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 Key facts

s
equity &
t
trusts
c
a

3rd edition
f
y
e

Chris Turner
k
Orders: please contact Bookpoint Ltd, 130 Milton Park, Abingdon, Oxon OX14 4SB.
Telephone: (44) 01235 827720. Fax: (44) 01235 400454. Lines are open from 9.00–5.00, Monday
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British Library Cataloguing in Publication Data

A catalogue record for this title is available from The British Library.

ISBN 978 1 444 110883

First published 2003

Second Edition 2006
This Edition published 2011

Impression number 10 9 8 7 6 5 4 3 2 1
Year 2015 2014 2013 2012 2011

Copyright © 2003, 2006, 2011 Chris Turner

All rights reserved. No part of this publication may be reproduced or transmitted in any
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London NW1 3BH by CPI Cox & Wyman Ltd, Reading, RG1 8EX
 Contents

Preface iv

Chapter 1 Introduction to equity and trusts 01

Chapter 2 The creation of express private trusts 13
Chapter 3 Purpose trusts 21
Chapter 4 Constitution of trusts 29
Chapter 5 Secret trusts 35
Chapter 6 Protective and discretionary trusts 41
Chapter 7 Resulting trusts and constructive trusts 45
Chapter 8 Charitable trusts 63
Chapter 9 The nature of trusteeship 79
Chapter 10 The duties of the trustees 85
Chapter 11 The powers of trustees 99
Chapter 12 Variation of trusts 109
Chapter 13 Breach of trust and remedies 115

Index 127
 Preface

The Key Facts series is a practical and complete revision aid that can be
used by students of law courses at all levels from A Level to degree and
beyond, and in professional and vocational courses. Equity and trusts is
generally studied only at degree level or above in either postgraduate or
on some professional courses, and also on ILEX Part 2 courses.
The Key Facts series is designed to give a clear view of each subject.
This will be useful to students when tackling new topics and is invalu-
able as a revision aid. Most chapters open with an outline in diagram
form of the points covered in that chapter. The points are then developed
in a structured list form to make learning easier. Supporting cases are
given throughout by name and, for some complex areas, facts are given to
reinforce the point being made.
The Key Facts series aims to accommodate the syllabus content of most
qualifications in a subject area, using many visual learning aids.
The topics covered for equity and trusts include all of those contained in
mainstream syllabuses. Equity and trusts is often seen as a fairly dry and
dull area. In fact it is actually more relevant to most people’s lives than,
for example, criminal law, which is a very popular area of study. Anyone
who jointly owns a domestic home or who wants to leave property in a
will to underage children, or who has anything to do with charity work or
who has a private pension, for instance, would be able to identify what a
very practical and useful subject it is.
The law is stated as I believe it to be on 1 October 2010.
 1
Introduction to Equity and Trusts

History of equity Equitable maxims

l Defects in common law writ system l Equity acts in personam.
and inadequate remedies. l Equity looks to intention, not the
l Petitioning of king for fair solution as form.
‘fountain of justice’. l Delay defeats equity.
l Delegation of task to Lord Chancellor. l Equity regards that which should be
l Creation of separate Court of done as being done.
Chancery – staffed by clerics. l Equity is equality.
l Solutions based on discretion of court. l He who comes to equity must come
l Conflict in Earl of Oxford’s case – in with clean hands.
conflict, equity prevails. l Equity will not assist a volunteer.
l Merged with common law in l First in time prevails.
Judicature Acts 1873 and 1875.
l Equity will not suffer a wrong to be
l Still developing, e.g. search orders without a remedy.
and freezing injunctions.
l Equity will not allow statute to be
used as an engine of fraud.
l Equity follows the law.

Equitable remedies Definition/classification of trusts

l Injunctions – to prevent occurrences l Settlor/donor transfers real or
such as a breach of trust. personal property to trustee to use
l Specific performance – to ensure a for benefit of beneficiaries or for
contract is carried out. purposes (charity).

l Rescission – to return parties to a l Can be expressed by settlor, implied

pre-contractual position. by law or statutory.

l Rectification – to change a document l Can be private (human beneficiaries)

to reflect an actual agreement. or public, e.g. charitable purposes.
l Can be fixed (settlor’s terms) or
discretionary (decided by trustee).
 02 Introduction to Equity and Trusts

Equitable interests Context of Trusts

l Equitable redemption of a mortgage – l Pension funds.
to allow larger loans with security for l Investment – unit trusts.
lender, based on legal title.
l Security for loans.
l Lien – to hold property till a debt
l Voluntary arrangements with creditors.
paid.
l NHS trusts.
l Restrictive covenants – to retain
control over use of land sold. l Trade union funds.

l Easements – to enable legitimate use l Co-ownership.

of another person’s land. l Clubs and unincorporated associations.
l The trust itself – a means of splitting l Charities.
legal and beneficial ownership to l Non-charitable purposes.
protect beneficial owner by allowing
him to enforce terms of trust. l Protection of minors.
l Nominees in property transfers.
l Protective trusts.
l Secret trusts.
l Preserving wealth.
l Disputes over property ownership.
l Tax saving.

1.1 A brief history of equity

1.1.1 The origins of equity
1. Following the Norman Conquest, law was at first administered by the
King’s Council, the Curia Regis.
2. Later, a system of courts was developed with specific jurisdiction.
3. Henry II played a major role in developing the legal system and
created a professional judiciary, administering courts that dispensed
justice on ‘circuits’ travelling around country, and in a settled bench at
Westminster.
4. But common law was formal, slow-moving and highly technical.
5. A variety of significant defects – it was out of need to inject fairness and
justice into the legal system that equity grew. Defects included:
 A brief history of equity 03

■■ the writ system developed so that judges could reach decisions

based on established legal reasoning;
■■ but became very formalised and maxim ‘no remedy without a writ’;
■■ writ system also depended on ‘oral pleading’ – which had
deficiencies – a mistake in reciting the Latin could lose the action;
■■ with growth in number of writs to respond to new ‘original’ types of
action, law became bulky for lawyers who were bound to remember
writs for oral pleadings;
■■ because of this, Provisions of Oxford 1258 and Statute of
Westminster 1285 restricted introduction of new writs – with
consequent injustice to potential claimants without a formal claim;
■■ use of juries unpredictable as jurors (in trial by presentiment, in
effect a type of witness) could be bribed or intimidated;
■■ common law courts provided only one remedy – damages, or
money compensation – often an ineffective remedy, particularly in
the case of interference in a person’s property rights;
■■ common law preoccupied with form – e.g. parol evidence rule.
6. Equity developed to combat deficiencies – initially from disgruntled
litigants petitioning the king for fairer answer as ‘fountain of all
justice’.
7. But extent to which people petitioned him led to delegation of
responsibility to the Lord Chancellor – who was a cleric (churchman),
and considered to be ‘keeper of the king’s conscience’.
8. Extent of petitioning led to creation of separate court – Court of
Chancery, staffed by clerks of Chancellor – independent court in 1474.
9. Court not bound by writ system – based decisions on fact, not law –
and cases heard in English, not Latin.
10. New procedures introduced included:
■■ an order for disclosure of documents;
■■ a subpoena to compel attendance in court for examination.
11. Because Chancery overruled decisions of the common law courts,
conflict developed between the two.
12. That decisions were based on discretion was a source of contempt in
the common law courts – hence John Sedden’s criticism that ‘if the
measure of equity was the Chancellor’s own conscience, one might as
well make the standard measure of one foot the Chancellor’s foot’.
 04 Introduction to Equity and Trusts

13. Conflict came to a head in the Earl of Oxford’s case (1616). Ellesmere
incensed Chief Justice Coke of Common Pleas by issuing writs of
habeas corpus, and the king decided that in conflict, equity would
prevail.
14. Eventually, equity became just as formalised as common law and
subject to its own technicalities and was heavily criticised in the
nineteenth century for excessive delays. In the Judicature Acts 1873
and 1875, Court of Chancery became a division of new High Court
and equitable remedies could be awarded in any court alongside
common law remedy of damages.
15. As a result of potential conflict when administering both types of
remedies, s25 Judicature Act 1873 provided that in event of a conflict
of principles, equitable principle should prevail.
16. So equity defined as ‘that body of legal principles built up by the old
Court of Chancery, supplemental and superior to the common law’.
17. And equity has been responsible for creating a variety of interests and
remedies otherwise unavailable at common law, and is still capable of
expanding, e.g. search orders, freezing injunctions.

