I'm trying to write an answer to a secret trusts problem question and I'm a little stuck.
George leaves a will to Tom created in June 2005 - the provision states - "my house 12 oaks to my brother absolutely.
In October 2005 G tells T he is to hold the house on trust for someone to be disclosed at a later date.
In June 2006, G hands T an envelope instructing him to to open it until his death. He stated that it contained the details of the other person.
June 2007, G died. T opened envelope and discovered 12 oaks had been left to an illegitimate son.
Who is entitled to 12 oaks?
My main query which prevails... The will as it will be under the wills act, or the secret trust?
I'm going round in circles, any help would be appreciated
1. For the purposes of this answer, it is assumed that T is G's brother. If not, the oral declaration of trust would fail for want of evidence in writing (as a declaration of trust of land under s. 53(1)(b), LPA 1925) and for failure to be constituted (as constitution of the trust would require legal title to the house to be vested in the trustee (T), which there is no evidence of on the facts). The terms of the will would be decisive and the brother would take absolutely.
2. The rest of this question will proceed on the basis that T is G's brother.
3. This is a FST, not a HST because the terms and the existence of a trust are hidden from the face of the will.
4. Under a FST, there are three requirements as per Viscount Sumner in Blackwell v Blackwell: (1) a clear intention to oblige the trustee to hold the property in a certain manner; (2) communication to the secret trustee of the terms of his obligation; and (3) acceptance by the secret trustee of those obligations. These elements will be considered in turn.
5. In terms of the intention, the conversation with T makes it unequivocal that G intends for T to hold the property on trust for another. The use of the word 'trust' won't be conclusive (Adams v Kensington), but it will be very persuasive (Lamb v Eames). This first element is therefore satisfied.
6. In terms of communication, for a FST, the only requirement is that communication occur before the death of the testator (Re Boyes). Communication doesn't require the secret trustee to know of the exact terms of his obligation, but it does require him to have the means by which he could immediately discover his obligation (Re Keen). Lord Wright rather strangely reasons from analogy with a ship sailing under sealed orders in Re Keen itself. Whilst the help given by the analogy can be doubted, the principle that the case stands for cannot. From the point in time that T has the letter with the relevant information in it (June 2006), communication can be considered complete. This occurs before death of the testator (June 2007) and is therefore satisfied on the facts.
7. Acceptance is the easiest of the requirements to satisfy. It is sufficient that the secret trustee acquiesces with silence provided that it is a reasonable conclusion for the testator to make from that silence that it constitutes a tacit acceptance of the obligation (Moss v Cooper per Wood VC). It is submitted that T's failure to say anything on either situation when discussing his obligations with G suggests that tacit acceptance is a more than reasonable conclusion to draw from the facts. That third element is therefore satisfied on the facts.
8. Viscount Sumner's classic tripartite test is unequivocally satisfied and a fully secret trust is established. T is, prima facie, under an obligation to hold the house on trust for whomsoever is included in the envelope.
9. The final point relates to formalities. Whilst Re Cleaver suggested that a FST is the paradigmatic example of a constructive trust (and thus, falls into the exception in s. 53(2), LPA 1925 as to the requirement of evidence in writing for a trust of land), this is by no means conclusive. Furthermore, the lack of failure in light of absence of formalities in Ottaway v Norman for the FST of a bungalow isn't conclusive because at no point in that case did Brightman J even suggest that formalities were necessary/unnecessary. The point simply wasn't raised and tells us nothing. The better view, to me, seems to be that the whole purpose of a FST would be undermined if writing were required. The whole point of the secret trust is to avoid publicity of particularly sensitive dispositions; a requirement of writing would go against this theoretical foundation.
10. For those reasons, no formalities are necessary and the FST is established. T holds on trust for whomsoever's name is on the letter in the envelope.