) v Federal Commissioner of Taxation (1993) 178 CLR 145.
Certain requirements are there that can be termed as certainty of subject-matter which is concerned with the fact that, without the application of trust property an express trust ceases to exist. However, the trust that has been created should be identified. In cases involving certainty of subject-matter, properties in trust may be a part of the identical items. In this regard, it is noteworthy to mention here that, the nature of the trust can be ambiguous or unclear if the subject-matter has not been reasonably identified. Similarly, it can be observed in Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271, that both the parties Mr. and Mrs. Herdegen was holding 59 of the total shares while Mrs. Herdegen had 41 shares. In spite of the numbering of the allotted shares, Mr. Herdegen and Mrs. Herdegen were only entitled to hold 37 and 38 shares respectively when a promise was made by Mr. Herdegen that, the shares will be held on the behalf of Mr. Boyden and Mr. Allen. Though the remaining shares will be held by Mr. Herdegen however; there was no proper evidence regarding the matter that whether there was a creation of express trust. The evidence provided by the parties by the parties were not clear and certain. The Court in this regard, decided that, as a result of ambiguous evidence, there was no creation of express trust. The evidences were irrelevant regarding the fact that whether there was any creation of express trust. The parties did not made it clear that whether the nature of the trust was such as it was unclear and uncertain and created confusion regarding the allocation of the shares which can be used in order to create trusts. The nature of the evidence was such that it was ambiguous and it was not clearly mentioned that who was the intended beneficiary of the different shares. In case of White v Shortall [2006] NSWSC 1379, it was observed that, declaration of trusts were ineffective because the nature of the declaration was such that it offended the rule of certainty of the subject-matter.
Certainty of Subject-Matter
Certainty of objects is concerned with the matter that, there shall be failure of trust, if no identification is made regarding the beneficiaries with the application of certainty. The rule of concept of certainty has important exceptions under its purview which can be stated as charitable trusts and anomalous trusts which deals with the trusts applicable in case of animals. The nature of the trust can be fixed or discretionary. Therefore, it is worthwhile to refer here that, in case of certainty of objects, in order to evaluate the level of certainty, it is important to take into consideration that the trust in question is either fixed or discretionary. In the landmark case of Morice v Bishop of Durham (1804) 32 ER 656, certainty of objects in relation to trusts were observed.
It is worthwhile to refer here that, there are three certainties involved with the creation of trusts. Those can be emphasized as certainty of intention, certainty of object and certainty of object. Therefore, in reference to the case laws mentioned above and the facts that have been represented it can be stated that, in order to create express trust, the intention must be clear. Therefore, in the present scenario, the case of Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271 can be referred. This is because in this case there was uncertainty regarding the allocation of the bundle of shares. It was not clear who was the intended beneficiary of the trust in relation to the bundle of shares. Therefore, in the present situation, it can be seen that from the beginning Basil declared himself as the trustee of the 5% of the shares which has been issued in the name of the Basil Electrical Pvt Ltd. However, it can be reasonably observed that, in the presence of the 1000 shares that has been issued to the Basil Electrical Pvt Ltd, the remaining of the allocated 50 shares has not been identified.
The case of White v Shortall [2006] NSWSC 1379 can also be referred because in the same way, the declaration of trusts was ineffective. When Basil declared himself as the trustee of 5%, the declaration was made without proper identification and therefore the declaration of trusts on his part can be stated to be ineffective however, it also offended the rule of the certainty of the subject-matter. If the subject matter of trust has not been reasonably identified then the trust is not certain.
Certainty of Objects
An agency can be defined as a relationship between the agent and the principal, in which the principal delegates authority to the agent to act on behalf of the principal. It can be stated that the principal is liable to the third parties for the acts of the agent working on behalf of the principal. Therefore, it can be inferred that a relationship of agency usually involves two types of contracts. They are:
- Contracts which are made between the principal and the agent, from which the agent derives the authority to act on behalf of the principal.
- Contracts made between the agent and the third party in which the agent indemnifies the principal and acts on behalf of the principal
The authority by which the agent acts on behalf of the principal can be categorized as Actual and Apparent or ostensible Authority.
Actual Authority
Actual authority can be defined as the authority which the principal delegates to the agent to act on his behalf. However, actual authority can be further subdivided into two categories:
- Express Actual Authority
- Implied Actual authority
It is to be stated that a principal is liable to the third parties personally for all the acts done by the agent on his behalf as long as the agent acted within the scope of his authority. A principal cannot be held liable for any act of the agent which has been done beyond the authority delegated to him. In such a case the agent will be liable to the third party personally for breaching implied warranty of acting without authority.
Express actual authority can be defined as the authority which the principal delegates to the agent expressly either in writing or by his conduct. This had been illustrated in the case of Ireland v Livingstone (1872) LR 5 HL 395. In this case, it was held that if a principal delegates the authority expressly, such principal will be bound by the acts. However, it was also held that if the agent exceeds the authority which had been delegated to him by the principal, such agent would be personally liable to the third party. It can also be stated that several provisions of common law extend the scope of authority of the agent for the purpose of protecting the rights of the innocent third parties.
Further, it is important to mention that the law also implies the creation of an agency when a person by his words and conduct pretends to act on behalf of the principal and when the principal also acknowledges the delegation of authority to the agent.
As discussed before, authority can also be implied when such authority is not expressly delegated by the principal to the agent but assumed to have been implied by the nature of relationship shared between the agent and the principal. Implied authority arises when it is impossible to carry out the duties of agent which have been delegated to him by the principal without such implied authority. It is to be mentioned that implied authority can also be called usual authority and is generally not present in written contracts. In the notable case Watteau v Fenwick, the concept of usual authority had been illustrated. In this case, it had been held by Lord Coleridge CJ on the Queen’s Bench that a third party could hold a principal liable for all the acts of the agent which are within his usual authority. In this case the court held that a third party could personally hold liable the principal, whom the third party did not know at the time he sold cigars to is agent who was actually acting beyond hid authority. The owner of the bar had strictly forbidden the bar manager to buy cigars. However, the bar manager had purchased cigars. The court held that it was impossible of the third party who had sold the cigars to know that the manager of the bar was acting beyond his authority as; the act of purchasing the cigars was held to be within the scope of the usual authority of the bar manager. In the case Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549, the court held that usual authority was synonymous as implied authority.
It can be mentioned that authority delegated to the agent by the principal can also be apparent and not actual. Apparent authority can be defined as the authority which is not actually delegated by the principal but is assessed by a reasonable person. Apparent authority arises when the conduct or words of the principal leads a reasonable person to believe that the agent had the authority to act in the behalf of the principal. This had been illustrated in the case of Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480.
Thus, by analyzing the facts of the case it becomes evident that Tina, the director of the company and was acting as the managing director. It has further been provided that the board of directors had the knowledge that Tina was acting as the managing director even though the Board had not appointed her to that position. It thus becomes evident in this case that Tina was acting within the scope of her usual authority when she appointed the group of architects to design the plans on the land of the company. Therefore, it becomes clear that facts of the given case study are similar to that of the Watteau v Fenwick case, in which the court had held that that a third party could hold a principal liable for all the acts of the agent which are within his usual authority. It can be stated that it was impossible for the the group of architects to know that Tina was acting beyond her authority. Further it can be stated that the board of directors did not take reasonable steps to prevent her acting as the managing director.
Conclusion
Thus, to conclude it can be stated that the company is liable to pay the fee of the architect.
Reference List:
Ireland v Livingstone (1872) LR 5 HL 395
Watteau v Fenwick
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