1.1.2 The equitable maxims

1. The basic character of equity and its key purpose was to introduce
fairness and justice into law – on which basis a system of determining
the outcome of disputes also evolved, based on reaching a fair solution.
2. These principles guiding judges in a court of equity developed and are
known as the maxims of equity – all have to do with fairness.
3. They are guiding principles and so are only followed subject to the
discretion of the court – they include:
■■ equity acts in personam:
■■ an equitable dispute is between the parties;
■■ so it will not pass onto a third party.
■■ equity looks to the intention not the form:
■■ the classic example is equitable redemption of a mortgage;
■■ the purpose of the mortgage is to secure a higher loan than would
otherwise be possible;
■■ and the mortgagee is protected by being granted beneficial rights
in the property by the mortgagor.
 A brief history of equity 05

■■ delay defeats equity:

■■ the equitable equivalent of limitation;
■■ if a person seeking an equitable solution to a legal problem fails to
bring an action in a reasonable time, he may lose remedy (Allcard
v Skinner (1887); Leaf v International Galleries (1950) (both contract
law cases)).
■■ equity regards that which should be done as being done:
■■ the remedy of specific performance is an obvious example;
■■ as is the rule in Howe v Earl of Dartmouth (1802) on the duty to act
fairly between beneficiaries.
■■ equity is equality:
■■ equity tends towards an equal division of property unless the
contrary is shown (Burrough v Philcox (1840)).
■■ he who comes to equity must come with clean hands – and – he
who seeks equity must do equity:
■■ both involve the unwillingness of equity to produce a remedy for
a party who himself behaves unconscionably;
■■ first refers to past conduct – denial of specific performance for
trying to take advantage of a mistake in a document of transfer
(Webster v Cecil (1861));
■■ second demands a basic standard for future conduct – person
seeking an injunction to prevent a breach of contract must be
prepared to perform his side of the bargain (Chappell v Times
Newspapers (1975)).
■■ equity will not assist a volunteer:
■■ where there is a covenant to settle property by trust, the trust is
only enforceable by those who have provided consideration;
■■ however, the rule has some well established exceptions.
■■ where equities are equal, the first in time prevails:
■■ whenever trying to assert any equitable right against owner of an
existing equitable right.
■■ equity will not suffer a wrong to be without a remedy:
■■ includes remedies such as specific performance and injunctions –
because damages inadequate;
■■ and the trust itself – which allows the beneficial owner to enforce
the trust against the legal owner, the trustee.
■■ equity will not allow statute to be used as an engine of fraud:
■■ commonly used where to allow a party to rely on a statutory
provision is another’s detriment, e.g. the requirement of writing
in s53 Law of Property Act 1925 (Bannister v Bannister);
 06 Introduction to Equity and Trusts

■■ also the basis of the secret trust – trust enforceable despite not
conforming to the Wills Act.
■■ equity follows the law:
■■ equity acts in personam by seeking to prevent injustice, not by
replacing or overruling common law;
■■ so restrictive covenants enforced to avoid unconscionable
behaviour by parties subject to them (and genuine interests of
legal owner of land are not interfered with);
■■ but positive covenants are not enforced because this would
interfere with the common law doctrine of privity (the person
trying to enforce the covenant not being a party to it).

1.1.3 Equitable interests (beside the trust)

1. Equitable redemption of a mortgage:
■■ equitable redemption of a mortgage allows wider land ownership;
■■ involves conveyance of equitable interests in property with
provision for redemption, i.e. upon repayment of the loan but will
usually now be a legal mortgage;
■■ mortgagor can use land purchased as collateral for loan;
■■ mortgagee holds legal interest in land so loan is protected if
mortgagor defaults on loan.
2. Lien:
■■ a device of commercial law that again splits proprietary interests;
■■ creditor of a debt can legally hold property that is subject to the debt
until the debt is paid.
3. Restrictive covenants:
■■ a way of retaining proprietary interest over land that has been sold;
■■ vendor inserts a covenant with initial purchaser, i.e. preventing use
of land for business purposes;
■■ all subsequent owners of the land are bound – and all subsequent
owners of the vendor’s land can enforce the covenant.
4. Easements:
■■ a means of securing rights over another person’s property;
■■ could be, e.g. rights of way – and are enforceable;
■■ easements can also be legal.
 A brief history of equity 07

1.1.4 Equitable remedies

1. Injunctions:
■■ an enforceable order of the court to prevent unjust behaviour, e.g.
breach of contract, breach of trust;
■■ usually prohibitory rather than mandatory because of the difficulty
of overseeing them otherwise;
■■ can be final (include all necessary relief), or interim (in advance of
trial of the issue).
2. Specific performance:
■■ enforceable order of court for contract be carried out,
e.g. transfer of land;
■■ because of difficulty of enforcing, only available where subject of
contract is unique, e.g. land; and damages would be inadequate –
compare Ryan v Mutual Tontine (Westminster Chambers) Association
(1893) with Posner v Scott-Lewis (1987).
3. Rescission:
■■ more of relevance to contracts;
■■ where a vitiating factor would make the contract voidable by
one party, rescission is a remedy putting the parties back to their
pre-contractual position if that is possible to achieve.
4. Rectification:
■■ appropriate where a written contract is inaccurate as to the actual
terms of the contract;
■■ where equitable, court will order a written document to be changed
to reflect actual agreement – outcome in Webster v Cecil (1861).
5. Account:
■■ a trustee must account for all profits made from the position as
trustee or for any losses caused to the trust;
■■ this is part of the trustee’s personal liability.
6. Tracing:
■■ tracing is a proprietary remedy;
■■ and is a basic means of recovering property belonging to the trust.

1.1.5 The scope for expansion and development

1. Lord Denning in particular thought that there was scope to use equity
to continue to add fairness and justice to the law.
 08 Introduction to Equity and Trusts

2. The ‘fair and equitable’ cases in implied co-ownership illustrate this,

with resulting and constructive trusts used interchangeably.
3. Developments of specific uses for injunctions also show expansion:
■■ search orders – originally Anton Piller orders – originated in Anton
Piller KG v Manufacturing Processes Ltd (1976) to permit entry to
defendant’s premises to search for documents that may incriminate
the defendant – so subject to strict constraints;
■■ freezing injunctions – originally Mareva injunctions – originated in
Mareva Compania Naviera SA v International Bulk Carriers SA (1975) as
means of preventing defendant from disposing of assets to defeat a
judgment – so only awarded subject to strict controls, otherwise may
force defendant out of business.

1.2 The basic character of a trust

1.2.1 The nature of the trust
1. The trust is an instrument originally devised by equity.
2. It helps to distinguish between legal and beneficial ownership of
property and also to protect beneficial interests.
3. Legal title vests in trustees while beneficial entitlement is with
beneficiaries (in certain cases, e.g. express co-ownership, these may be
the same people).
4. Trustees must carry out requirements of trust according to what is in
the trust instrument or according to law.
5. Courts will uphold wishes of settlor/testator and protect legitimate
interests of all beneficiaries.
6. Mechanism preserves the justice (equity) of the situation.

1.2.2 Definition of a trust

1. A trust is:
■■ a legal (equitable) arrangement by which:
■■ one person, called settlor/donor (inter vivos) or testator (on
death);
■■ transfers title in property (whether realty or personalty);
 The basic character of a trust 09

■■ to another person(s) called the trustee(s) (the person(s)

responsible for administering the trust).
■■ in doing this the settlor/testator, through the trust instrument, (or
the courts in certain instances):
■■ directs the trustee(s) to hold or use the property;
■■ for the benefit of certain persons (donees under an inter vivos gift
– beneficiaries in inheritance on death);
■■ or for the promotion of certain purposes (and with few exceptions
these purposes must be charitable).
2. If the trustee(s) undertake(s) to carry out directions of settlor/testator
(or of court) then they become subject to a binding legal obligation
which equity will enforce.

1.2.3 Classifications of trusts

1. Trusts can be classified in different ways according to context.
2. These include:
■■ classification according to method of creation:
■■ express trusts – created by settlor/testator;
■■ implied trusts – created usually by operation of law;
■■ statutory trusts – ‘trusts of land’ under Trusts of Land and
Appointment of Trustees Act 1996.
■■ classification according to type of beneficiary:
■■ private trusts – for individual beneficiaries or classes of
beneficiary;
■■ public trusts – usually for a purpose, i.e. charities.
■■ classification according to the character of the interest:
■■ fixed trusts – an exact sum identified by the settlor/testator or the
residuary estate;
■■ discretionary trusts – the interest and the exact distribution of the
property is identified by the trustee.

1.2.4 The context in which trusts operate

1. Trusts originated to protect the family interests of absent knights.
2. The simple mechanism of splitting legal and beneficial interests
in property has allowed trusts to expand and gain a context in the
modern world as a means of responding flexibly to most problems
thrown up by property ownership.
 10 Introduction to Equity and Trusts

3. Different uses of the trust include:

■■ pension funds:
■■ trust used to protect the fund;
■■ and for tax concessions advantage.
■■ investment – unit trusts:
■■ safer way to invest in shares;
■■ because the fund is managed by trustees.
■■ security for loans:
■■ copying traditional mechanism of mortgage in real property;
■■ trusts can be attached to loans generally to protect the loan
(Barclays Bank v Quistclose Investments Ltd (1968)).
■■ voluntary arrangements with creditors:
■■ creditors subject to the arrangement can be protected as against
other creditors, e.g. during liquidation.
■■ NHS trusts:
■■ users of services are not quite in same position as beneficiaries of
a trust;
■■ but management and administration of facilities are handled in
the same way;
■■ created by National Health Service and Community Care Act
1990.
■■ trade union funds:
■■ s2 Trade union and Labour Relations Act 1974;
■■ means funds held on trust for benefit of Union (not members).
■■ co-ownership of land:
■■ trust is the accepted method of joint ownership of property;
■■ before 1996 as a trust for sale;
■■ since the Trusts of Land and Appointment of Trustees Act
(TOLATA) 1996 as a trust of land.
■■ clubs and other unincorporated associations:
■■ only incorporation creates a separate legal personality;
■■ so if unincorporated, then trust is means of holding property for
benefit of members.
■■ charities:
■■ the most common purpose trust;
■■ but subject to various requirements.
■■ non-charitable purpose trusts:
■■ can be trusts for monuments or tombs;
■■ and specific animals.
 The basic character of a trust 11

■■ Protection of minors’ interests:

■■ Law of Property Act 1925 prevents minors from holding the legal
estate of land;
■■ originally any gift of land to a minor would create a settlement
under Settled Land Act 1925;
■■ now it would create a trust of land under TOLATA 1996.
■■ use of nominees in property transfers:
■■ common in larger purchases of shares;
■■ used to hide identity of real purchaser.
■■ protective trusts:
■■ devised to allow a financially inept beneficiary to have some
control over the property;
■■ while trustees will ensure that the trust fund does not suffer.
■■ secret trusts:
■■ can be fully secret or half secret;
■■ but in either case trust hides identity of the beneficiary.
■■ preserving wealth:
■■ trusts can be used to keep intact a body of wealth that otherwise
may be dissipated.
■■ disputes over property ownership:
■■ courts may intervene using implied trusts;
■■ to distribute ownership fairly.
■■ tax saving:
■■ placing property in trust is a common tax saving device;
■■ example is avoiding inheritance tax.
This page intentionally left blank
 2
The Creation of Express
Private Trusts

