Re Gulbenkian's Settlements [1970] AC 508

A settlement gave trustees a power to apply income for Nubar Gulbenkian, members of his family and a further class described by their personal or working relationship with him. The disputed words extended to people in whose home or company he might be residing, or by or with whom he might be employed. Those entitled in default challenged the power, arguing that its objects were too uncertain because a complete list of everyone who might satisfy this broad description could not be compiled. The House of Lords had to decide whether a mere power required complete enumeration of its objects and whether the language used supplied a sufficiently definite criterion for testing individual membership.

What certainty of objects is required for a mere power, and was the broad description of people connected with Nubar Gulbenkian conceptually workable?

The House of Lords held that the power was valid. A mere power does not require trustees or the court to compile a complete list of all possible objects. It is sufficient that the language supplies a criterion enabling the decision-maker to say of any given person that he or she is or is not within the class. Conceptual uncertainty in that criterion would be fatal, but evidential difficulty in proving an individual's circumstances does not necessarily invalidate the power. Their Lordships construed the disputed wording so that it had a workable meaning. Although trustees are not obliged to distribute under a mere power, holders of a fiduciary power must periodically consider whether and how it should be exercised.

The objects of a mere power are sufficiently certain if the instrument provides a conceptually clear criterion by which any given individual can be classified as within or outside the class. A complete list is unnecessary. Evidential difficulty about a particular person's status is distinct from uncertainty in the meaning of the class description.

The decision replaced the complete-list approach for mere powers with the individual-postulant test and prepared the ground for McPhail v Doulton to apply a similar test to discretionary trusts. Re Baden (No 2) later exposed different judicial approaches to evidential uncertainty under that framework. Fixed trusts remain different because trustees must know every beneficiary in order to distribute fixed shares, so IRC v Broadway Cottages still requires a complete list in that context. The case also highlights that a fiduciary power is not simply ignored: trustees must consider its possible exercise even though they need not appoint property.