Statute of Frauds (29 Car. 2, c. 3), s. 7—Parol Evidence—Purchase as Trustee—Express Trust—Statute of Limitations—Bankruptcy Act, 1869 (32 & 33 Vict. c. 71), s. 49—Delay—Taking Accounts before Official Referee— Arbitration Act, 1889 (52 & 53 Vict. c. 49), ss. 13, 14—Rules of Supreme Court, 1883, Order XXXIII., rr. 2, 3, 4.

Prior to 1873 the plaintiff, a married woman, was owner of certain estates in Ceylon subject to a considerable mortgage. In 1873 the mortgagees sold and conveyed the estates to the defendant, who, without the privity of the plaintiff, raised large sums by mortgage of them, and afterwards became bankrupt in 1879, and obtained his discharge in 1880. The estates were afterwards sold by the mortgagees. The plaintiff’s case was that the defendant had purchased the estates as trustee for her subject to a lien for his advances. In 1880 the defendant’s trustee in bankruptcy repudiated the plaintiff’s title. The defendant never expressly did so, and the plaintiff never gave either of them to understand that she had given up her claim; but she took no active steps to assert it till 1894, when she commenced an action against the defendant asking for a declaration that the defendant purchased as a trustee for her, and for an account of his dealings with the property, and payment of what should be found due from him. The defendant pleaded - (1.) that the estates were conveyed to him as beneficial owner; (2.) that the trust alleged by the plaintiff was not evidenced by any writing signed by the defendant, and that the Statute of Frauds was a defence; (3.) that the plaintiff’s claim, if proved, was barred (a) by the defendant’s bankruptcy; (b) by the Statute of Limitations; (c) by laches and delay. Kekewich J. held that no trust was proved, and dismissed the action on the first ground. The Court of Appeal, being of opinion that the evidence, which partly consisted of letters signed by the defendant, completely proved that the defendant purchased as a trustee for the plaintiff, and held the estates as such trustee subject to a lien for his expenditure:—
Held, that even if the letters signed by the defendant did not contain enough to satisfy s. 7 of the Statute of Frauds, parol evidence was admissible; and as the whole of the evidence taken together established that the defendant had purchased as a trustee, the plaintiff was entitled to a decree.
The Statute of Frauds does not prevent proof of a fraud, and it is a fraud for a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land as his own. Therefore a person claiming land conveyed to another may prove by parol evidence that it was so conveyed on trust for the claimant, and may obtain a declaration that the grantee is a trustee for him.
 [*197]  Bartlett v. Pickersgill , (1759) 1 Eden 515, is inconsistent with a series of later decisions, and is not now law.
A trust thus established is an express trust within the definition given in Soar v. Ashwell, [1893] 2 Q. B. 390, and the Statute of Limitations, therefore, is no defence to the claim; nor is the bankruptcy of the grantee, if governed by the Bankruptcy Act, 1869, a defence to an action for an account of his dealings with the estates, since by s. 49 of that Act bankruptcy does not bar the claims of a cestui que trust.
The defendant knew that land held by the defendant was claimed by the plaintiff as having been conveyed to the defendant as a trustee for her; and in the correspondence between them he never denied her title, though he never expressly admitted it. The plaintiff took no proceedings for twelve years after the correspondence between them had ceased:—
Held, that as she had done nothing actively to lead the defendant to suppose that she had given up her claim, there was nothing against her but the lapse of time; and that the mere lapse of time in a case of express trust was not a bar.
A very difficult account directed to be taken by an official referee instead of in chambers, on account of the great saving of time which would thus be effected.
THIS was an appeal by the plaintiff from a decision of Kekewich J., who dismissed the action.
The following is a brief outline of the facts of the case. In 1868 the plaintiff, Comtesse de la Rochefoucauld, was the registered owner of the Delmar estates in Ceylon, subject to a mortgage for 25,000l. and further advances, created by a former owner, which had become vested in a Dutch company, and to some smaller subsequent charges. The Comtesse was divorced from her first husband on July 31, 1868, and by an order of the Divorce Court he obtained an interest in the Delmar estates. The Dutch company wished to call in the mortgage, and the Comtesse not being in a position to find the money, and fearing that he might seek to obtain a transfer of the mortgage and foreclose, entered into an arrangement with a Mr. Duff and the defendant, who were anxious to help her, for them to take a transfer of the mortgage. To obviate some difficulties which arose, it was proposed that the Dutch company should sell the estates by auction, and that Mr. Duff and the defendant should enter into an agreement with the company to purchase the estates, if no higher bidder intervened, at a price sufficient to cover their mortgage debt and expenses. An agreement to this effect was signed, but Mr. Duff withdrew from it. The estates  [*198]  were ultimately put up to auction in Ceylon and sold to the defendant for 57,942&., an amount sufficient to cover the debt, interest, and costs of the Dutch company. They were conveyed to him as absolute owner on May 27, 1873, and he was entered on the register.
The case of the Comtesse was that the purchase was made on her behalf, the arrangement with the Dutch company being carried on by the defendant alone after Duff’s retirement, and that the defendant was a trustee for her subject to a charge in his favour in respect of all sums advanced by him in order to obtain the estates from the Dutch company, and of all sums which might be advanced by him to work the estates as coffee plantations.
After the sale had been completed the defendant managed the estates, and remitted to the Comtesse from time to time various sums - amounting in the whole to 5884l. - out of the profits. These payments went on till July, 1879, when the firm of which the defendant was a member went into liquidation. In May, 1880, the defendant obtained his order of discharge.
In 1876, 1877, and 1878 the defendant had, without the knowledge of the Comtesse, mortgaged different parts of the estates for large sums of money, amounting in the whole to more than 70,000l.
On August 9, 1880, the Comtesse by her then solicitor wrote to Mr. Cooper, the trustee of the defendant’s separate estate in the bankruptcy, asserting her title to the estates. Mr. Cooper, on October 29, 1880, wrote to the solicitor, wholly repudiating the claim of the Comtesse, and asserting that the estates belonged to the defendant’s creditors, the defendant, as he stated, having bought them with his own money, and mortgaged and dealt with them as his own. No further correspondence ensued, and no steps were taken by the Comtesse to assert her title.