Capacity: Trusts of land:

• children – settlements are • testamentary requirements of Wills Act
voidable – cannot hold land • words used must be capable of forming trust
other than behind a trust • s53 LPA 1925 requires proof in writing
• mentally incapacitated • s2 Law of Property (Miscellaneous Provisions) Act
– protected by Court of 1989 requires actual written document incorporating
Protection under s95 Mental all of terms (Firstpast Homes v Johnson).
Health Act 1983 – and can
create trusts (Re Bearley).
The three certainties:
Trust must be expressed in such a way that the
testator’s instructions can be carried out.
CREATION Certainty of intention:
OF EXPRESS • words should express an imperative obligation
(Wright v Atkyns)
PRIVATE TRUSTS • so if words demonstrate a different obligation
no trust is created (Jones v Lock)
• precatory words, e.g. ‘hope’, ‘desire’ may be
too uncertain for trust to succeed (Re Adams
and the Kensington Vestry) – but see Comisky
Disposition of existing v Bowring-Hanbury.
Certainty of subject matter:
equitable interests: • gift must be precisely identified – so ‘remaining
• by s53(1)(c) must be in part of what is left’ would fail (Sprange v
writing or disposition void Barnard)
• problem is what amounts to a • position on shares is different (Hunter v Moss
disposition – most likely given (1994))
natural meaning (Grey v IRC) • court may use objective standard in deciding
• some actions do not count as what comes within gift (Re Golay’s).
dispositions, e.g. disclaimer Certainty of objects:
of a beneficial interest (Re • the beneficiaries should be clearly identified –
Paradise Motor Co) or if part of a class ‘list principle’ applies
• where sole owner disposes (Re Endacott)
of legal and equitable • trustees may use ‘Benjamin orders’ for
title together no written protection when distributing funds
disposition needed • in discretionary trusts ‘any given postulant’ test
(Vandervell v IRC) is used – based on conceptual and evidential
• position of specifically certainty (McPhail v Doulton)
performable contracts is • unless class is too large then uses ‘administrative
more problematic (Oughtred workability’ test (R v District Auditor ex parte
v IRC). West Yorkshire County Council).
 14 The Creation of Express Private Trusts

2.1 Capacity and the creation of trusts

1. Capacity to create a trust usually goes hand in hand with the ability to
hold or dispose of legal or equitable interests.
2. So two specific instances of parties lacking capacity to create a trust:
■■ children – minors under age 18:
■■ any settlement is voidable;
■■ children cannot hold a legal estate in land – so any land comes to
a child behind a trust.
■■ mentally incapacitated:
■■ ability to create a trust is limited by the size of the gift and
relationship with assets owned (Re Beaney (1978));
■■ Court of Protection can produce settlement for a mentally
incapacitated person by virtue of s95 Mental Health Act 1983 –
guiding principle being what would the person him/herself do if
not incapacitated (Re T.B. (1967)).

2.2 Formalities – general

1. To create a lifetime gift of land – must conform to s53 Law of Property
Act 1925 and the ‘three certainties’.
2. S53 requires written evidence for land – no requirement for personalty.
3. If gift is testamentary, additional requirements in Wills Act 1837, as
amended, must be followed – written form, signing, witnessing etc.
4. Words used must also always be capable of creating a trust.
5. All the above applies to express trusts but not resulting or constructive.

2.3 Trusts of land

1. Land inevitably requires special formalities – as it does in law of real
property.
2. In the case of trusts of land, two specific provisions are significant:
■■ by s53(1)(b) LPA 1925 ‘A declaration of trust respecting any land or
any interest therein must be manifested and proved by some
writing signed by the person who is able to declare such a trust or
by his will’;
 Dispositions of existing equitable interests 15

■■ by s2 Law of Property (Miscellaneous Provisions) Act 1989 contracts

for disposition of land ‘can only be made in writing and only by
incorporating all of the terms which the parties have expressly
agreed in one document’ – so dispositions of land, including trust,
are void if not written (Firstpost Homes v Johnson (1995)).

2.4 Dispositions of existing equitable

interests
1. By s53(1)(c) LPA 1925 ‘A disposition of an equitable interest or trust
subsisting at the time of the disposition must be in writing signed
by the person disposing of the same or by his agent thereto lawfully
authorised in writing or by will.’
2. So failure to comply means disposition is void.
3. Key question is what amounts to a ‘disposition’.
4. Most cases on meaning of disposition involve tax avoidance schemes –
so not surprising that courts take a tough line.
5. Case law suggests that the word ‘disposition’ is to be given its natural
meaning (Grey v IRC (1957)) – so oral instructions will count as a failed
disposition for lack of written form.
6. However, where a sole owner disposes of both legal and equitable
title simultaneously there may be no need for a written disposition of
the equitable interest as long as the formalities for the legal estate are
complied with (Vandervell v IRC (1967)).
7. An assignment of an equitable interest is straightforwardly a
disposition and will be void unless in writing.
8. However, certain actions appear not to be dispositions, e.g.:
■■ a disclaimer of a beneficial interest (Re Paradise Motor Co (1968));
■■ nominations under a staff pension scheme (Re Danish Bacon Co Staff
Pension Fund Trusts (1971));
■■ a declaration by a beneficiary that he holds his beneficial interest for
someone else.
9. The much more difficult question concerns the position of specifically
enforceable contracts for sale – here the main emphasis may be
on preventing tax avoidance rather than following technicalities
absolutely (Oughtred v IRC (1960)).
 16 The Creation of Express Private Trusts

2.5 Formality and fraud

1. One further key issue is whether or not a trust can be set aside to avoid
sanctioning fraud.
2. Two equitable maxims may apply:
■■ equity looks to the intention and not the form;
■■ equity will not allow statute to be used as a cloak of fraud.
3. It has been held possible to set aside operation of s53(1)(b) in order to
avoid obvious fraud (Rochefoucauld v Boustead (1897)).
4. A further example of equity acting to prevent a fraud is the secret trust.

2.6 The three certainties

2.6.1 Introduction
1. For a trust to be formed, settlor must make intentions absolutely clear.
2. So the trust must be sufficiently clear for trustee to carry out all
instructions and for court to be able to enforce it against trustee.
3. So, besides statutory formalities, creation of an express private trust
depends on the presence of the ‘three certainties’ test laid down by
Lord Langdale in Knight v Knight (1840):
■■ certainty of intention – the words creating a binding obligation;
■■ certainty of subject matter – the property subject to the trust;
■■ certainty of objects – the beneficiaries.
4. But certainty has entirely different meaning in relation to purpose trusts.
5. In all cases there is interrelationship between the three and certainty is
a question of construction for the courts.

2.6.2 Certainty of intention

1. The most significant point is that the ‘words must be imperative’ Lord
Eldon in (Wright v Atkyns (1823)).
2. The words must make clear that trustee is under a binding obligation.
3. The best words are clearly ‘to hold upon trust for’ – but the word ‘trust’
is not vital – Megarry J in Re Kayford (1975), and it may not even be
necessary to use the word ‘trustee’ (Staden v Jones (2008)).
 The three certainties 17

4. Only sufficient intention to create a trust must be shown (Paul v

Constance (1977)).
5. If the words demonstrate a different intention then there is no trust
created (Jones v Lock (1865)).
6. A further difficulty concerns use of ‘precatory’ words, e.g. ‘hope’,
‘desire’.
7. Traditionally, it was accepted that these could still create a trust – but a
turning point came in Lambe v Eames (1871).
8. And they are generally now taken to be too uncertain to create a trust
(Re Adams and the Kensington Vestry (1884)).
9. But context is all important and it is still possible to construe a trust
from precatory words if sufficient intention can be found (Comiskey v
Bowring-Hanbury (1905)).
10. Specific words accepted in the past as creating or not creating a trust
can act as precedents (Re Steele’s Will Trusts (1948)).
11. But courts only accept trust intended to be acted upon – and reject a
sham covering an ulterior purpose (Midland Bank plc v Wyatt (1995)).
12. A court will accept evidence of conduct as sufficient to show an
intention to create a trust (Re Farepak Foods and Gifts Ltd (2008)).

2.6.3 Certainty of subject matter

1. Almost anything can form the subject matter of a trust – but the
property settled must be identified precisely.
2. So many examples of choice of words that failed to create a trust:
■■ ‘the bulk of my estate’ (Palmer v Simmonds (1854));
■■ ‘such parts of my estate as she shall not have sold’ (Re Jones (1898));
■■ ‘the remaining part of what is left’ (Sprange v Barnard (1789)).
3. In the case of chattels if the specific property is not identified then, as is
the case with commercial law where property will not pass, neither will
a trust be created (Re Goldcorp Exchange Ltd (1994)).
4. Although quite different problems are created where the property is
shares (Hunter v Moss (1994)).
5. So the position is different (Re London Wine Co (Shippers) (1986)).
 18 The Creation of Express Private Trusts The three certainties

6. Absence of certainty of subject matter can have two possible results:

■■ the gift goes absolutely to the first donee;
■■ the gift fails and falls on resulting trust back to the settlor’s estate
(Sprange v Barnard (1789)).
7. One further problem, besides identifying what property comes within
the trust, is how it is distributed between beneficiaries – in which the
court might use an objective standard (Re Golay’s Will Trusts (1965)).
8. But if division of property left to discretion of specific individual who
can no longer exercise discretion then gift fails (Boyce v Boyce (1849)).

