Re Kayford Ltd [1975] 1 WLR 279 High Court

Kayford Ltd were a mail order company. They received pre-payments from customers and was concerned that they may be facing insolvency. On taking legal advice they opened a separate bank account to deposit the customer's pre-payments. The account was named 'Customer Trust Deposit Account'. Kayford Ltd subsequently did become insolvent and the creditors sought to claim the money in the separate account as part of the company assets.

Held:

Kayford Ltd held the money in the account on trust for its clients.

Megarry J:

"There is no doubt about the so-called “three certainties” of a trust. The subject-matter to be held on trust is clear, and so are the beneficial interests therein, as well as the beneficiaries. As for the requisite certainty of words, it is well settled that a trust can be created without using the words “trust” or “confidence” or the like: the question is whether in substance a sufficient intention to create a trust has been manifested."

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