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her money, nor the money which she derivedfrom the testator’s will, because this would be unworkable unless thatmoney was kept separately.b.)Half Secret Trust:The only difference in a half secret trust is that the will discloses theexistence of the trust, though not the objects or the terms of the trust. Inthis situation, the trustee cannot deny the existence of a trust tofraudulently keep the property. The declaration of the trust should be prioror simultaneous with the will.II.)Justifications for Their Enforcement:Under a secret trust, the legatee or the trustee only undertakes amoral obligation. The important questions are that “Why and in whatcircumstances these moral obligations should be given legal effect,especially when they do not fulfil statutory requirements?” Two theorieshave been devised to justify this:a.)The Fraud Instrument:“Equity will not allow a statute enacted to prevent fraud to be usedas an instrument of fraud”. Thus, statutory provision cannot be used toperpetrate a fraud as requiredStatute of Fraud 1677e.g.“Rochefoucauld v. Boustead”. Similarly, if a trustee relies on the factthat formalities, in accordance with S.9, have not been fulfilled and heshould take the gift absolutely, then he would be using the statue tocommit a fraud. Thus, the “fraud doctrine” allows admissibility of evidencecontrary to S.9 for the enforcement of secret trusts.In “McCormick v. Grogan”, a testator, on deathbed, told his friendG that he is giving all his property to him under the will. Then he onlytoldhim where to find the will and a letter with it. The letter contained variousintended beneficiaries and their gifts and gave a lot of discretion to G. Hecomplied with the letter. Later, an intended beneficiary, whom G thoughtit right to exclude, sued to declare G as a secret trustee. The House ofLords refused to do so because to invoke the fraud theory it must beshown either that: (1) the testator was fraudulently induced in making anabsolute gift under the will in favour of the legatee; or(2) merely the
Secret Trusts3defendant’s fraudulent refusal to comply with the wishes of the ownerupon which the owner relied and disposed of the property. On the facts ofthe case, there was no bad conscience or fraud on part of G so the secrettrust would not be enforced against him.With the development of law, the second reason has been acceptedas the one which invokes the fraud theory. As in “Re Gardener (No. 1)”,it was stated that a breach of trust or fraud would arise only when thelegatee attempts to deal with the money contrary to the terms on whichhe agreed with the testator to take the property.However, this theory is not so effective due to a few discrepancies.