2.6.4 Certainty of objects

1. In fixed trusts (i.e. where obligation is to named beneficiaries or to all
members of a named class), trustees must know the precise identities of
the objects – known as the ‘list principle’ (Re Endacott (1959)):
■■ in fixed trusts the restrictive principle still applies so where a class
of beneficiaries is named in an inconclusive way the gift fails and
property returns to the settlor under a resulting trust (OT Computers
Ltd v First National Tricity Finance Ltd (2003)).
2. The general rule is that the description of the beneficiaries should be
neither conceptually nor evidentially uncertain – otherwise gift
will fail.
3. To avoid unfairness when the class is certain but individual members
cannot be found the courts have developed the ‘Benjamin order’ from
Re Benjamin (1902) – this authorises distribution to known beneficiaries
and missing beneficiaries then claim against existing beneficiaries
rather than against the trustees.
4. The rule on certainty of objects should be no wider than necessary to
allow the trustees to undertake their duties properly.
5. Traditionally, with discretionary trusts, same rule applied –
beneficiaries must all be identifiable (IRC v Broadway Cottage Trust
(1955)).
6. In McPhail v Doulton (1971) the position was examined in detail since
with the size of the apparent class of beneficiaries equal distribution
would have been completely impracticable:
■■ the court adopted the ‘any given postulant test’ derived from rules
on powers in Re Gulbenkian (1968): ‘power is valid if it can be said
with certainty whether any given individual is or is not a member
 The three certainties 19

of the class and does not fail simply because it is impossible to

ascertain every member of the class’.
■■ in analysing test CA (in Re Baden’s Deed Trusts (No 2) (1972))
distinguished between conceptual and evidential certainty:
■■ ‘conceptual’ means precise definition of class settlor wishes to
benefit – without which gift fails;
■■ ‘evidential’ means extent to which evidentially a person can be
included in the class – complete certainty virtually impossible.
■■ court accepted that some people would definitely come within class
and some would definitely fall outside it – in the case of others they
would fall outside class unless they could prove they were within it;
■■ it is of course possible for a class to be so wide that it could not be
upheld even though both conceptual and evidential certainty tests
from McPhail v Doulton possible – then court suggested a further test
of ‘administrative workability’ – since applied in R v District Auditor
ex parte West Yorkshire County Council (1998).

Is the gift land or personalty?

LAND PERSONALTY

Is s53 LPA 25 complied GIFT IS

NO
with? – Gift is in writing INVALID

YES

Does gift comply with the ‘three certainties’?

• Intention is clear from words (certainty of intention).
• The gift is plainly stated or is residue (certainty of subject).
• The identity of beneficiaries are known – and if a class the class is not too wide
(certainty of objects).

YES

VALID EXPRESS PRIVATE TRUST IS FORMED

Diagram illustrating the major requirements for valid formation of express private trusts
This page intentionally left blank
 3
Purpose Trusts

Objections to Accepted non-charitable purpose

purpose treats: trusts:
• lack of certainty (Morice v Upkeep of tombs and monuments:
Bishop of Durham) • e.g. for a family enclosure (Pirbright v Salway)
• lack of ascertainable • if involves moderate expenditure
beneficiaries – so needs (McCaig);certain (Re Endacott); and satisfies
residuary beneficiary perpetuity rule (Re Hooper).
• offends perpetuity – so only Maintenance of specific animals:
valid if expressed to fall • will fail test for charitable purpose (Pettingall v
inside period Pettingall)
• policy reasons, e.g. should • valid if perpetuity rule met (Re Dean).
not involve capricious
Saying of masses:
expenditure (McCaig’s
• private masses fail charity tests
Trustees).
• but upheld here (Bourne v Keane).

PURPOSE
TRUSTS

The rules on unincorporated associations:

• two or more people joined for ‘common purposes … each having mutual duties …
in an organisation [with] rules which identify in whom control of it and its funds’
(Conservative and Unionist Central Office v Burrell)
• question of what happens to gifts to such associations decided in Neville Estates v
Madden – gift is to existing members … subject to their respective contractual rights
and liabilities towards one another
• but gift fails if rules offend perpetuity period or rules prevent members from ending
association and dividing fund (Re Lipinski’s Will Trusts)
• so each member has contractual obligations to prevent misapplication of gift – and
committee members are also bound by rules which may be enforced against them
• alternative is that gift is purely for members but difficulty is that members must be
ascertainable (Re Denley’s Trust Deed)
• distribution originally based on resulting trust (Re Printers’ and Transferrers’
Amalgamated Trades Protection Society) but now on contract basis above (Re The
Sick and Funeral Society of St John’s Sunday School Golcan).
 22 Purpose Trusts

3.1 Non-charitable purpose trusts

3.1.1 General
1. A private trust is a trust in favour of ascertainable beneficiaries.
2. A charitable trust, on the other hand, is a trust for purposes which
according to established tests is accepted as charitable and thus exempt
from certain requirements of express private trusts.
3. Non-charitable purpose trusts fall outside of either category above.
4. They do not get the benefits accorded to charitable trusts – but in
certain cases may be upheld as valid.
5. One logic of accepting such categories of trusts is that, while they are
expressed as being for purposes, they can still possibly be construed as
being for the benefit of individuals affected by the purpose (Re Denley’s
Trust Deed (1969)).
6. But, the same logic cannot be applied where the class of beneficiaries is
too wide and therefore makes the trust ‘administratively unworkable’
(R v District Auditor ex parte West Yorkshire Metropolitan County Council
(1986)).

3.1.2 The objections to having purpose trusts

1. Traditionally there was no absolute prohibition on the creation of
non-charitable purposes – but a rule was developed in Re Endacott
(1960).
2. Traditionally such trusts failed because of defects in their creation, e.g.:
■■ lack of certainty;
■■ lack of an ascertainable beneficiary;
■■ offending the perpetuity period;
■■ excess delegation of testamentary powers.
3. Certainty:
■■ all trusts need certainty – and a non-charitable purpose trust is no
exception;
■■ so the purpose must be ‘stated in phrases which embody definite
concepts and the means by which the trustees are to try to attain
them must also be prescribed with a sufficient degree of certainty’
(Roxburgh J in Re Astor (1952));
 Non-charitable purpose trusts 23

■■ the trust is only valid if expressed with sufficient certainty for court
to control performance (Morice v Bishop of Durham (1804)). So a trust
will fail for lack of ascertainable beneficiaries.
4. Ascertainable beneficiaries:
■■ many purpose trusts may indirectly benefit individuals – but unless
these rank as ascertainable beneficiaries then the trust fails – as
Grant MR identifies in Morice;
■■ it follows that there can be no obligation on the trustees without a
corresponding right enjoyed by an identifiable beneficiary;
■■ in the case of private trusts these are named beneficiaries – and in
charitable trusts the Attorney-General.
5. The perpetuity rule:
■■ the rule has two aspects: (i) no gift should fall outside the perpetuity
period; (ii) no gift should last for longer than the perpetuity period;
■■ the point of the rule at common law was originally to avoid tying
up land for excessive periods and the uncertainty such gifts could
create;
■■ the original perpetuity period at common law was – the life in being
plus 21 years (the life in being was some person alive at the time of
the gift – and the gift would fail if it could vest outside of the 21-year
period, e.g. ‘To the first child of A to reach the age of 25’);
■■ so non-charitable purpose trusts failed if could fall outside period;
■■ common law rule is modified by Perpetuities and Accumulations
Act 1964 – this Act allows the settlor to specify a period of no more
than 80 years, and introduces the principle of ‘wait and see’ (i.e. wait
to see if gift vests outside of period before invalidating it).
6. Policy:
■■ the courts may invalidate a gift which they feel is capricious or an
inappropriate way of spending the money (McCaig’s Trustees v The
Kirk Session of the United Free Church of Lismore (1915));
■■ delegation of testamentary power has also been challenged in Leahy
v A-G for New South Wales but accepted in Re Beatty’s Will Trusts
(1990).

3.1.3 Exceptions to the rule against non-charitable

purpose trusts
1. Despite valid objections to purpose trusts some exceptions exist.
 24 Purpose Trusts

2. They are generally referred to as ‘trusts of imperfect obligation’ – are

anomalous, and fall into a limited range of specific exceptions.
3. Trusts for tombs and monuments:
■■ it is valid to provide a gift for creation and upkeep of a family
enclosure (Pirbright v Salway (1896));
■■ a gift may also succeed in respect of monuments to persons other
than the testator (Mussett v Bingle (1876));
■■ but the courts will only usually accept the use of quite moderate
sums of money for such gifts (McCaig);
■■ as usual, a gift fails for any lack of certainty (Re Endacott (1960));
■■ and in any case a gift is only valid if falling inside the perpetuity
period (Re Hooper (1932)).
4. Trusts for the maintenance of specific animals:
■■ a trust for animals generally can succeed as charitable if certain
conditions are met;
■■ a trust for an individual animal must necessarily fail as a charitable
gift – but might still be upheld as a non-charitable purpose trust
(Pettingall v Pettingall (1842));
■■ but not if such a gift offends perpetuity (Re Dean (1889));
■■ the perpetuity period must refer to human lives (Re Kelly (1932)).
5. Trusts for the saying of masses:
■■ a mass said in public place will generally be upheld as charitable (Re
Hetherington (1989));
■■ but a gift for purely private religious ceremonies cannot be classed
as charitable (Re Le Cren Clarke (1996));
■■ but this does not always matter since trusts for the saying of purely
private masses have been upheld as valid purpose trusts (Bourne v
Keane (1919)).

3.1.4 The modern position

1. In Re Astor’s Settlement Trusts (1952) it was suggested that all the
exceptions are merely ‘concessions to human weakness or sentiment’.
2. In Re Endacott (1960) it was also noted that they are ‘troublesome,
anomalous and aberrant’.
3. It is thus unlikely that they will be extended in any way.
4. However, the development of the discretionary trust in McPhail v
Doulton (1971) has been said to have ‘broken the stranglehold imposed
on the development of trusts’.
 The rules on unincorporated associations 25

3.2 The rules on unincorporated

associations
3.2.1 The nature of unincorporated associations
1. An unincorporated association is a joining together of two or more
people for ‘common purposes by mutual undertakings, each having
mutual duties and obligations in an organisation which has rules
which identify in whom control of it and its funds rests and on what
terms and which may be joined or left at will’ (Conservative and Unionist
Central Office v Burrell (1982)).
2. Such associations lack the formal creation of incorporation so have no
separate legal personality so cannot hold property in their own right or
be the subject of rights and obligations in their own names.
3. The common classes of such groups include – sports and social clubs,
cultural groups and certain charitable bodies.
4. Such groups can still be the beneficiaries of gifts and also are required
to handle funds – so a number of significant problems arise:
■■ what happens to gifts made to these associations?
■■ how do these associations hold funds or property?
■■ what happens to funds on dissolution of the association?

