This blog post has been contributed by Professor Martin Dixon, Module Convenor for Equity and Trusts.
“Durham student loses court battle with her aunt over her late mother’s £600,000 Kent home after claiming she left it to her in a ‘verbal secret trust’ rather than her will”
The above is, perhaps, a headline that means more to students of Equity and Trusts than the general readership of the Daily Mail.
Secret trusts are fascinating, combining both questions of legal principle and revealing to the world the sometimes complex lives of ordinary people. In Re Mattingley (Deceased), [2021] EWHC 3353 (Ch), Anabel alleged that her mother’s will had established a fully secret trust in Anabel’s favour in respect of her mother’s interest in a house (her mother had owned 71% of the house). The beneficiary on the face of the Will was Anabel’s aunt, who argued simply that the Will meant exactly what it said and so claimed the interest beneficially. HH Judge Davis-White QC (sitting as a High Court judge) reminded us (quoting Lewin on Trusts) that there are three key elements to establishing a fully secret trust:
- an intention on the part of the testator to subject the primary donee under the Will to an obligation in favour of the secondary donee (the secret beneficiary)
- communication of that intention to the primary donee during the testator’s lifetime; and
- acceptance of that obligation by the primary donee, either expressly or by implication.
Further, the judge reminds us of two important practical points (they are not legal rules) when assessing whether these conditions are made out on the facts:
- that it is reasonable for ordinary people (such as the beneficiary on the face of the Will) to believe that the Will means what it says and that had a different outcome have been intended, the Will-writer would have said it.
- that when there is no reason why an alleged intended gift should be secret, it can be more difficult to prove the conditions for establishing a secret trust. In other words, why would a Will-writer keep a gift secret, if there was no reason to do so?
So, in this case, on the facts, Anabel had not established that there was a fully secret trust. Does it mean that the conditions for establishing a secret trust are strict? The claim also failed in Titcombe v Ison [2021] 1 WLUK 624 in relation to some jewellery. Perhaps, or perhaps not. We should not draw a general conclusion from just two cases.
But, the real lesson for students is to understand the law first, and worry less about the actual “answer” to any particular problem. The law is key; the answer is all about the facts. When dealing with issues in secret trusts: state the law; apply the law to any facts you are given; reflect on the answer. Do not worry whether you are “right” or “wrong” in “solving” the problem.