Case: Commissioner of Stamp Duties (Queensland) v Jolliffe [1920] HCA 45 ; (1920) 28 CLR 178
Outcome: applied
His Honour referred to Commissioner of Stamp Duties (Queensland) v Jolliffe [1920] HCA 45 ; (1920) 28 CLR 178 at 181 where Knox CJ and Gavan Duffy J applied the following statement in Lewin on Trusts (11 th ed, 1904) at p 85: "It is obviously essential to the creation of a trust, that there should be the intention of creating a trust, and therefore if upon a consideration of all the circumstances the Court is of opinion that the settlor did not mean to create a trust, the Court will not impute a trust where none in fact was contemplated". 56 Young CJ in Eq observed that this passage had been included in all subsequent editions of Lewin up to and including the sixteenth (1964) edition. However, in the seventeenth edition (2000) the authors suggested that the dissenting judgment of Isaacs J (who favoured an objective, rather than subjective test when considering whether a trust had been declared) would today be preferred in England. His Honour commented (at [38]): "Whether this is so or not, Jolliffe's case , or at least Jolliffe's case as interpreted by later decisions of the High Court, is binding on me." 57 His Honour observed that the High Court had revisited the question whether the approach taken in Jolliffe correctly stated the law on at least two occasions. In Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) [2000] HCA 25 ; (2000) 202 CLR 588 Gaudron, McHugh, Gummow and Hayne JJ said (at [33]). "In Kauter v Hilton , the Court treated Jolliffe as deciding, for the purposes of the legislation there in question, that "[a]ll the relevant circumstances must be examined in order to determine whether the depositor really intended to create a trust"." (Footnote omitted.) 65 It should be noted that most judicial statements of the parol evidence rule are concerned with its application to contracts. See, eg, Bank of Australasia v Palmer [1897] AC 540 at 545. Plainly, the test for intention in the law of contract is objective, and not subjective. In such circumstances, one can readily understand the difficulty in seeking to lead evidence of the subjective intent of the parties, (unless one enters into the realm of sham). Jolliffe establishes that the test for intention in relation to a declaration of trust is subjective. In principle, therefore, the parol evidence rule would not be expected to operate to exclude evidence which bears upon the actual intent of the declarant at the time of the purported declaration of trust. 67 In Starr v Starr [1935] SASR 263, Napier J referred to Jolliffe , and stated (at 266): "It may well be that a court of co-ordinate jurisdiction might regard the authority of that case as impaired by the emphatic dissent of Isaacs J., but I think that I am bound by the principle upon which the case was decided." 68 Napier J noted that Isaacs J had referred to the parol evidence rule. His Honour then referred to the following statement from the majority judgment in Jolliffe (at 181): "We know of no authority, and none was cited, which would justify us in deciding that by using any form of words a trust can be created contrary to the real intention of the person alleged to have created it." 69 Napier J concluded that parol evidence was admissible to show that the various declarations of trust in issue in the case before him were never intended to operate as binding declarations of trust. 71 Dr Glover submitted, albeit only formally, that the majority judgment in Jolliffe did not state the law correctly, and that the dissenting judgment of Isaacs J should be preferred. He acknowledged, however, that the majority judgment was binding upon me. That is obviously so, particularly since Jolliffe has been cited without disapproval in later High Court decisions. It has also been applied by the Full Court of this Court. See, for example, Baker v Official Trustee in Bankruptcy , Federal Court of Australia, unreported, 3 August 1995 per Burchett, Ryan and Carr JJ; and Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415 at 422. 72 Dr Glover also submitted that both Starr v Starr and B &amp; M were wrongly decided. I reject that submission. I cannot see how the parol evidence rule can apply, with full rigour, in circumstances where the actual state of mind of the declarant must be ascertained. If the submission were correct, it would lead to peculiar outcomes. For example, evidence could not be received of a contemporaneous oral statement by a declarant that, despite the use of the term "declaration of trust" in a document then executed, no such trust was actually intended. That would be contrary to what the majority in Jolliffe identified as the task to be undertaken in determining whether a declaration of trust had been made.