Howell v Hyde

The case of Howell v Hyde involved the deceased, Mr. Howell, and his executor, Mr. Hyde, in the Supreme Court of New South Wales. The dispute arose from the interpretation of a will, specifically concerning the existence of a secret trust over shares in a company and investments in various companies. The plaintiffs, who were beneficiaries under the will, contended that Mr. Howell had intended to establish a fully secret trust over these assets, which were not explicitly mentioned in the will. The court was tasked with determining whether the requisite certainty of trust property was present and if the doctrine of fraud could be applied in this context.

The primary legal issues before the court were whether a fully secret trust had been created over the company shares and investments, and if the doctrine of fraud could be invoked to enforce the trust. The court had to assess the standard of proof required to establish the existence of such a trust, particularly in the absence of explicit mention in the will. Additionally, the court needed to determine whether the principles of equity could be applied to uphold the trust, even though it was not documented in the will.

In its decision, the court held that for a fully secret trust to be valid, the three certainties – intention, subject matter, and objects – must be established. The court found that there was no clear evidence of the requisite intention to create a secret trust over the company shares and investments. The plaintiffs had not met the burden of proof necessary to establish the existence of the trust, particularly in the absence of explicit reference in the will. The court also noted that the doctrine of fraud could not be applied in this situation as there was no evidence of wrongdoing or deception that would warrant its invocation. Consequently, the court ruled that the secret trust was not valid, and the assets in question were to be distributed according to the terms of the will.

The court made an order that the executor, Mr. Hyde, was to distribute the assets in question in accordance with the terms of Mr. Howell's will. The plaintiffs' claim for the establishment of a secret trust over the company shares and investments was dismissed, and they were not entitled to any of the assets in question. The decision underscored the necessity for clear and explicit evidence to establish the existence of a secret trust, particularly in the context of equity and the principles of certainty required by the law.