ROCHEFOUCAULD v BOUSTEAD

Does the creation of a trust rely upon written acknowledgement, or can the verbal promises of another to act in many respects as a fiduciary, provide evidence enough of an intention to serve as a trustee?

In an unusual arrangement between a lady of nobility and her business associate, the latter was asked to purchase an estate that she might otherwise lose through the rigours of her recent divorce.

While once a thriving coffee plantation, the land in question was by all accounts operational but subject to increased crop damage; yet without the revenue historically provided, there was little chance that the appellant could continue to live within means accustomed to.

This led to her asking her colleague to secure a conveyance of the property from the mortgagees on the proviso that she would over time, reimburse him for the cost of the purchase and any additional costs incurred during the management and administration of the business. 

Although not expressly stated in any official correspondence at the time, this verbal arrangement served to create a settlor and trustee relationship that benefitted both parties, albeit with overall beneficial interest remaining in the hands of the appellant.

After a number of years, the company deteriorated into insolvency, whereupon the appellant made claim for her beneficial title to avoid any loss to creditors.

It was then argued that the mortgage had enabled the respondent full legal title to the land (upon which he had previously mortgaged out portions for personal profit), and that this deed protected any claim to the contrary.

The right was claimed in addition to the twelve years where no legal proceedings were instigated by the appellant; a delay which  was ultimately denied through the statute of limitations and the estoppel of laches.

When first heard, the judge awarded in favour of the defendant with little investigation of the collected evidence; and so, when taken to appeal, the Court was more diligent when reaching a verdict.

Having looked closely at the correspondence both before and after the initial conveyance, it became clear that while nothing had been set to paper, there was never any indication that anything less than a trust/trustee arrangement had been effected, and that the appellant’s beneficial interest was never held in question.

Adding to the fact that the respondent had acted in a clandestine manner when selling land for gain before destroying the business accounts, there was little upon which he could rely when claiming ‘reasonable’ behaviour.

With collective agreement that the appellant did have a right to claim legal title upon grounds of an express trust, the only stumbling block was the length of time in which it took her to seek remedy.

Having then explained that financial difficulties, faith in the defendant’s honesty and conflicting legal advice had dissuaded her from pursuing it in the courts, the judges concluded that there was nothing justiciable to prevent her from recovery of the estate; and so, reversed the previous judgment and awarded in her favour, while the court reminded the parties that:

“[I]t is a fraud on the part of a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land himself.”

GILLETT v HOLT

The notorious ambiguity of estoppel is explored here through the unexpected end of a lifelong working relationship built upon trust, duty and a faith of spirit, and as is so often found in matters such as these, a man’s word is not always his bond.

After investing the best part of forty years into a farming alliance that created an almost familial structure, the arrival of a divisive party witnessed the destructive end of a mutually prosperous and seemingly concrete friendship.

When a younger man forged a meaningful relationship with an older farmer, the two men became almost father and son, with the former relying upon, and often following the wisdom of the latter, in accordance with domestic arrangements, career aspirations and even parenting decisions; all while sustaining and enriching the estate’s financial footing through the course of his duties.

This interdependence became the foundation of a commercial enterprise that by definition became more complex; and so, required increased investment from both the employer’s paid advisers and the younger man’s wife as a co-contributor.

During the many years spent together, there had been a significant number of verbal declarations as to the intentions of the elder man when it came time to choose a successor to his sprawling estates, and it was these quasi-promises, along with multiple wills, that coloured the appellant’s choice-making and calculated reluctance to set aside the type of financial provisions one might ordinarily expect.

The mechanics of the business and associated friendship continued to flourish, until the arrival of a trained solicitor, who for one reason of another, began making spurious claims that the appellant and his wife were defrauding the business, and that legal intervention was ultimately necessary.

This course of action and influential advice also led to the couple’s removal from the existing will, whereupon sole beneficial rights instead passed to the now co-defendant.

After an exhaustive cross-examination in the original hearing, the deciding judge awarded against the appellant, despite his claim of proprietary estoppel following the removal of his presence in the will, and inherent reliance upon the goodwill of the defendant during the passage of time.

At appeal, the fluid and therefore often misinterpreted principle of estoppel, was held to close scrutiny, along with the previous findings of the judge; whereupon it became clear that while a degree of effort had been put into the relevance of estoppel, the obvious right to claim had been lost to principles attributable to succession law.

Through the delicate use of equity, the Court then agreed that there was ample evidence to show a detriment under continued reliance, and that in order for a clean break to exist, there needed to be a reversal of fortune on the part of the co-defendant, and a ‘coming good’ on the word of the older man, while the court reminded the parties that:

“[A]ssurance is more than a mere statement of present (revocable) intention, and is tantamount to a promise.”

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