On November 25, 1882, the defendant, in answer to a letter from the Comtesse, wrote to her as follows:—
“I have received your letter of the 16th, and deeply regret that I have nothing encouraging to report to you; and for this you will no doubt be prepared, as the continued depression in  [*199]  Ceylon estates has been now common talk for the last three years.
“It is true I said in 1879 we need not despair; but I could not then foresee that the terrible blight of leaf disease would so extend throughout Ceylon as in effect to utterly destroy the coffee enterprise, and reduce the annual yield from the 50,000 tons at which it once stood to 14,000 tons estimated for the coming year.
“As regards my own affairs, nothing has been done this year by Mr. Cooper in reporting progress to the creditors for the reason that he and the committee of inspection have been engaged for some months in seeing what can be done to accomplish a favourable arrangement with two or three of the most important mortgagees.
“Unfortunately the estates have all been cultivated at a considerable loss both in 1881 and 1882, and several of them have seriously deteriorated as coffee properties.” (After some further remarks as to the prospects of properties in Ceylon, he continued:—)
“When Mr. Cooper and the committee have concluded their negotiation, I presume the result will be made known at a general meeting whether favourable or unfavourable, and some new resolution arrived at for the working or abandonment of the estates. As coffee properties they have no value, and the difficulty is where is the new capital to come from to develop a new enterprise.”
Again, on December 14, 1882, the defendant wrote to the Comtesse:—
“I have been compelled to delay replying to your letter of 28th ulto. owing to the absence of Mr. Cooper. There are no very recent particulars of the estates and the development of the cinchona and other cultivations. Except that the yield of the coffee trees has ceased, and that the cinchona is so much older and to that extent proportionately more valuable, I think you may consider the returns that were sent to you when a negotiation was opened with Mr. Cassel fairly represent the present position - at any rate, they should suffice to lay before any friend you may be able to interest. As the estates are  [*200]  virtually Mr. Cooper’s it would save time if the negotiation for an advance were made with him. The papers I have referred to above give all particulars of mortgages and mortgage interest, and unhappily through the entire collapse of the coffee no change has been possible in respect to the liabilities.”
The correspondence between the Comtesse and the defendant here practically ended. The defendant afterwards destroyed the books containing the accounts of the estates on the ground that he had no room for them; but he did not say that he did so because he considered the Comtesse to have abandoned her claim.
On December 17, 1887, the Comtesse wrote a long letter to Mr. Hollams, a member of the firm of the defendant’s solicitors, in which, among other things, she asserted her title to the estates. A reply was sent on January 28, 1888, but nothing was said as to her claim of title.
On October 24, 1894, the present action was brought by the Comtesse and her daughter, who claimed an interest in the estates into the nature of which it is not necessary to enter, asking for a declaration that the defendant purchased the estates in 1873 as trustee for the plaintiffs, for an account of the defendant’s dealings as trustee with the trust property, and of the balance due from him in respect thereof, and for payment of such balance. The defendant’s case was - (1.) that the estates were conveyed to him, not as trustee, but as beneficial owner; (2.) that the trusts alleged were not proved by any writing signed by the defendant, and that the Statute of Frauds was a defence; (3.) that the plaintiff’s claim, if proved, was barred (a) by the defendant’s bankruptcy; (b) by the Statute of Limitations; (c) by the plaintiff’s laches, and by the equitable doctrines applicable to delay independently of the statute.
The evidence as to the circumstances under which the estates were conveyed to the defendant consisted of a mass of correspondence both before and after the conveyance, and of the oral evidence of the plaintiff, the defendant, and Mr. Duff. The case was tried by Kekewich J., who held that the evidence did not shew that the defendant had purchased the estates for the benefit of the plaintiff, and dismissed the action without  [*201]  entering upon the second and third branches of the defendant’s case.
The plaintiff appealed. The appeal came on for hearing on October 27, 1896.
Haldane, Q.C., and T. L. Gilmour, for the appeal. We rely upon the correspondence as wholly inconsistent with the idea that the defendant purchased the estates on his own account. The name of the Comtesse was kept in the background that it might not come to the knowledge of her first husband that she still retained an interest in these estates. The letters written and signed by the defendant shew that there was a trust. If the oral evidence is taken in, it is established beyond doubt that the defendant purchased as a trustee for the Comtesse, subject to a lien for his expenditure, and we contend that the letters alone are enough to shew this. The defendant relies on the 7th section of the Statute of Frauds. Ceylon was not a Crown Colony when the Statute of Frauds was passed, and the statute does not apply to land there. The defendant relies on Leroux v. Brown [FN1] as shewing that the Statute of Frauds is a defence; but that case turned on the special wording of the 4th clause of the statute, which only defines the kind of evidence to be required by our Courts in cases falling within it. That case, moreover, has been unfavourably observed upon by the Courts. But, be that as it may, the cases have laid down from an early period that the Statute of Frauds is not to be allowed to enable a man to commit a fraud, and that it is a fraud for a man who knows that an estate was conveyed to him as trustee to deny the trust and claim the estate as his own. They, in fact, establish the principle that where it is sought to establish a trust the Statute of Frauds requires evidence in writing signed by the party to be charged where the trust arises from contract, but not where it arises from conduct: Mestaer v. Gillespie [FN2]; Lincoln v. Wright [FN3]; Haigh v. Kaye [FN4]; In re Duke of Marlborough [FN5], in which last case Stirling J. goes elaborately into the authorities.  [*202]  Bartlett v. Pickersgill [FN6] must be read with reference to these later decisions.