3.2.2 Gifts made to unincorporated associations

1. If an association is charitable and a gift is for the association’s purposes
then it is taken as prima facie for charitable purposes – the usual rules
on certainty do not apply and even when the association ceases to exist
the gift can be saved by the cy-près doctrine.
2. If the association is not charitable then the gift is void as a purpose
trust unless falling under the very limited exceptions.
3. If a gift cannot take effect as a gift on trust for the purposes of the
association then the question arises how such gifts can take effect and
whether or not they can take effect as gifts to the members.
4. Originally it was thought that there was no need to identify who would
be the beneficiaries – as long as persons holding the gift as trustees had
the power to spend any money (Re Drummond (1914)).
 26 Purpose Trusts

5. The different possible outcomes were considered in Neville Estates v

Madden (1961) where Cross J identified three possible categories:
■■ ‘a gift to the members … at the relevant date … so that any … can
sever his share and claim it’ (a gift to present members);
■■ ‘a gift to the existing members … subject to their respective
contractual rights and liabilities towards one another’ (a gift to
members subject to the constitutional rules of the association as to
members’ rights and liabilities);
■■ ‘a gift … at the disposal of the members for the time being … held in
trust’ (a gift on trust for members).
6. Where the trust instrument only states that the gift is to the association
then prima facie it may be construed as a gift for the members (Leahy v
A-G for New South Wales (1959)).
7. It is easier to see the first of Cross J’s three categories as acceptable if
the gift identifies clearly a limited class of persons who may benefit
from it (Re Denley’s Trust Deed (1969)).
8. The third of Cross J’s three categories throws up a number of other
points of note:
■■ that the trust mechanism is inappropriate if it is clear that the
members are not intended to benefit from the gift;
■■ that the gift, unless charitable, will fail unless limited by the
perpetuity period;
■■ also that gift cannot be to members if rules of association actually
prescribe against that eventuality (Re Grant’s Will Trusts (1980)).
9. The most plausible of the three alternatives is the second, that gift
takes effect as a gift to the members of the association subject to their
contractual rights and liabilities to one another – and it is this solution
that causes the least problems (Re Recher’s Will Trusts (1971)).
10. On this basis, the question as to whether or not the gift is subject to
any restrictions on its use depends on intentions of association as to
the relationship of its members rather than on explicit intention of
settlor. The gift will fail if rules of association offend perpetuity period
or if members are prevented by rules from ending association and
dividing the funds amongst themselves (Re Lipinski’s Will
Trusts (1976)).
 The rules on unincorporated associations 27

3.2.3 Funds held by unincorporated associations

1. The problems are exactly the same as those identified above.
2. Again, the ‘contractual solution’ is the best.
3. Each member, therefore, has contractual obligations to prevent the
misapplication of the gift – and committee members are also bound by
the rules of the association which may be enforced against them.
4. The alternative based on trust poses the obvious problem that a trust
cannot generally be held for purposes unless charitable.
5. The alternative that the gift is purely for the members again has the
difficulty that the members must be ascertainable, as in Re Denley’s.
6. Other problems, of course, still exist – e.g. if the gift is one of land
rather than chattels.

3.2.4 Distribution of the fund

1. A final problem is what happens to the fund if the association is
wound up.
2. Many of the used solutions appear at odds with the reasoning above.
3. The general rule traditionally was that funds were held on resulting
trust for members according to their contribution (Re Printers’ and
Transferrers’ Amalgamated Trades Protection Society (1899)).
4. More modern approach is to follow contract argument – the logic
of using resulting trusts is at odds with the argument that gift is an
outright gift to members subject to the rules of the association (Re The
Sick and Funeral Society of St John’s Sunday School Golcan (1972)).
5. So where there are surplus funds, the court can imply a term that these
can be divided amongst the existing members on a per capita basis
(Hunt v McLaren (2006)).
6. And funds can be passed to a sole surviving member of the association
(Hanchette-Stamford v A.G. (2009)).
This page intentionally left blank
 4
Constitution of Trusts

Formalities: Declaration of self as

• Trust complete if settlor is also trustee – but trustee:
if other trustees then incomplete till property
• Must be evidence of
passed to them.
intention to create trust.
• Transfer and formalities must be by
• For land would need
prescribed method.
written evidence.
• Chattels = delivery (Thomas v Times Books).
• Otherwise no particular
• Cheques = endorsement (Jones v Lock).
words needed (Jones v
• Land by conveyance.
Lock).
• Copyright = written transfer.
• May show intention to hold
• Shares = share transfer form and registration
for benefit of third party
(Milroy v Lord – but see also Re Rose).
(Paul v Constance).

CONSTITUTION OF TRUSTS
Enforcement of trusts: Exceptions to the rule
Enforcement of trusts: that equity will not assist
• Gratutious statement of intention a volunteer:
not binding.
• If more formal – then depends on The rule in Strong v Bird:
whether volunteer or non-volunteer. • Incomplete gift made during
• Equity will not assist a volunteer, settlor’s lifetime and donee made
i.e. one not giving valuable executor then gift complete –
consideration. beneficiaries have no claim.
• Includes person covered by Donatio mortis causa (deathbed gift):
marriage settlement (Pullan v Koe). • Must be made in contemplation of
• If beneficiary is party to covenant death (Wilkes v Allington); and
in a deed then common law action • Subject matter passed to donee
for damages possible (Cannon v (Sen v Headley); and
Hartley). • Gift made in circumstances that
• Or Contracts (Rights of Third show it will revert to donor if he
Parties) Act 1999 possible. recovers.
• Generally felt that trustees cannot
enforce covenant on behalf of Proprietary estoppel:
volunteers (Re Kay’s Settlement). • A person led to act in reliance on
• If trustee seeks damages instead promise made by other person
of specific performance then may – then person making promise
succeed (Re Cavendish-Browne). cannot go back on it.
• And also argued that promise may • So sometimes creates a proprietary
create trust (Fletcher v Fletcher). interest in favour of a volunteer
(Crabb v Arun UDC).
 30 Constitution of Trusts

4.1 General
1. If the settlor creates a trust by declaring himself as trustee then:
■■ trust is complete and beneficiaries may acquire rights in property;
■■ providing both formalities and certainty is satisfied;
■■ because property will already be vested in the trustees.
2. But if settlor intends to create trust by transferring property to other
trustees then:
■■ the trust is incomplete until he does so;
■■ and the trust is unenforceable by beneficiaries until he does so.

4.2 Formalities
1. Turner LJ in Milroy v Lord (1862): ‘to render a voluntary settlement
effectual the settlor must have done everything which, according to the
nature of the property comprised in the settlement, was necessary in
order to transfer the property and render the settlement binding’.
2. Formalities and transfer must be according to prescribed method.
3. With chattels delivery is sufficient (Thomas v Times Books (1966)).
4. With cheques, endorsement is needed (Jones v Lock (1865)).
5. Deed of gift is the surest way.
6. Land needs conveyance in form of a deed (LPA 1925 and LP(MP)A
1989).
7. Copyright needs transfer in writing.
8. Shares need completion of share transfer forms and registration (Milroy
v Lord (1862)):
■■ though a contradictory position was taken in Re Rose (1952) because
the transferor had done everything in his power to transfer the
shares;
■■ followed in trust context in Hunter v Moss (1999);
■■ and a broader approach may be taken where it is unconscionable
for the donor to deny that a transfer occurred (Pennington v Waine
(2002)).
 Enforcement of trusts – volunteers and non-volunteers 31

4.3 Declaration of self as trustee

1. While settlor must transfer property to trustees by appropriate method
– there must also be evident an intention to create a trust.
2. This need only be a clear intention (but for land would require writing).
3. Specific words declaring the trust are unnecessary if intention that one
party holds as trustee for another’s benefit is shown (Jones v Lock).
4. In contrast to above is situation where owner has not transferred
property to third party but has shown that he intends to hold for
benefit of the third party (Paul v Constance (1977)).
5. Where the settlor expressly states an intention to transfer property to
third party trustees but before transfer complete he declares himself
as trustee, the trust is only completed if the property is transferred to
them during his lifetime (Re Railli’s Will Trust (1964)).
6. But if settlor appoints multiple trustees including himself and then fails
to transfer property gift need not fail (Choithram International v Pagarni
(2001)).

4.4 Enforcement of trusts – volunteers and

non-volunteers
1. If a settlor merely makes a gratuitous oral statement of intention to
create a trust then this is not binding.
2. If, however, settlor’s intention is demonstrated by more formal means,
e.g. written covenant to transfer property, then enforceability may
depend on whether intended beneficiary is volunteer or non-volunteer.
3. Equity will generally not assist a volunteer.
4. A volunteer in this context is one not providing valuable consideration.
5. But in equity this can include a person covered by a marriage
settlement (Pullan v Koe (1913)).
6. A marriage settlement includes spouses, children (who are said to be
coated with consideration) and sometimes also, e.g. step children – if
there is a sufficiently close relationship – but it will not cover next of
kin generally (Re Plumptree’s Marriage Settlement (1910)).
 32 Constitution of Trusts

7. Since enforcement depends on specific performance of the covenant –

then the property must also be of a type to which specific performance
can apply (Pullan v Koe).
8. But if one of intended beneficiaries is a party to covenant in a deed then
whether that person is a volunteer or not, common law may provide
an action for damages for breach of covenant even though specific
performance is unavailable (Cannon v Hartley (1949)).
9. Now Contracts (Rights of Third Parties) Act 1999 available sometimes.
10. But for enforcement of covenants made before Act another issue is
whether trustees can enforce covenant on behalf of volunteers – courts
have been unwilling to accept this possibility (Re Pryce (1917)).
11. But have suggested that trustees cannot pursue such a course of action
(Re Kay’s Settlement (1939)).
12. And trustees ‘could not and should not seek to enforce covenants on
behalf of volunteers’ (Re Cooke’s Settlement Trusts (1964)).
13. But if a trustee seeks damages instead of enforcement then they may
succeed (Re Cavendish-Browne’s Settlement Trusts (1916)).
14. A final way of trustee assisting volunteer in unique circumstances is to
argue that, once a promise has been made to settle property that this
itself is subject of an enforceable trust (Fletcher v Fletcher (1844)).

