Rochefoucauld v Boustead [1897] 1 Ch 196

Facts

• Rochefoucauld (R) and Boustead (B) agreed orally that B would purchase certain estates and hold them on trust for R until R could repay B and repurchase the land.
• B, contrary to the oral trust agreement, mortgaged and subsequently sold the properties to pay off his debts.
• R asserted her beneficial interest in the land, contending that B held it on trust for her despite the absence of a written declaration of trust at the time of transfer.
• The Statute of Frauds then required written evidence of a declaration of trust of land to enforce such a trust.
• The legal issue arose because there had been no written declaration documenting the trust at the time the property was transferred to B.

Issues

1. Whether an oral agreement to hold land on trust is enforceable in the absence of a written declaration as required by the Statute of Frauds.
2. Whether the statutory requirement for writing can be circumvented to prevent a party from using the lack of writing as an instrument of fraud.
3. Whether subsequent written evidence can establish the existence of an original trust where there was no initial written declaration.

Decision

• The Court of Appeal held that B held the estates on trust for R, ruling in R's favour.
• It found that B's denial of the trust, despite knowing of the oral agreement, was fraudulent conduct.
• The court determined that the requirement for writing in section 7 of the Statute of Frauds was evidential, not a substantive bar to enforcement.
• The judgment allowed for the use of later written evidence to prove the trust, emphasizing that a statute should not be used to perpetrate fraud.
• The date of the writing was held to be immaterial if it could establish the trust's existence.

Legal Principles

• Equity will not allow a statute requiring written evidence of a trust of land to be used as an instrument of fraud.
• The requirement for writing under the Statute of Frauds (and its successor, section 53(1)(b) of the Law of Property Act 1925) is evidential rather than constitutive.
• An express trust of land may be enforced even if not initially documented in writing, provided there is subsequent written evidence or clear conduct evidencing the trust.
• The court distinguishes between the declaration of a trust and the evidence for its enforcement.
• The decision shaped modern trust law, showing flexibility in statutory interpretation to prevent injustice, and has been related to or contrasted with later cases on resulting and constructive trusts.

Conclusion

The Court of Appeal in Rochefoucauld v Boustead established that a trust concerning land may be enforced without original written evidence if necessary to prevent fraud, treating statutory writing requirements as rules of evidence rather than validity and reinforcing equity's priority in achieving just results in trust disputes.