“On this motion, the applicant does not ask the court to determine whether a secret trust exists. However, in order to understand the significance of the parties’ arguments, it is helpful to understand what a secret trust is and is not.
The secret trust is described at paras. 46–48 of Gefen Estate v. Gefen, 2022 ONCA 174, 161 O.R. (3d) 267:
[46] A. H. Oosterhoff describes secret trusts in “Secret and Half-secret Trusts,” Ontario Bar Association Continuing Legal Education, Trusts, Trustees, Trusteeships – All You Need to Know and More…, September 18, 2006, at p. 3:
A secret trust comes into existence when a testator leaves property to a person and that person secretly agrees with the testator to hold the property for the benefit of another person. There are two kinds of secret trust. With a fully-secret trust the testator leaves the property to a person apparently absolutely. In other words, the will discloses neither the existence of the trust, nor the name of the beneficiary. With a half-secret trust the will leaves the property to a person in trust, but the will does not disclose the beneficiary. If the requirements for the trust are satisfied, equity will enforce the trust and ensure that the property is given to the intended beneficiary of the trust.
[47] Secret trusts do not comply with the formal requirements of statutes governing wills, but equity intervenes to enforce the trust. Traditionally, this was seen as a means to avoid fraud, as absent intervention by equity, the trustee who received property might keep it, rather than abiding by the terms of the trust.
[48] The trust was secret for a variety of reasons. As explained by A.H. Oosterhoff, Robert Chambers & Mitchell McInnes, Oosterhoff on Trusts: Text, Commentary and Materials, 8th ed., (Toronto: Carswell, 2014), at p. 870:
A testamentary gift that favours one sibling over another, or that reveals the existence of an illegitimate child or secret lover, may generate ill-will or hostility amongst family members and close friends. Better to postpone the storm until after one is gone. Alternatively, a testator may be motivated by a desire for secrecy even after death. Once admitted to probate, a will becomes a public document, available to anyone for a fee. A secret trust allows a testator to conceal the fact that property has been left to, say, a political organization with unpopular views.
The elements of a secret trust were described by the British Columbia Court of Appeal in Champoise v. Prost, 2000 BCCA 426, 77 B.C.L.R. (3d) 228, at paras. 15-16:
[15] A secret trust arises where a person gives property to another, communicating to that person an intention that the property be dealt with in a specific way upon the happening of an event, and the donee accepts the obligation. The essential elements are the intention of the donor, a communication of the intention to the donee and acceptance of the obligation by the donee.
[16] In addition to these requirements for an enforceable secret trust, the three certainties necessary for any express trust must be exhibited; the words making the trust must be imperative, the subject of the trust must be certain, and the object or person intended to take the benefit of the trust must be certain. Further, those certainties must be exhibited at the time the trust is created. [Citations omitted]
As the respondents submit, the Court of Appeal observed, at para. 50 of Gefen Estate, that a secret trust does not arise where a testator was simply providing the trustee with guidance as to her wishes, rather than intending to establish a trust.”