Explanation of Secret Trusts: Where they Arise and How they Operate

A trust is often used by trusts that make grants or smaller service providing organisation of whom do not have a membership.

In the matter of Sydney Project Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) and S.E.T. Services Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] NSWSC 881 (30 June 2017) (‘SPG and SET’) concerns the events involving plaintiffs Michael Hogan (H) and Christian Sprowles (S). Salim Mehajer (M) is the sole shareholder of both Sydney Project Group Pty Ltd (SPG) and S.E.T. Services Pty Ltd (SET). M appointed Kenneth Lee (L)

“Whenever a devise, conveyance, assignment, or other transfer of property, including a beneficial interest in a land trust, maintained or intended for maintenance as a homestead by both husband and wife together during coverture shall be made and the instrument of devise, conveyance, assignment, or transfer expressly declares that the devise or conveyance is made to tenants by the entirety, or if the beneficial interest in a land trust is to be held as tenants by

Proprietary estoppel, on the other hand, is a “legal bar preventing a (first) party from denying another (second) party's right in first party's property where the second party has incurred costs in that property to its detriment”. Proprietary estoppel, like other types of estoppel, is not a remedy in itself but a tool to raise “estoppel equity”, on the basis of which the court is able to decide on the type of remedy that this equity will satisfy. Similarly to the need for the element of common intention for the purpose of establishing a constructive trust, there is a need for the establishment of an active or passive assurance on the part of the defendant that leads to some form of consequential detriment on the part of the claimant when acting in reliance on that assurance. Thus, there must be a causal connection between the actions undertaken by the claimant and the initial assurance on the part of the defendant. The extent and the nature of the detriment suffered by the claimant, however, appears to be substantially more flexible than that necessary to find the existence of a constructive trust. For example, in Inwards v Baker [1965], such detriment amounted to the improvement of the defendant’s land, while in Gillett v Holt [2001] it was manifested in both financial and personal detriment. Yet unlike in most cases involving common intention constructive trusts, in neither of

A trust co-ordinates care. They make decisions about the service and they co-ordinate and decide what type of care and what services they provide, how many service users, staff and beds available etc. An example of a type of trust is a hospital trust. A hospital trust is an NHS trust that provides secondary health services. Hospital trusts are ordered to provide these services by primary care trusts and clinical commissioning groups. A hospital trust co-ordinates the health care services.

Although the grantor trust rules generally address the taxability of trust income to the grantor, in some situations the Clifford trust doctrine has been extended to tax the income of a trust to someone other than the grantor. This happens when the powers granted enable a beneficiary to vest the corpus or income in the beneficiary. The seminal case of Mallinckrodt v. Nunan held that income of a trust was taxable to a beneficiary

This case study is based on Environinvest Limited (Receivers and Managers Appointed)(in liquidation) vs Roger Neil Pescott & Ors (2012) and Environinvest Limited (Receivers and Managers Appointed) (in liquidation) vs Blackburne Pty Ltd (in liquidation) (2012).

"As stated by Lord Evershed in Re Endacott, 'no principle perhaps has greater sanction or authority behind it than a general proposition that a trust by English law, not being a charitable trust, in order to be effective must have ascertained or ascertainable beneficiaries”. However, although the certainty of object is an important principle, it appears that the question in regards to the certainty of objects is one that asks whether there is a limit on the flexibility that exists in regards to discretionary trusts—which applies the ‘class test’ as opposed to the more definitive ‘list based test’ applied to fixed trusts—it may therefore be more appropriate to ask, what degree of uncertainty will be tolerated by the courts?

A trust can only be enforceable if it is sufficiently certain. The three certainties of a trust must coincide for a trust to become valid. Absence of any of the uncertainties makes a trust invalid from the start. The three certainties are certainty of the subject matter, certainty of intention and certainty of the objects. All these certainties must be established to make a trust valid. The purpose of the certainty requirement of trusts is to ensure compliance with the intentions of the settlor. For a trust to be enforced, there must be an individual who can compel the trustee to enforce the trust. The trust should also be capable of being implemented for the benefit of a beneficiary. The certainty requirement ensures that a trust is capable of being implemented failure to which would render the concept of trusts pointless.

This essay will discuss the Supreme Court decision in FHR European Ventures LLP and others v Cedar Capital Partners LLC (Cedar) . The issue in this case was whether a bribe or secret commission accepted by an agent is held on constructive trust for his principal. This topic is a “relentless and seemingly endless debate” , as Sir Terence Etherton described, and that the “remedy awarded has vacillated for the last 200-odd years” . The major reason for the debate is because the principal will have propriety claim as opposed to a mere equitable compensation, if the bribe or commission is held on a constructive trust . The principal will be in a much more advantageous position if he was held to have propriety

When creating an express trust knight and knight articulated that there must be certainty of subject matter, certainty of intention and certainty of objects.

The following is a case study of Blackwell v Blackwell, that is connected to the principle of Secret Trusts and particularly Half Secret Trusts. In order for the principle to be understood, it is significant to expatiate on what secret trusts are and the several laws revolving around them. In general terms, a secret trust arises where a testator, A, tells B that he is leaving property to B on his death, and that he wishes B to hold it on trust for C, even though no trust for C has been set out in any formal will executed by A. If B agrees, when the property passes to B on A's death, the court will enforce the secret trust despite its informality and require B to hold the property for C. In secret trusts, two different types are recognised by the courts, one where the trustee and the terms of the trust are not mentioned in the will, this is a fully secret trust while a half secret trust is subject to a trust obligation which is apparent on the face of the Will, but the terms of the trust and the identity of the beneficiary are not disclosed. The trustee is not in position to deny the trust and can not fraudulently take the property because he is a trustee for someone. Equity will not allow him take the property beneficially. The major difference between both is the extent in which disclosure is made as to the recipient of the gift intends to take the property as a trustee rather than for himself. Secret Trusts can also arise where there is no will, it may be in a case of

McClain, P. J. A., Sheehan, B. F., & Butler, L. L. (1998). Substantive rights retained by

A harsh decision would been seen in the case of Re Fry (1946), as the donor in this case had completed necessary forms and returned them. He also applied for the necessary consent which required by the Defence Regulation (Amendments No.2) SI 1939/1620, but the consent was not given before his untimely demise. Romer J. did not upheld the trust because the donor has not done everything that is necessary for the transfer of the title. As Romer J. stated that if the donor had been asked for further details, he is not compelled to proceed with the transfer, he have the choice to refuse as he obtain more details about the transfer of share.The law had been very clear with regards to imperfect gifts or incompletely constituted trust, as some judges even decided harshly to comply with the maxim and general rule. However there are judges that came out with different rule to curb such harsh decision and strict principle, this is known as ‘the every effort rule’. The ‘every effort rule’ which was established in the case of Re Rose [1952] explained by Rimer L.J in Zeital v Kaye [2010] that “once a donor has done all in his own power to transfer the shares, he will be regarded as holding the legal title to them upon trust for the donee, who will thereupon become their beneficial owner”. This rule will not render the gift or trust failed

The general rule on constitution of trusts is ‘equity will not assist a volunteer to perfect an imperfect trust’. It is apparent that subsequent case law has sought to depart from such principle by introducing various exceptions which allow incomplete gifts to be perfected. Nevertheless, there has been many criticism and debate in regards to this area of the law since it is felt on the one hand, that the scope is for exceptions is being widened too far, whilst it is argued on the other that it will be unconscionable to the parties for the gift not to be perfected. Nonetheless, the exceptions is inevitable will continue to advance and thus create a topic for criticisms and debate.