FN1 (1852) 12 C. B. 801.

FN2 (1805) 11 Ves. 621.

FN3 (1859) 4 De G. & J. 16.

FN4 (1872) L. R. 7 Ch. 469.

FN5 [1894] 2 Ch. 133.

FN6 1 Eden, 515.

[LINDLEY L.J. referred to Booth v. Turle. [FN7]]

FN7 (1873) L. R. 16 Eq. 182.

Bartlett v. Pickersgill [FN8] is also referred to unfavourably in Heard v. Pilley [FN9], and the observations of Lord Selborne in Maddison v. Alderson [FN10] are in favour of the rule for which we contend. We say that if a signed writing is required, the defendant’s letters are enough to satisfy the statute; but on the principle of all the later cases oral evidence is admissible, and the oral evidence taken with the letters proves conclusively that the defendant purchased on behalf of the plaintiff and was a trustee for her, subject to his having a lien for his expenditure. There is here an express trust within the definition given by Bowen L.J. in Soar v. Ashwell. [FN11] The claim, then, cannot be barred by the defendant’s bankruptcy, for it took place under the Act of 1869, and by s. 49 of that Act the claims of a cestui que trust are not barred. The trust being express, the Statute of Limitations is no bar, and s. 8 of the Trustee Act, 1888 (51 & 52 Vict. c. 59), does not apply. There can be no defence on the ground of laches or delay. The Comtesse merely delayed to sue because she was short of funds, and was afraid to embark in such a costly litigation. She never misled the defendant in any way, or gave him to understand that her claim was given up. There is nothing against her but that she forebore to sue for about twelve years after the correspondence between her and the defendant ceased. This, in a case of express trust, is no defence.

