Analysis
Kim Mattingley (Kim) died on 28 June 2020. C was Kim’s daughter. D was Kim’s administratrix and sister (ie C’s aunt). Kim left an English will dated 31 May 2016 (the 2016 will). Letters of administration with the will annexed (limited to English assets) were granted to D.
Under the 2016 will, Kim left her residuary estate to C, but in fact there was little or no residuary estate. The 2016 will provided that Kim’s interest in 8 Crabtree Close, Ings Hill, West Malling (the property) and certain effects within it be devised absolutely to D. The 2016 will expressed a wish that D permit their mother, Mrs White, to continue to live there for the rest of her life. In fact, at the time of the will, Mrs White was residing in the property pursuant to a 25-year lease granted in 1999. By a deed of trust dated 4 June 1999, Kim had declared a trust of the property for herself and D as to 71% for Kim and as to 29% for D. Kim’s interest in the property at the time of her death was therefore a beneficial interest of 71%.
C alleged that Kim and D had agreed (and D had promised) that on Kim’s death (subject to Mrs White’s right to live there for life), D would hold a 26.625% interest in the property on trust for C. The alleged promise was said to have preceded the making of the 2016 will. C alleged that the 26.625% figure was the equivalent to what would have passed to her under Swiss law had the property been situate in Switzerland. D denied that any such agreement or promise was made. D said that the only comments made to her by Kim were to the effect that she did not want her estranged husband to receive an interest in the property, that she wanted to ensure that Mrs White could live there for the rest of her life, and that if Mrs White went into care Kim wanted the property to be sold and the proceeds used to pay for the care. D accepted that, once Mrs White died, the property or its proceeds would be divided with C, but said that there was no legal obligation on her to do so.
Held (dismissing the claim):
It was common ground that the basic elements to establish a secret trust were an intention on the part of the testator to subject the primary donee to an obligation in favour of the second donee, communication of that intention to the primary donee during the testator’s lifetime, and acceptance of that obligation by the primary donee, and that in addition the trust must satisfy the requirements of certainty of intention, subject matter, and object.
Kim’s solicitors had expressly questioned whether C was to have an interest in the property and Kim had confirmed that it was to pass to D. C’s submission that this was just the ‘public response’ to the solicitors was rejected. Like most lay people, Kim did not know about secret trusts and thought that legal obligations would either be imposed by the will or not at all. Such a view is not incompatible with a binding promise such as to trigger a secret trust, but that scenario is likely to be unusual.
Letters from Kim to her solicitors referring to C’s ‘inheritance’ did not show that there was a secret trust – they might have been referring to Kim’s English and Swiss estates, and in any case it was not clear that Kim understood or even that it was clear at all that there was no residue. In any case it was consistent with an aspiration or expressed wish rather than an intention to create a binding trust. Any ambiguity was removed by a later conversation with her solicitors in which Kim was advised that C would not receive any UK assets but indicated that she trusted her sister to give the equity in the property to her. This was inconsistent with C’s case that she was to receive the amount she would have been entitled to under Swiss law, and also indicated that D’s obligations were to be moral rather than legal. There was no reason why any promise made by D would not have been disclosed by Kim to her solicitors and she made clear that she was not leaving anything specifically to C. Any trust would also be difficult (though not impossible) to reconcile with the intention of using the property for Mrs White’s benefit.
C’s evidence about a conversation with her mother had been hopelessly compromised by the process of litigation in Switzerland and England. Her written evidence ‘smacked’ of being influenced by documents and outside sources. Her oral evidence did not go so far, indicating that Kim had told her that she would receive an unspecified portion of the property and that D would look after her, and that the most that was said while D was in the room was that D would look after C in the most general of terms. At most this conversation showed that Kim wished (without imposing any obligation or extracting a promise) that D would give C something derived from the property. The lack of obligation was reflected in the vagueness of what was promised which was also inconsistent with the certainty of subject matter necessary to create a trust. The absence of one of the other certainties was relevant to the question of whether there was certainty of intention.
A later alleged conversation between C and Kim was somewhat suspect as it was only relied upon late in the day. D was not present during the conversation and in any case all that it recorded was that Kim trusted D, which did not necessarily involve the imposition of a secret trust.
D accepted that she had had a conversation with C and that she may have referred to C being ‘entitled’. However this was consistent with a moral entitlement rather than a legal one.
The court was prepared to accept C’s father’s evidence that he had a conversation with Kim and that some reassurance may have been given that C would be provided for, but the court did not accept that precise percentages were mentioned or that D had agreed to provide the relevant percentage. To tell C’s father about it would be to undermine the only realistic purpose of a secret trust – to ensure that he did not know.
There was a lack of reason for there to be a secret trust, or for Kim to hide it from her solicitors. An argument that this was to contain costs was unconvincing as the costs of will preparation was modest and Kim never asked her solicitors if further costs would be involved. There was no evidence that the will was made in reliance on any promise from D, and the court was not satisfied that any promise was made. In any case, there was no certainty of subject matter or object as it was unclear what portion of Kim’s interest in the property was to be subject to the trust or when it would vest in C (two ages being possible).
JUDGMENT HHJ DAVIS-WHITE QC: Introduction [1] This is a case about an alleged ‘secret trust’ of real property, situated in England, under a will. The question is whether the devisee under the will, the defendant, holds the deceased’s interest in the property on trust so as to give the claimant, the deceased’s daughter, a 37.5% …Continue reading "Mattingley v Bugeja [2022] WTLR 601"