Ong & Ors v Ping

An express trust of land may be established by objectively construed words and conduct, even where the trust instrument does not complete its intended method of constituting the trust, provided the property and terms are sufficiently identified. Section 53(1)(b) of the Law of Property Act 1925 requires manifestation and proof in signed writing, but the relevant terms may be assembled from connected documents.

A judgment obtained by fraud may be set aside where conscious and deliberate dishonesty was material and causative. Lack of candour alone is insufficient. A person directly affected by an order may apply under CPR 40.9, and beneficiaries may pursue relief where earlier orders were themselves tainted by fraud.

The claim concerned a London house purchased by Madam Lim, mother of the defendant and grandmother of three of the claimants. A trust instrument was signed by Madam Lim and the defendant in 1986, but its schedule identifying the initial settled property was left incomplete.

The claimants sought declarations that the house, and later its sale proceeds, were held on a discretionary trust. They also sought to set aside earlier possession and financial orders on the ground that Madam Lim had obtained them by fraud. The defendant counterclaimed for revocation or rescission of the trust on the basis of mistake.

The central issues were whether the signed instrument and related correspondence created a trust, whether the trust could be revoked or rescinded, and whether earlier orders had been obtained by fraud.

1. Trust. On an objective assessment of the documents and conduct, Madam Lim intended to hold the house on the terms of the signed trust instrument. The instrument, read with her letter of 14 April 1986 referring to the house and enclosing the executed document, sufficiently identified the trust property. The trustees also accepted the house as trust property. The requirements of section 53(1)(b) of the Law of Property Act 1925 were satisfied by the signed letter and executed instrument read together.
2. Rectification. No rectification was necessary. The court declined to decide the unresolved legal questions concerning rectification of an ineffective voluntary settlement and the standing of volunteers, because those questions would not affect the result.
3. Revocation and mistake. The evidence did not establish that Madam Lim believed the trust was revocable or equivalent to a will. Her estate therefore failed on the factual case of mistake. The court also observed that, even if a mistake had existed, unilateral out-of-court revocation would not necessarily follow.
4. Trust structure. Madam Lim and the defendant were trustees. A person may accept trusteeship by executing the trust instrument even though the trust property has not vested in that person. The trust was discretionary. The children were named beneficiaries; Jane was not. The trustees had to exercise their discretions honestly, in good faith, impartially, for proper purposes, and on the basis of relevant considerations.
5. Fraud and earlier orders. A judgment or order may be set aside for conscious and deliberate dishonesty which is material and causative of the result. Madam Lim’s misleading evidence and statements materially caused the Collier and Coleridge Orders, which were set aside. The Rich Order was not set aside because the alleged dishonesty was not shown to have caused it. The mesne profits assessment was set aside because the stay on assessment had not been validly lifted.
6. Children’s position. The children were directly affected by the possession order and could in principle apply under CPR 40.9. Their claim for declaratory relief was not an abuse of process, particularly because Madam Lim had herself misled the court. The writ of possession was not set aside because doing so would have no practical effect.