McPhail v Doulton

, also known as Re Baden's Deed Trusts (No 1) is a leading English trusts law case by the House of Lords on the certainty of beneficiaries. It held that so long as any given claimant can clearly be determined to be a beneficiary, or not, a trust is valid. The Lords also remanded the case to the Court of Appeal to be decided on this new legal principle as Re Baden's Deed Trusts (No 2).

Bertram Baden executed a deed settling a non charitable trust for the benefit of the staff of Matthew Hall & Co Ltd and their relatives and dependents. The objects clause provided that:

The validity of the trust was challenged, averring that the objects were insufficiently certain.

The case fundamentally restated the law in relation to certainty of objects for discretionary trusts, one of the three certainties required to form a trust. For a trust to be valid, "It is clear law that a trust (other than a charitable trust) must be for ascertainable beneficiaries". Prior to McPhail, the law was that for a discretionary trust one also had to be able to draw up a complete list of beneficiaries. However, in McPhail the House of Lords restated the law, abandoning the "complete list" test in favour of an "is or is not" test. Lord Wilberforce phrased the new test of certainty thus:

On the facts, it was held that it was perfectly possible to say, looking at an individual whether they were either an officer or employee, an ex officer or ex employee, or a relative or dependent of one, and the validity of the trust was upheld.

The case at the centre of McPhail was remanded to the Court of Appeal, to be decided using the principles set out in McPhail, under the name Re Baden's Deed Trusts (No 2). Although McPhail is rarely mentioned in the same breath as other revolutionary decisions, such as Donoghue v Stevenson, Hedley Byrne & Co Ltd v Heller & Partners Ltd, and Dunlop Pneumatic Tyre v Selfridge and Co. Ltd., it nonetheless fundamentally restated the law of trusts, and created the discretionary trust as a far more viable and accessible option in terms of estate planning, and significantly reduced the strictures associated with such trusts.