4.5 Exceptions to the rule that equity will

not assist a volunteer
1. The rule in Strong v Bird (1874):
■■ if incomplete gift made during donor’s lifetime and donee then
made executor to donor’s will, gift is completed and beneficiaries
have no claim on property;
■■ but vagueness of intention defeats the rule (Re Gonin (1979)).
2. Donatio mortis causa (gift made in contemplation of death):
■■ In Cain v Moon (1896) Lord Russell CJ set basic requirements:
(i) the gift must have been made in contemplation of death
(Wilkes v Allington (1931));
(ii) subject matter must have been passed to donee e.g. freehold
land (Sen v Headley (1991)); chattels – delivery (Woodward v
 Exceptions to the rule that equity will not assist a volunteer 33

Woodward (1992)); choses in action – necessary documents (Birch

v Treasury Solicitor (1951));
(iii) the gift must be made in such circumstances that show that the
property will revert to the donor should he recover.
3. Proprietary estoppel:
■■ if one person has been led to act on statement of another, he may in
some circumstances prevent other from going back on promise;
■■ but sometimes doctrine has effect of creating a proprietary interest
in favour of a volunteer – see Dillwyn v Llewellyn (1862) and Crabb v
Arun UDC (1976).
This page intentionally left blank
 5
Secret Trusts

General:
• Idea is to create trust without revealing Fully secret trusts:
identity of beneficiaries – because of • Ostensible beneficiary must be
moral obligations. told of trust and agree to be
• Courts accept them if: (i) intention bound before testator’s death –
to create trust and three certainties or ostensible beneficiary takes
satisfied; (ii) trust communicated absolutely (Wallgrave v Tebbs).
to legatee; (iii) trust accepted by legatee. • Acquiescence is sufficient for
• Fully secret = apparent gift to ostensible acceptance (Moss v Cooper).
beneficiary. • They cannot be changed so are
• Half secret apparent on face of will. clearly inconsistent with the Wills
Act (Ottway v Norman).
• Reason they are enforced is to
prevent fraud on the beneficiary.

SECRET TRUSTS

Theoretical basis of secret trusts: Half secret trusts:

• Traditionally not enforced
• Both secret and half secret fail to comply with
– because fraud on
Wills Act requirements.
beneficiary not possible.
• So testator is ‘opting out’.
• But were accepted in
• Fraud argument cannot apply to half secret.
Blackwell v Blackwell.
• So ‘independent trust’ theory has been
• But to be valid must be
applied to both (Re Snowdon).
communicated before
• But has caused anomalies (Re Gardner and
making of will – not before
Ottoway v Norman).
death of testator as in fully
• And uncertain whether they are express or
secret (Re Keen).
constructive.
 36 Secret Trusts

5.1 The background to secret trusts

1. A will is a public document – so can be read by anyone.

2. This can cause problems for testators who wish to keep the identity of
certain beneficiaries secret, e.g. because of moral obligations to them.
3. One traditional answer was to make an absolute gift to an ‘ostensible
beneficiary’ who was instructed as to the real purpose of the gift
(the fully secret trust) – and equity would prevent the ostensible
beneficiary’s unjust enrichment and enforce the trust.
4. A further way is to identify that person as a trustee in the will but still
not reveal the identity of the secret beneficiary, i.e. ‘to X for purposes
which I have made known to him’ (the half secret trust) – the gift
being immediately enforceable after the testator’s death as there is no
question of the trustee taking it.
5. Secret trusts are potentially problematic because their exact nature
is unclear and because they do not meet the requirements of certain
formalities – s9 Will Act 1837.
6. But courts do still approve of secret trusts if there is ‘(i) an intention by
the testator to create a trust, satisfying the traditional requirements of
the three certainties; (ii) communication of the trust to the legatees; (iii)
acceptance of the trust by the legatees … which … can take the form of
silent acquiescence …’ (Nourse LJ in Margulies v Margulies (2000)).

5.2 The rules governing fully secret trusts

1. The ostensible beneficiary must be informed of the trust and agree
to be bound by it before the testator’s death – so the trust must be
communicated or the ostensible beneficiary will take absolutely
(Wallgrave v Tebbs (1855)).
2. The ostensible beneficiary must be told of the terms of the trust as well
as of the existence of the trust (Re Boyes (1884)).
3. The trust can be communicated orally or in writing, and could be in
sealed instructions to be opened after death (Re Keen (1937)).
4. Acceptance of the trust does not have to be formal – silence or
acquiescence is sufficient (Moss v Cooper (1861)).
 The rules governing half secret trusts 37

5. The ostensible beneficiary must be informed of changes or additions

to the trust or (s)he will take them absolutely. Communication
and acceptance reached in an earlier will is not to be taken as
communication and acceptance for a secret trust in a later will (Re Colin
Cooper (1939)).
6. It has also proved possible for a testator to use a secret trust to create an
obligation on the ostensible beneficiary to make provision on the death
of the secret trustee for the secret beneficiary (Re Gardner (No 1) (1920)).
7. Creating clear inconsistencies with normal rules on wills, i.e. a secret
trust cannot be altered where a will can (Ottaway v Norman (1972)).
8. The original justification for secret trusts was preventing any fraud by
the ostensible beneficiary – in which case the standard of proof should
be high as for fraud (Ottaway v Norman) – but Megarry V-C suggested
that either oral or written proof is sufficient and that the standard of
proof is only the normal civil measure (Re Snowden (1979)).

5.3 The rules governing half secret trusts

1. Courts traditionally had greater difficulty in accepting half secret trusts.
2. The rationale for fully secret trusts – prevention of fraud by the
ostensible beneficiary – clearly cannot apply since a trust is created
on the face of the will and there would never be any question of the
trustee taking the property absolutely.
3. Traditionally, then, it was argued that there was no reason not to
demand compliance with the requirements of the Wills Act 1837 – so
half secret trusts were commonly not enforced and returned instead on
resulting trust to the testators’ estate.
4. But half secret trusts were eventually accepted as valid in Blackwell v
Blackwell (1929) where Lord Sumner stated that ‘it is communication of
the purpose to the legatee coupled with acquiescence or promise on his
part that removes the matter from the provisions of the Wills Act and
brings it within the law of trusts’.
5. However, as Lord Sumner also identified obiter: ‘… a testator cannot
reserve to himself a power to make future unwitnessed dispositions
by merely naming a trust and leaving the purposes of the trust to be
supplied afterwards’.
 38 Secret Trusts

6. So there is clear inconsistency in the relative positions on

communication in fully secret trusts and half secret trusts – the former
communication need only be before the testator’s death – but with the
latter it must be at or before the making of the will (Re Keen (1937)).

5.4 The theoretical basis of secret trusts

1. While there are good reasons why testators use secret trusts and why
courts will enforce them they are still problematic.
2. Both fully secret and half secret trusts fail to comply with necessary
formalities in the Wills Act.
3. The traditional justification for allowing secret trusts to disregard
statutory requirements is the equitable maxim – equity will not allow
statute to be used as an engine of fraud.
4. This fraud theory obviously applies in the case of fully secret trusts
but cannot apply to half secret trusts where a trust is apparent on the
face of the will and there is no possibility of the trustee keeping the
property.
5. Also the view of Lord Sumner in Blackwell v Blackwell that secret
trusts are based on ‘intention, communication, and acquiescence’
is insufficient justification on its own because this has the effect of
allowing a testator to ‘contract out’ of the provisions of the Wills Act –
to choose to avoid statutory provision.
6. The more modern view is that both fully secret and half secret trusts
operate outside of the will so have no need to comply with the
provisions of the Wills Act – as Megarry V-C points out in Re Snowden:
‘The whole basis of secret trusts … is that they operate outside of the
will, changing nothing that is written in it, and allowing it to operate
according to its tenor, but then fastening a trust onto the property in the
hands of the recipient’.
7. So a major justification for the ‘independent trust theory’ is still based
on the personal obligation accepted by the ostensible beneficiary (Re
Young (1951)).
8. But the principle has led to some dramatic and controversial results (Re
Gardner (1923)).
9. One final point is whether the secret trust operates as a constructive
trust or as an express trust:
 The theoretical basis of secret trusts 39

■■ in the case of half secret trusts, they can only ever be express as the
trust is apparent on the face of the will;
■■ in the case of fully secret trusts, either could apply;
■■ if they are a means of avoiding formal requirements of the Wills
Act to prevent fraud by the ostensible beneficiary, then they would
operate as constructive trusts;
■■ if they operate independently of the will, then they must be
regarded as express trusts;
■■ the significance is in whether or not s53(1)(b) must be complied with
in the case of a trust of land – it need not be in a constructive trust –
but in Ottaway v Norman an oral fully secret trust of land was upheld
without the issue being discussed.

Fully secret trusts Half secret trusts

Are created to benefit a ‘secret’ Are created to benefit a ‘secret’
beneficiary. beneficiary.

Are not apparent on the face of Are apparent on the face of the will.
the will.

