Settlor must have shown an objective intention to

◼ Settlor must have shown an objective intention to create a trust: would a reasonable person consider that the settlor intended
to create a trust? ( Byrnes overturned subjective approach in Joliffe)
◼ Settlor must have indicated, by words (oral or writing) or conduct, that he intended to create a trust.
◼ N.B. Subjective intention still relevant where there are grounds to challenge the transaction – vitiating factor (eg mistake, undue
influence) or sham ( Byrnes, Heydon and Crennan JJ)
(a) If there is a trust deed and it is unambiguous
◼ Then intention is not the focus of question – state that the deed is unambiguous and move on
◼ Byrnes : the opening language of the deed described it as a trust twice
◼ Clause 1 (a key operative provision) used the language of trust
◼ Surrounding circumstances – creation of new trust document affirmed intention to create trust
(b) If ambiguous (e.g. no trust deed – just words)
◼ Look to surrounding circumstances (objectively) (Paul v Constance)
◼ Not necessary to use the word “trust” (Re Armstrong)
◼ Settlor does not even need to realise they are creating a trust (Re Armstrong)

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TUTORIAL 1 – VALIDITY/ INTENTION
What sort of things are you looking for if ambiguous?
◼ Look for specific intention to benefit a third party (Re Armstrong):
◼ George said to bank manager that he wanted to create a fund to benefit his sons.
◼ Bank manager recommended putting in a term deposit (2 years) for the benefit of his 2 sons after he died.
◼ The sons were to be absolutely entitled to the money on his death.