a thesis - Institute of Advanced Legal Studies

78 EXPRESS TRUSTS.
In such cases there is really no intention on the part of the
settlor to create the particular trust in fact created; the mistake is
fundamental; but apparently the trust is not void, it is only
voidable; so that if the title of a bond fide purchaser for value
without notice has intervened, as against him, the trust cannot be
revoked. (See Pollock, Contracts, 7th ed. 596 and 605.)
This is, of course, a different matter from mistake in the
expression of intention. That also gives a right to relief, but it
seems to belong to the sphere of contract law rather than the law
of trusts. It is fully dealt with in Pollock on Contracts, 7th ed.
pp. 498 et seq.; and in White & Tudor's Leading Cases in Equity,
7th ed. vol. ii. 798 et scq.
FRAUDULENT PURPOSE.
A trust may likewise be void if the purpose for which it is
created be fraudulent. There are two classes of cases in which this
has acquired a special importance: (1) where the purpose is to
defraud the creditors of the settlor, and (2) where it is to defraud
purchasers from him.
Trusts in Fraud of Creditors.—A trust may be void as against
the creditors of the settlor, either under the statute 13 Eliz. c. 5,
or under the Bankruptcy Act, 1883, s. 47.
13 Eliz. c. 5—omitting unnecessary verbiage—is an act for
"avoiding gifts, grants and conveyances, as well of lands and tenements
as of goods and chattels devised to the intent to delay,
hinder, or defraud creditors and others," and s. 1 declares that
every gift, grant and conveyance of lands, tenements, hereditaments,
goods and chattels, or any of them, by writing or otherwise,
to or for any intent or purpose before declared, shall be deemed
(only against that person hindered, delayed or defrauded) to be
void.
By s. 5 the act is not to extend to any estate or interest in
lands, tenements or hereditaments, goods or chattels upon good
consideration and bond fide conveyed or assured to any person not
having at the time any notice of such fraud.
The statute speaks of fraudulent, not voluntary conveyances.
Consequently, a conveyance cannot be set aside under it merely
because it is voluntary; it must also be shown to be fraudulent.
Conversely, the exception only being in favour of conveyances