RESPONDENT. PLAINTIFF, Trust and trustee-Deposits in Savings Bank-Deposits to credit of depositor in
trust for named person--Retention of dominion and controlPassbooks Given by depositor to named person-Named person informed by depositor- SYDNEY,
Sundry withdrawals and deposits by depositor-Passhooks obtained from and Dec. 8, 9, 17.
returned to named person-Government bonds-Discussion between depositor and named person-All moneys withdrawn from trust accounts and invested in bonds-Bonds in name of depositor-Receipt therefor handed by him to named person-Inquiry by depositor to have bonds put in name of named person- Death of depositor-Intention to create trust-Claim by named person against depositor's estate-Statute of Frauds (29 Car. 2, C. 3), S. 7.
Equity will only enforce a trust to the extent to which the intention to create a trust is clear. But this does not mean that a plaintiff who seeks to prove too wide a trust must fail altogether. The court may hold that a less extensive trust has been established than that claimed and in such a case that which has been established will be enforced.
Where a person not only opens an account but hands the passbook to the purported beneficiary and thereafter consults that beneficiary on the basis that the latter is the beneficial owner of the moneys or of some interest in them, the evidence tends strongly towards establishing that the depositor intended to create an immediate trust in favour of that other person. The fact that the depositor reserved a right to revoke the trust would not prevent an immediate trust arising and if the trust was not revoked by the depositor in his lifetime the beneficiary would be just as much entitled to the money as a beneficiary under an irrevocable trust.
The creation of trusts of bank accounts, considered. Decision of the Supreme Court of New South Wales (Roper C.J. in Eq.)
In a suit brought in the equitable jurisdiction of the Supreme Court of New South Wales by Alfreda Hilton against Bertram Kauter and Frederick Kauter, the amended statement of claim was substantially as follows:
1. The defendants are the executors of the will of the late Michael Francis Hickey.
2. On or about 17th July 1945 the deceased constituted himself trustee for the plaintiff of two sums totalling £500 and the interest thereon which sum he on that day deposited in a new Common- wealth Savings Bank trust account in the Spit Junction branch of that bank. The account was numbered 43544 and styled-" Frank Hickey-Trustee for Miss Alfreda Hilton".
3. Subsequently about 27th July 1947 the deceased constituted himself a trustee for the plaintiff of a further sum of £500 and the interest thereon which further sum he paid into the said account at the Spit Junction branch.
4. On or about 2nd October 1946 the deceased constituted himself a trustee for the plaintiff of a further sum of £500 and the interest thereon…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Kauter v Hilton
Sign in free to access the full text
Details
AGLC
Kauter v Hilton [1953] HCA 95
Case
[1953] HCA 95
Decision Date
CaseChat Overview and Summary
This case involved an appeal by the executors of the estate of Michael Francis Hickey (the appellants) against a decree of the Supreme Court of New South Wales in Equity. The respondent, Alfreda Hilton, the deceased's niece by marriage, claimed that the deceased had constituted himself a trustee for her of various sums of money deposited in Commonwealth Savings Bank trust accounts, and subsequently of Commonwealth bonds purchased with those moneys. The appellants contended that the deceased retained beneficial ownership of these assets and that they formed part of his estate.
The primary legal issue before the court was whether the deceased had effectively created a trust in favour of the respondent in respect of the moneys deposited in the various trust accounts and the subsequent investments made with those moneys. This involved determining the deceased's intention at the time of the deposits and investments, and whether he intended to create an immediate trust, subject to a reservation of a life interest, or merely intended to make a testamentary gift. The court also considered whether the Statute of Frauds had any application to the creation of these trusts of personalty.
The court reasoned that equity will enforce a trust only to the extent that the intention to create it is clear, but a plaintiff need not fail entirely if they claim too wide a trust. The court found that the deceased's actions, including opening trust accounts in his name for the respondent, handing over the passbooks, and consulting the respondent regarding the investment of the funds, strongly indicated an intention to create an immediate trust. The fact that the deceased may have reserved a right to the income during his lifetime did not prevent an immediate trust from arising, provided the capital was intended to be held for the respondent. The court distinguished this from an imperfect gift, noting that the deceased had not attempted to withdraw capital without the respondent's consent and had consulted her on investment decisions. The court dismissed the appeal, upholding the Supreme Court's declarations that the deceased was a trustee for the respondent of £3,500 of the Commonwealth bonds and the balance of £387 in the Neutral Bay trust account.