Do not fulfil certain requirements of the Do not fulfil certain requirements of the
Wills Act. Wills Act.

Secret trustee (ostensible beneficiary) Secret trustee is identified on face of

must be informed before testator’s will – and must be informed before will
death of existence and terms of trust – is made – and accept or acquiesce.
and must accept.

If trust fails then ostensible beneficiary If trust fails then gift returns to
takes gift absolutely. testator’s estate as a resulting trust.

Justified originally on basis that they There never could be a fraud on the
avoid fraud on the secret beneficiary. secret beneficiary – because the trust is
apparent on the face of the will.

Are based on intention, communication Are based on intention, communication

– and operate outside the Wills Act. – and operate outside the Wills Act.

Could exist as either an express trust or Can only ever operate as an express
as a constructive trust. trust – because trust apparent on face
of will.

Diagram illustrating the similarities and differences between fully secret trusts and
half secret trusts
This page intentionally left blank
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river bund had been repaired by a new bund built in a half-moon on
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all the next day, and the next night against repeated and determined
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The pontoon was most vulnerable on this side, and it was here that
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protection. The whole affair was visible to our troops on the south
side, who were able to make themselves heard by shouting.
Attempts to get a cable across with a rocket for the passage of
ammunition failed.
At midnight on the 9th and 10th the Turks were on top of the
parapet, but were driven back. One more determined rush would
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kept their heads and maintained cool control of their fire. A corporal
was seen searching for loose rounds and emptying the bandoliers of
the dead. In the end they were reduced almost to their last clip and
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when they were relieved at daylight. The crossing on the night of
the 9th and 10th was entirely successful. With our cavalry and two
columns of infantry working round on the right bank the Turks were
in danger of being cut off, as at Sanna-i-Yat. Before midnight they
had withdrawn their machine guns, leaving only riflemen to dispute
the passage. The crossing upstream was a surprise. We slipped
through the Turkish guard. He had pickets at both ends of the river
salient where we dropped our pontoons. But he overlooked essential
points in it which offered us dead ground uncovered by posts up and
down stream. Consequently our passage here lost us no lives. The
other ferry near the bridge was also crossed with slight loss, owing
to a diversion up-stream. The Turks, perceiving that their flank was
being turned, effected a general retirement of the greater part of
their garrison between the two ferries. Some 250 in all, finding us
bombing down on both flanks, surrendered. The upper crossing was
so unexpected that one Turk was actually bayonetted as he lay
covering the opposite bank with his rifle.
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crossed. Soon after 11 the brigade was complete and the pursuit
continued. The Turks continued their rearguard action, and in the
afternoon there was fighting in the palm groves of Saida, and the
Turks were cleared with the bayonet, after artillery had combed the
wood. The main body was holding the El Mahomed position, one
and a half miles further north—a trench line running nearly four
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evacuated it at night. On the morning of the 12th we entered
Baghdad. Our force on the right bank, after defeating the Turkish
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in addition to the 300 captured on the left bank. The gunboats are
still in pursuit of the enemy, who are reported to be entrenching 16
miles north of Baghdad, covering the entrainment of troops.
 X.

THE BATTLE OF ARRAS.G

By Philip Gibbs.

G
From the “Daily Chronicle” and “Daily Telegraph.”

T O-DAY, at dawn, our armies began a great battle, which, if Fate

has any kindness for the world, may be the beginning of the
last great battles of the war. Our troops attacked on a wide front
between Lens and St. Quentin, including the Vimy Ridge, that great,
grim hill which dominates the plain of Douai and the coalfields of
Lens and the German positions around Arras. In spite of bad fortune
in weather at the beginning of the day, so bad that there was no
visibility for the airmen, and our men had to struggle forward in a
heavy rainstorm, the first attacks have been successful, and the
enemy has lost much ground, falling back in retreat to strong
rearguard lines, where he is now fighting desperately. The line of our
attack covers a front of some 12 miles southwards from Givenchy-
en-Gohelle, and is a sledge-hammer blow, threatening to break the
northern end of the Hindenburg line, already menaced round St.
Quentin. As soon as the enemy was forced to retreat from the
country east of Bapaume and Péronne, in order to escape a decisive
blow on that line, he hurried up divisions and guns northwards to
counter our attack there, while he prepared a new line of defence,
known as the Wotan line, as the southern part of the Hindenburg
line, which joins it, is known as the Siegfried position, after two
great heroes of old German mythology. He hoped to escape there
before our new attack was ready, but we have been too quick for
him, and his own plans were frustrated.

So to-day began another titanic conflict which the world will hold
its breath to watch because of all that hangs upon it. I have seen
the fury of this beginning, and all the sky on fire with it, the most
tragic and frightful sight that men have ever seen, with an infernal
splendour beyond words to tell. The bombardment which went
before the infantry assault lasted for several days, and reached a
great height yesterday, when, coming from the south, I saw it for
the first time. Those of us who knew what would happen to-day, the
beginning of another series of battles greater, perhaps, than the
struggle of the Somme, found ourselves yesterday filled with a
tense, restless emotion, and some of us smiled with a kind of tragic
irony because it was Easter Sunday. In the little villages behind the
battle lines the bells of the French churches were ringing gladly
because the Lord had risen, and on the altar steps the priests were
reciting the splendid old words of faith. “Resurrexi et adhuc tecum
sum. Alleluia” (“I have arisen and I am with thee always. Alleluia”).
The earth was glad yesterday. For the first time this year the sun
had a touch of warmth in it, though patches of snow still stayed
white under the shelter of the banks, and the sky was blue and the
light glinted on wet tree-trunks and in the furrows of the new-
ploughed earth. As I went up the road to the battle lines I passed a
battalion of our men, the men who are fighting to-day, standing in
hollow square with bowed heads while the chaplain conducted the
Easter service. Easter Sunday, but no truce of God. I went to a field
outside Arras and looked into the ruins of the cathedral city. The
cathedral itself stood clear in the sunlight, with a deep black shadow
where its roof and aisles had been. Beyond was a ragged pinnacle of
stone, once the glorious Town Hall, and the French barracks and all
the broken streets going out to the Cambrai road. It was hell in
Arras, though Easter Sunday.
The bombardment was now in full blast. It was a beautiful and
devilish thing, and the beauty of it, and not the evil of it, put a spell
upon one’s senses. All our batteries, too many to count, were firing,
and thousands of gun flashes were winking and blinking from
hollows and hiding-places, and all their shells were rushing through
the sky as though flocks of great birds were in flight, and all were
bursting over the German positions with long flames which rent the
darkness and waved sword-blades of quivering light along the
ridges. The earth opened, and great pools of red fire gushed out.
Star shells burst magnificently, pouring down golden rain. Mines
exploded east and west of Arras and in the wide sweep from Vimy
Ridge to Blangy southwards, and voluminous clouds, all bright with a
glory of infernal fire, rolled up to the sky. The wind blew strongly
across, beating back the noise of the guns, but the air was all filled
with the deep roar and slamming knocks of the single heavies and
the drum fire of the field guns.
The hour for attack was 5.30. Officers were looking at their wrist
watches as on a day in July last year. The earth lightened. A few
minutes before 5.30 the guns almost ceased fire, so that there was a
strange and solemn hush. We waited, and pulses beat faster than
the second-hands. “They’re away,” said a voice by my side. The
bombardment broke out again with new and enormous effects of fire
and sound. The enemy was shelling Arras heavily, and black
shrapnel and high explosive came over from his lines, but our
gunfire was twenty times as great. Around the whole sweep of his
lines green lights rose. They were signals of distress, and his men
were calling for help.
It was dawn now, but clouded and storm-swept. A few airmen
came out with the wind tearing at their wings, but could see nothing
in the mist and driving rain. I went down to the outer ramparts of
Arras. The suburb of Blangy seemed already in our hands. On the
higher ground beyond our men were fighting forward. I saw two
waves of infantry advancing against the enemy’s trenches, preceded
by our barrage of field guns. They went in a slow, leisurely way, not
hurried, though the enemy’s shrapnel was searching for them.
“Grand fellows,” said an officer lying next to me on the wet slope.
“Oh, topping!” Fifteen minutes afterwards groups of men came back.
They were British wounded and German prisoners. I met the first of
these walking wounded afterwards. They were met on the roadside
by medical officers, who patched them up there and then before
they were taken to the field hospitals in ambulances. From these
men, hit by shrapnel and machine-gun bullets, I heard the first news
of progress. They were bloody and exhausted, but claimed success.
“We did fine,” said one of them. “We were through the fourth lines
before I was knocked out.” “Not many Germans in the first
trenches,” said another, “and no real trenches either after shelling.
We had knocked their dug-outs out, and their dead were lying thick,
and the living ones put their hands up.” All the men agreed that their
own casualties were not high, and mostly wounded.

The Next Day.

By three in the afternoon yesterday the Canadians had gained
the whole of the ridge except a high strong post on the left, Hill 145,
which was captured during the night. Our gunfire had helped them
by breaking down all the wire, even round Heroes’ Wood and
Count’s Wood, where it was very thick and strong. Thélus was wiped
utterly off the map. This morning Canadian patrols pushed in a
snowstorm through the Farbus Wood, and established outposts on
the railway embankment. Some of the bravest work was done by the
forward observing officers, who climbed to the top of Vimy Ridge as
soon as it was captured, and through a sea of heavy barrage
reported back to the artillery all the movements seen by them on the
country below.
In spite of the wild day, our flying men were riding the storm
and signalling to the gunners who were rushing up their field guns.
“Our 60-pounders,” said a Canadian officer, “had the day of their
lives.” They found many targets. There were trains moving in Vimy
village, and they hit them. There were troops massing on the sloping
ground, and they were shattered. There were guns and limbers on
the move, and men and horses were killed. Beyond all the prisoners
taken yesterday by the English, Scottish and Canadian troops, the
enemy losses were frightful, and the scenes behind his lines must
have been and still be hideous in slaughter and terror.
The Battle of Arras is the greatest victory we have yet gained in
this war and a staggering blow to the enemy. He has lost already
H
nearly 10,000 prisoners and more than half a hundred guns, and in
dead and wounded his losses are great. He is in retreat south of the
Vimy Ridge to defensive lines further back, and as he goes our guns
are smashing him along the roads. It is a black day for the German
armies and for the German women who do not know yet what it
means to them. During last night the Canadians gained the last
point, called Hill 145, on the Vimy Ridge, where the Germans held
out in a pocket with machine guns, and this morning the whole of
that high ridge, which dominates the plains to Douai, is in our
hands, so that there is removed from our path the great barrier for
which the French and ourselves have fought through bloody years.
Yesterday, before daylight and afterwards, I saw this ridge of Vimy
all on fire with the light of great gunfire. The enemy was there in
strength, and his guns were answering ours with a heavy barrage of
high explosives.

