Is This the End of Secret Trusts?
Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, consider whether the recent decision in Mattingley v Bugeja means further claims in relation to Secret Trusts are unlikely to succeed
What are Secret Trusts in Will dispute and Will contest claims?
A Trust is a device under which property is held. Wills can create Trusts (commonly called “Will Trusts”) but they are almost always created by the express terms of the Will. A Secret Trust is a Trust (created following the death of the person making the Will) where the terms are simply not recorded on the face of the Will. It falls then into the same category of potentially enforceable transactions as “Proprietary Estoppel” – which is where a quasi-contract is made by means of a promise to gift someone a share or part or the whole of a property but usually with no or insufficient consideration (so no money changed hands which one could point to as a payment for the promise). The Court will step in to provide a legal framework to allow the promise to be enforced to prevent potential unfairness. For more information about this, please refer to our earlier blog as follows:
The issue with the Secret Trust though is that because it is “secret” there may be insufficient provable facts that could persuade a Court that it exists and thereby enforce it. This was certainly the situation in Mattingley v Bugeja (2021) EWHC 3353 (Ch), where the court found no such Trust existed. The actual decision can be found here:
What is needed for a Secret Trust to exist?
Here are the basic requirements as per HH Judge Davis-White QC in Mattingley (above) at paragraphs 21 and 22:
The law of secret trusts
- There was common ground as to the basic elements required to establish a secret trust. As set out in Lewin on Trusts in paragraphs 3-078: “The primary donee will be subjected to a fully secret trust for the secondary donee where the secondary donee or his personal representative proves:
(1) an intention on the part of the testator to subject the primary donee to an obligation in favour of the secondary donee;
(2) communication of that intention to the primary donee during the testator’s lifetime; and
(3) acceptance of that obligation by the primary donee, either expressly or by implication.”
- Further, a fully secret trust must comply with the three certainties applicable to express trusts, namely certainty of intention, certainty of subject matter and certainty of object. The Judge did not find the Claimant’s case in Mattingley very convincing and he spent some time analysing how he should interpret the evidence, concluding it seems, that he should pay greater attention to the paper record (recorded by professionals – the Solicitors involved in the construction and execution of the Will) rather than the Claimant’s own testimony and her other witness evidence. For example he quoted from another case, where this issue was dealt with in some detail at paragraph 26 from which an extract appears below:
(1) We believe memories to be more faithful than they are. Two common errors are to suppose
(1) that the stronger and more vivid the recollection, the more likely it is to be accurate; (2) the more confident another person is in their recollection, the more likely it is to be accurate.
(2) Memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is even true of “flash bulb” memories (a misleading term), i.e. memories of experiencing or learning of a particularly shocking or traumatic event.
(3) Events can come to be recalled as memories that did not happen at all or that happened to somebody else.
(4) The process of civil litigation itself subjects the memories of witnesses to powerful biases.
(5) Considerable interference with memory is introduced in civil litigation by the procedure of preparing for trial. Statements are often taken a long time after relevant events and drafted by a lawyer who is conscious of the significance of the issues in the case of what the witness does or does not say.
(6) The best approach from a judge is to base factual findings on inferences drawn from documentary evidence and known or probable facts. “This does not mean that oral testimony serves no useful purpose… But its value lies largely… in the opportunity that cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations, and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth”. He found conclusive proof of the Testator’s intentions from an email in the file of the Solicitors who constructed the Will said to be subject to the Secret Trust (in paragraphs 79 and 80): Kim’s response was given later the same day: “Sorry for the confusion I wish the property to be secured for my mother until the end of her life then I wish for the property to be passed to my Sister 100%.”
- This response appears to have removed any uncertainty and clearly expressed the position that Anabel was to have no legal entitlement to Kim’s beneficial interest (or any part of it) in the Property. Mr. Jackson submitted that this was just the public response to M&M and that, separately, Kim did intend to impose a trust upon Karen. I reject that submission. As a generality, it seems to me that Kim was like most lay people in not knowing about secret trusts and thus in considering that legal obligations would be imposed under the will or not at all. I accept that such a view or belief by the testator is not necessarily incompatible with a relevant binding promise (express or implied) being made by a primary done such as to trigger a secret trust in due course but in my view, in the scenario I have outlined that is likely to be unusual.
This does though leave open the question – how can Secret Trusts be proved, if the Court is only prepared to take the contemporaneous papers at face value, in Will dispute and Will contest claims? After all, isn’t the point about Secret Trusts that they ought not to be revealed as part of the process of forming the Will nor on the face of it? In view of that it is odd, the Court is not prepared to consider the recordings by the Solicitor as part of the process of constructing the Will to be unreliable as evidence for the existence or otherwise of the Secret Trust. In Mattingley it is assumed that this conundrum doesn’t exist and/or it is ignored.
If you consider any of these facts and matters are of interest, are likely to apply to you, or you would like to ask us for more information about our no win no fee arrangement, or you simply want us to assess your claim, then please do not hesitate to contact us for a confidential no strings chat.
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