LSB July 2018_Web

WILLS & ESTATES
that she would hold property received by
her under the testator’s will on secret trust
as to 20% for Kylie.
The Court found that there was
insufficient evidence to prove that the
testator intended her daughter Cheryl (the
sole beneficiary of the will) to hold the
testator’s estate on trust.
Kylie’s secret trust claim arose out of a
conversation she says she had with Cheryl
and her grandparents. Both the timing
and the content of this conversation were
contentious.
Cheryl wholly denied Kylie’s account of
this alleged conversation and says that it
never took place.
The Court preferred the account Cheryl
gave of the circumstances surrounding the
alleged secret trust. B
Endnotes
1 In that case, a son pressured his father (the
testator) to replace the mother as executor
named in the will and insert the son’s name.
In return, the son promised to be trustee for
his mother and he declared that he would be
executor only in trust for her. The testator’s will
provided to his wife a £50 legacy only. Later on,
the son denied that a trust existed in his mother’s
favour. Lord Guildford held that a secret trust
existed, finding that “[u]pon the whole matter, it
appearing to be, as well a fraud, as also a trust, …
notwithstanding the Statute of Frauds and Perjuries,
though no trust was declared in writing, … [it is] decreed
… for the plaintiff.”
2 See, for instance, Blackwell v Blackwell [1929] AC
318 at 341 per Lord Warrington and Viscount
Sumner at 334; Voges v Monaghan (1954) 94
CLR 231 at 240 per Fullagar and Kitto JJ and
Dixon CJ at 233 (in dissent, though not on these
principles). More recently in Howell v Hyde [2003]
NSWSC 732; Brown v Willoughby [2012] WASC
20; and Misek v McBride [2017] NSWSC 406.
3 Lord Davey in French v French (1902) 1 IR 172
at 230:
“It is now well established … that if a testator
communicates in his lifetime to a proposed devisee
or legatee that he has left him his property,
and expresses a wish that the property should
be disposed of in a particular manner, and the
legatee or devisee by acquiescence or even by
silence, accepts that communication, and the
testator dies without any repudiation, a trust is
fastened upon his conscience, as is said, and he
cannot afterwards either appropriate the property
to his own use or dispose of it otherwise
than in accordance with the wishes which were
thus communicated to him, and which he has accepted.
My Lords, it is said that this jurisdiction
is based upon fraud, and so it is, because if you
once get to this, that it is a trust which is imposed
upon the conscience of the legatee, then
the legatee betrays the confidence in reliance
upon which the bequest was made to him, then it
is what I should think everybody would consider
a fraud, though I take the liberty to say that the
moral turpitude of any particular case must vary
infinitely according the circumstances of the
particular case. My Lords, the basis of it is of
course that the testator has died, leaving property
by his will in a particular manner on the face and
in reliance upon an express or implied promise
by the legatee to fulfil his wishes, and your Lordships
will at once see that it makes no difference
whatever whether the will be made before the
communication to the legatee or afterwards, because,
as was said, I think, by Turner VC in one
of the cases which were cited, the presumption
is that the testator would have revoked his will
and made another disposition if he had not relied
upon the promise, express or implied, made
by the legatee to fulfil his wishes.”
4 See, Haines D, Succession Law in South Australia
at [14.21]: “The named beneficiary must complete the
trust by conveying the gift to the secret beneficiary and can
be compelled to do so by equity.”
5 As to the meaning of “fraud”: it does not mean
that to succeed in establishing a secret trust the
plaintiff must show that the primary donee was
guilty of deliberate and conscious wrongdoing.
See Ottoway v Norman [1972] Ch 698 where
Brightman J accepted (at 711) that if the three
ingredients for a secret trust are established, it
is immaterial that the obligation on the primary
donee is an obligation to make a will in favour of
the secondary donee as distinct from some form
of inter vivos transfer, observing that there is no
materiality in the machinery by which the donor
intends that the obligation shall be carried out.
6 His Honour’s was a dissenting judgment, but
there was no disagreement with this statement
of principle.
7 Hardingham Neave and Ford, Wills and Intestacy,
(2nd ed) (1989) at 185 para 732
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