H
Increased to 19,343 prisoners and 257 guns on 2nd May.

This morning the scene was changed as by a miracle. Snow was

falling, blown gustily across the battlefields and powdering the capes
and helmets of our men as they rode or marched forward to the
front. But presently sunlight broke through the storm-clouds and
flooded all the countryside by Neuville-St. Vaast and Thélus and La
Folie Farm up to the crest of the ridge where the Canadians had just
fought their way with such high valour. Our batteries were firing
from many hiding-places, revealed by the short, sharp flashes of
light, but few answering shells came back, and the ridge itself,
patched with snowdrifts, was as quiet as any hill of peace. It was
astounding to think that not a single German stayed up there out of
all the thousands who had held it yesterday, unless some poor
wounded devils still cower in the great tunnels which pierce the
hillside. It was almost unbelievable to me, who have known the evil
of this high ridge month after month and year after year and the
deadly menace which lurked about its lower slopes. Yet I saw proof
below, where all the Germans who had been there at dawn
yesterday, thousands of them, were down in our lines, drawn up in
battalions, marshalling themselves, grinning at the fate which had
come to them and spared their lives.
THE GREAT EXPLOIT OF E. 11: TORPEDOING AN ENEMY VESSEL OFF
CONSTANTINOPLE.
Reproduced by permission of “The Illustrated London News.”
 XI.

WARFARE UNDER WATER.I

By Rudyard Kipling.
They bear, in place of classic names,
Letters and numbers on their skin.
They play their grisly blindfold games
In little boxes made of tin.
Sometimes they stalk the Zeppelin,
Sometimes they learn where mines are laid
Or where the Baltic ice is thin.
That is the custom of “The Trade.”

I
“Sea Warfare.” By Rudyard Kipling. (Macmillan.)

N O one knows how the title of “The Trade” came to be applied to

the Submarine Service. Some say the cruisers invented it
because they pretend that submarine officers look like unwashed
chauffeurs. Others think it sprang forth by itself, which means that it
was coined by the Lower Deck, where they always have the proper
names for things. Whatever the truth, the Submarine Service is now
“the Trade”; and if you ask them why, they will answer: “What else
could you call it? The Trade’s ‘the trade,’ of course.”

It is a close corporation; yet it recruits its men and officers from

every class that uses the sea and engines, as well as from many
classes that never expected to deal with either. It takes them; they
disappear for a while and return changed to their very souls, for the
Trade lives in a world without precedents, of which no generation has
had any previous experience—a world still being made and enlarged
daily. It creates and settles its own problems as it goes along, and if it
cannot help itself no one else can. So the Trade lives in the dark and
thinks out inconceivable and impossible things, which it afterwards puts
into practice.

Four Nightmares.
Who, a few months ago, could have invented, or, having invented,
would have dared to print such a nightmare as this: There was a boat
in the North Sea who ran into a net and was caught by the nose. She
rose, still entangled, meaning to cut the thing away on the surface. But
a Zeppelin in waiting saw and bombed her, and she had to go down
again at once, but not too wildly or she would get herself more
wrapped up than ever. She went down, and by slow working and
weaving and wriggling, guided only by guesses at the meaning of each
scrape and grind of the net on her blind forehead, at last she drew
clear. Then she sat on the bottom and thought. The question was
whether she should go back at once and warn her confederates against
the trap, or wait till the destroyers, which she knew the Zeppelin would
have signalled for, should come out to finish her still entangled, as they
would suppose, in the net. It was a simple calculation of comparative
speeds and positions, and when it was worked out she decided to try
for the double event. Within a few minutes of the time she had allowed
for them, she heard the twitter of four destroyers’ screws quartering
above her; rose; got her shot in; saw one destroyer crumple; hung
round till another took the wreck in tow; said good-bye to the spare
brace (she was at the end of her supplies), and reached the
rendezvous in time to turn her friends.
And since we are dealing in nightmares, here are two more—one
genuine, the other, mercifully, false. There was a boat not only at, but
in the mouth of a river—well home in German territory. She was
spotted, and went under, her commander perfectly aware that there
was not more than five feet of water over her conning-tower, so that
even a torpedo-boat, let alone a destroyer, would hit it if she came
over. But nothing hit anything. The search was conducted on scientific
principles while they sat on the silt and suffered. Then the commander
heard the rasp of a wire trawl sweeping over his hull. It was not a nice
sound, but there happened to be a couple of gramophones aboard, and
he turned them both on to drown it. And in due time that boat got
home with everybody’s hair of just the same colour as when they had
started!
The other nightmare arose out of silence and imagination. A boat
had gone to bed on the bottom in a spot where she might reasonably
expect to be looked for, but it was a convenient jumping-off, or up,
place for the work in hand. About the bad hour of 2.30. a.m. the
commander was waked by one of his men, who whispered to him:
“They’ve got the chains on us, sir!” Whether it was pure nightmare, an
hallucination of long wakefulness, something relaxing and releasing in
that packed box of machinery, or the disgustful reality, the commander
could not tell, but it had all the makings of panic in it. So the Lord and
long training put it into his head to reply: “Have they? Well, we shan’t
be coming up till nine o’clock this morning. We’ll see about it then. Turn
out that light, please.”
He did not sleep, but the dreamer and the others did, and when
morning came and he gave the order to rise, and she rose
unhampered, and he saw the grey, smeared seas from above once
again, he said it was a very refreshing sight.
Lastly, which is on all fours with the gamble of the chase, a man
was coming home rather bored after an uneventful trip. It was
necessary for him to sit on the bottom for awhile, and there he played
patience. Of a sudden it struck him, as a vow and an omen, that if he
worked out the next game correctly he would go up and strafe
something. The cards fell all in order. He went up at once and found
himself alongside a German, whom, as he had promised and
prophesied to himself, he destroyed. She was a mine-layer, and needed
only a jar to dissipate like a cracked electric-light bulb. He was
somewhat impressed by the contrast between the single-handed game
50 feet below, the ascent, the attack, the amazing result, and when he
descended again, his cards just as he had left them.

The Exploit of E 11.

E 11 “proceeded” in the usual way, to the usual accompaniments of
hostile destroyers, up the Straits, and meets the usual difficulties about
charging-up when she gets through. Her wireless naturally takes this
opportunity to give trouble, and E 11 is left, deaf and dumb,
somewhere in the middle of the Sea of Marmara, diving to avoid hostile
destroyers in the intervals of trying to come at the fault in her aerial.
(Yet it is noteworthy that the language of the Trade, though technical,
is no more emphatic or incandescent than that of top-side ships.)
Then she goes towards Constantinople, finds a Turkish torpedo-
gunboat off the port, sinks her, has her periscope smashed by a six-
pounder, retires, fits a new top on the periscope, and at 10.30 a.m.—
they must have needed it—pipes “All hands to bathe.” Much refreshed,
she gets her wireless linked up at last, and is able to tell the authorities
where she is and what she is after.

* * * * *
In due time E 11 went back to her base. She had discovered a way
of using unspent torpedoes twice over, which surprised the enemy, and
she had as nearly as possible been cut down by a ship which she
thought was running away from her. Instead of which (she made the
discovery at 3,000 yards, both craft all out) the stranger steamed
straight at her. “The enemy then witnessed a somewhat spectacular
dive at full speed from the surface to 20 feet in as many seconds. He
then really did turn tail and was seen no more.” Going through the
Straits she observed an empty troopship at anchor, but reserved her
torpedoes in the hope of picking up some battleships lower down. Not
finding these in the Narrows, she nosed her way back and sank the
trooper, “afterwards continuing journey down the Straits.” Off Kilid Bahr
something happened; she got out of trim and had to be fully flooded
before she could be brought to her required depth. It might have been
whirlpools under water, or—other things. (They tell a story of a boat
which once went mad in these very waters, and, for no reason
ascertainable from within, plunged to depths that contractors do not
allow for; rocketed up again like a swordfish, and would doubtless have
so continued till she died, had not something she had fouled dropped
off and let her recover her composure.)
An hour later: “Heard a noise similar to grounding. Knowing this to
be impossible in the water in which the boat then was, I came up to 20
feet to investigate, and observed a large mine preceding the periscope
at a distance of about 20 feet, which was apparently hung up by its
moorings to the port hydroplane.” Hydroplanes are the fins at bow and
stern which regulate a submarine’s diving. A mine weighs anything
from hundredweights to half-tons. Sometimes it explodes if you merely
think about it; at others you can batter it like an empty sardine tin and
it submits meekly; but at no time is it meant to wear on a hydroplane.
They dared not come up to unhitch it, “owing to the batteries ashore,”
so they pushed the dim shape ahead of them till they got outside Kum
Kale. They then went full astern, and emptied the after-tanks, which
brought the bows down, and in this posture rose to the surface, when
“the rush of water from the screws together with the sternway
gathered allowed the mine to fall clear of the vessel.”
Now a tool, said Dr. Johnson, would have tried to describe that.

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