FN8 1 Eden, 515.

FN9 (1869) L. R. 4 Ch. 548.

FN10 (1883) 8 App. Cas. 467, 475.

FN11 [1893] 2 Q. B. 390.

Renshaw, Q.C., and George Lawrence, for the respondent. If the sale to the respondent was not an out and out sale, he was the holder of the legal estate with an equitable charge: Lord Cranstown v. Johnston [FN12]; Denton v. Donner. [FN13] He was in the position of a mortgagee consignee, and all the correspondence agrees with this. The suit is, therefore, by mortgagor against mortgagee. Now under the Statute of Limitations as  [*203]  to a mortgagee in possession a trust for sale has been held to be a mortgage for the purposes of the statute: Locking v. Parker [FN14]; In re Alison [FN15]; Chapman v. Corpe . [FN16] The Statute of Limitations, therefore, bars the claim.

FN12 (1796) 3 Ves. 170.

FN13 (1856) 23 Beav. 285.

FN14 (1872) L. R. 8 Ch. 30.

FN15 (1879) 11 Ch. D. 284.

FN16 (1879) 27 W. R. 781 .

[LINDLEY L.J. Ward v. Carttar [FN17] is more like the present case.]

FN17 (1865) L. R. 1 Eq. 29.

Then as to the necessity of a trust being evidenced by writing, Leroux v. Brown [FN18] shews that the Statute of Frauds applies independently of the law of Ceylon. The statute has been adopted in Ceylon with modifications, and Ordinance No. 7, 1840 , s. 2, is the enactment in point, and is more stringent than our law.

FN18 12 C. B. 801.

[LORD HALSBURY L.C. That section does not appear to affect equitable rights.]
Then under s. 7 of the statute, Bartlett v. Pickersgill [FN19] is an express authority in our favour. It is cited in Sugden’s Vendors and Purchasers, 14th ed. 703, in terms which shew that Lord St. Leonards approved it; and it is treated in James v. Smith [FN20] as not having been overruled. If the appellants are entitled to an account at all, the Court will only give them mortgage accounts; but they are not entitled to any account. A mortgagee who has sold the estate and holds the proceeds of sale without any express trust can plead the Statute of Limitations after six years: Banner v. Berridge. [FN21] This is a thoroughly stale demand, for the title of the Comtesse was expressly denied in 1880. The defendant after 1882 destroyed the books of account of the estates as useless, and it would be inequitable to make him account now.

FN19 1 Eden, 515.

FN20 1891] 1 Ch. 384.

FN21 (1881) 18 Ch. D. 254.

Haldane, Q.C. , in reply, was desired by the Court to confine himself to the question of delay.
It is shewn that in 1884 the Comtesse could not get solicitors to take up the case on account of her impecunious position, and impecuniosity is an excuse for delay: In re Cross. [FN22] Coming to enforce an equitable title on the ground of trust is  [*204]  not the same thing as coming for specific performance, in which latter case the proceedings must be commenced speedily. An equitable title cannot be barred by such a lapse of time as has occurred here, unless there has been conduct on the part of the cestui que trust which makes it inequitable to enforce the claim.

FN22 (1882) 20 Ch. D. 109.

[THE COURT suggested a compromise on the ground of the extreme difficulty in working out the accounts and inquiries in chambers if the plaintiffs should obtain a decree.]
Cur. adv. vult.

