While this diverges in some ways from what he said in oral evidence, part of the divergence is explained by the intervening deaths of the testator's sister and Frank Salmond, and it reflects the current gifts to the Seventh Day Adventist Church and to the Singh boys beneficially.
13 In 1999 James Cirulis, an associate of John Salm, procured the transfer to him from each of the three Singh boys of his share in the plaintiff company. Mr Cirulis is now a director of the plaintiff. At the time of the transfer Rohan has given evidence that he did not have any knowledge that there was a gift to the plaintiff in the testator's will. James has stated that he was equally ignorant. Alexander wrote a letter in which he indicated that he knew of the terms of a secret trust by hearsay but did not in the letter set out its terms. He stated that to any extent he had an interest under the will he would demand that it be paid to his mother. The estate has been reduced to cash in a sum in excess of $240,000.
THE LAW
14 The locus classicus as to secret trusts is the statement of Lord Davey in the House of Lords in French v French [1902] 1 IR 172 set out in the passage from Brown v Pourau [1995] 1 NZLR 352 quoted below. Lord Davey's formulation was approved in the High Court in Voges v Monahan (1954) 94 CLR 231 at 240 - 241. The modern law was usefully stated by Hammond J in the High Court of New Zealand in Brown v Pourau supra at 366 - 367, where his Honour said:
"The jurisdiction classically appealed to to address this problem was clearly expounded by Lord Davey in French v French [1902] 1 IR 172, 230:
'It is now well established, and has been settled since the time of Lord Hardwicke, that if a testator communicates in his lifetime to a proposed devisee or legatee that he has left him his property, and expresses a wish that the property should be disposed of in a particular manner, and the legatee or devisee by acquiescence, or even by silence, accepts that communication, and the testator dies without any repudiation, a trust is fastened upon his conscience, as it is said, and he cannot afterwards either appropriate the property to his own use or dispose of it otherwise than in accordance with the wishes which were thus communicated to him, and which he has accepted.
My Lords, it is said that this jurisdiction is based upon fraud, and so it is, because if you once get to this, that it is a trust which is imposed upon the conscience of the legatee, then if the legatee betrays the confidence in reliance upon which the bequest was made to him, then it is what I should think everybody would consider a fraud, though I take the liberty to say that the moral turpitude of any particular case must vary infinitely according to the circumstances of the particular case. My Lords, the basis of it is of course that the testator has died, leaving the property by his will in a particular manner on the faith and in reliance upon an express or implied promise by the legatee to fulfil his wishes, and your Lordships will at once see that it makes no difference whatever whether the will be made before the communication to the legatee or afterwards, because, as was said, I think, by Vice-Chancellor Turner in one of the cases which was cited, the presumption is that the testator would have revoked his will and made another disposition if he had not relied upon the promise, express or implied, made by the legatee to fulfil his wishes.'
Secret trusts are said to be fully secret, or half secret. The former give us no hint of a trust on their face; the latter indicate a trust, but not its terms.
The elements required to establish a fully secret trust were concisely stated by Viscount Sumner in Blackwell v Blackwell [1929] AC 318, 334:
'The necessary elements, on which the question turns, are intention, communication, and acquiescence. The testator intends his absolute gift to be employed as he and not as the donee desires; he tells the proposed donee of this intention and, either by express promise or by the tacit promise, which is signified by acquiescence, the proposed donee encourages him to bequeath the money in the faith that his intentions will be carried out.'
I emphasise that these requirements are conjunctive. What has to be shown is that there was a communication to the devisee (or intestatee) of the deceased's intentions, and an acceptance by that person of the request that she hold the property on trust for the enumerated purposes or persons. As to the intention, a binding obligation must be intended. What must be intended is a trust in the legal sense of that term, which signifies a positive obligation. But the communication of that intention is an essential factor - if not the most essential - because otherwise the devisee can, completely reasonably, be heard to say, 'I took the will to mean precisely what it says on its face'. But once the communication is established, acceptance, though of course a necessary element can, in an appropriate case, be spelled out of the silence of the devisee. The view evolved through the Chancery Courts was that if any person has received a request of this nature that .person would be bound to say something if she or he rejected the notion that she or he should not enjoy the property beneficially."