## Facts

- The testator, O, left his house to his housekeeper, H, with the understanding that she would transfer it to his son, W, and his wife after her death.
- The arrangement regarding the house was not stated explicitly in the will but communicated privately to H during O's lifetime.
- After O's death, H instead left the house to N, her executor, by will.
- The children of O claimed that the property should be held on trust for them and not for the beneficiary in H’s will.
- The court was required to determine whether a secret trust had been created over the property, and if so, whether N was bound by that trust as H’s executor.

## Issues

1. Whether a secret trust had been validly created based on the testator’s intention, communication to the primary donee, and the donee’s acquiescence.
2. Whether fraud on the part of the primary donee is necessary for the imposition or enforcement of a secret trust.
3. Whether the trust was enforceable against the executor, N, notwithstanding the contents of H’s will.
4. Whether the timing of the trust’s enforceability (the 'suspended trust' concept) affected the interests of the beneficiaries.

## Decision

- The court held that a secret trust had been established in favour of O’s children.
- It was found that O intended to create a trust, communicated this intention to H, and H had acquiesced.
- The court confirmed that fraud by the primary donee is not a prerequisite for imposing a secret trust.
- The trust was enforceable against N as executor, obliging N to transfer the property to O’s children according to the terms of the secret trust.
- The court adopted a 'suspended trust' analysis, indicating the trust comes into effect at the death of the primary donee.

## Legal Principles

- A secret trust requires three key elements: the testator’s intention to create an obligation; communication of that intention to the primary donee; and the primary donee’s acceptance or acquiescence.
- The existence of fraud by the primary donee is not necessary for the establishment or enforcement of a secret trust.
- Secret trusts can be characterized as being 'suspended' until the primary donee’s death, at which time the obligation binds the estate.
- The principles established for secret trusts are applicable both to fully secret and, by implication, to half-secret trusts.

## Conclusion

Ottaway v Norman [1972] Ch 698 clarified that the validity of a secret trust depends on intention, communication, and acquiescence, not on fraud by the recipient; the court affirmed such trusts are enforceable to realise the testator’s communicated wishes and formalised the 'suspended trust' analysis for timing of their operation.