1896. Dec. 12. LINDLEY L.J.
delivered the judgment of the Court (Lord Halsbury L.C. andLindley and A. L. Smith L.JJ.).
The question raised by this appeal is whether the plaintiff is entitled to an account from the defendant of the proceeds of sale of certain coffee estates in Ceylon. The estates in question are known as the Delmar estates. They formerly belonged to the plaintiff; they were mortgaged first to Barings and then to a Dutch company, and on May 27, 1873, they were sold and conveyed to the defendant. In form the conveyance was to him absolutely, but the plaintiff insists that the estates were conveyed to the defendant as a trustee for the plaintiff, subject, however, to the repayment to the defendant of the amount which he paid for them and of the expenses which he has incurred in managing the estates. The estates were sold by the defendant or his mortgagees many years ago without the knowledge of the plaintiff, and she says that the proceeds of sale were more than sufficient to repay to the defendant all his advances, and that a considerable surplus remained which the defendant ought to have paid over to her. The defendant, in answer to this claim, says (1.) the estates were conveyed to him, not as a trustee for the plaintiff, but as beneficial owner; (2.) the trusts alleged by the plaintiff cannot be proved by any writing signed by the defendant, and the Statute of Frauds affords a defence to the action; (3.) the plaintiff’s claim, even if proved, is barred (a) by the defendant’s bankruptcy, (b) by  [*205]  the Statute of Limitations, (c) by the plaintiff’s laches, an the equitable doctrines applicable to delay independently of the statute.
Kekewich J. decided against the plaintiff on the first ground - namely, that there was no trust in favour of the plaintiff. This view of the case rendered it unnecessary for him to consider the other defences. The plaintiff has appealed from this decision; and, as we have been unable to take the same view as the learned judge of the effect of the evidence, it will be necessary for us to deal with all the other defences relied upon by the defendant.
The circumstances under which the Delmar estates were conveyed to the defendant are to be gathered from the verbal testimony of the plaintiff, the defendant, and Mr. Duff, and a mass of correspondence both before and after the conveyance. The correspondence after the conveyance is relied upon by the plaintiff as being inconsistent with the defendant’s contention that he acquired the estates for himself beneficially, free from any trust in favour of the plaintiff. [The Court here stated the leading facts in the history of the case, and then proceeded to examine the correspondence, and adverted to the remittances made by the defendant to the Comtesse between May, 1873, and July, 1879, and to the defendant’s letters to her during that period, and summed up as follows:—]
We come, therefore, to the conclusion that the plaintiff has proved that the estates in question were conveyed to the defendant on May 27, 1873, upon trust for her, but subject to a charge in his favour in respect of all sums advanced by him in order to obtain the estates from the Dutch company in the first instance, and of all sums advanced by him in order to work them as coffee plantations after he had acquired them.
This conclusion renders it necessary to consider whether the Statute of Frauds affords a defence to the plaintiff’s claim. The section relied upon is s. 7, which has been judicially interpreted in Forster v. Hale [FN23] and Smith v. Matthews. [FN24] According to these authorities, it is necessary to prove by some  [*206] writing or writings signed by the defendant, not only that the conveyance to him was subject to some trust, but also what that trust was. But it is not necessary that the trust should have been declared by such a writing in the first instance; it is sufficient if the trust can be proved by some writing signed by the defendant, and the date of the writing is immaterial. It is further established by a series of cases, the propriety of which cannot now be questioned, that the Statute of Frauds does not prevent the proof of a fraud; and that it is a fraud on the part of a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land himself. Consequently, notwithstanding the statute, it is competent for a person claiming land conveyed to another to prove by parol evidence that it was so conveyed upon trust for the claimant, and that the grantee, knowing the facts, is denying the trust and relying upon the form of conveyance and the statute, in order to keep the land himself. This doctrine was not established until some time after the statute was passed. In Bartlett v. Pickersgill [FN25] the trust was proved, and the defendant, who denied it, was tried for perjury and convicted, and yet it was held that the statute prevented the Court from affording relief to the plaintiff. But this case cannot be regarded as law at the present day. The case was referred to in James v. Smith [FN26], and was treated as still law by Kekewich J.; but his attention does not appear to have been called to Booth v. Turle [FN27], nor to Davies v. Otty (No. 2) [FN28], both of which are quite opposed to Bartlett v. Pickersgill. [FN29] So is Haigh v. Kaye. [FN30] The late Giffard L.J., one of the best lawyers of modern times, speaking of Bartlett v. Pickersgill [FN31], said: “It seems to be inconsistent with all the authorities of this Court which proceed on the footing that it will not allow the Statute of Frauds to be made an instrument of fraud”: see Heard v. Pilley. [FN32] The case not only seems to be, but is, inconsistent with all modern decisions on the subject. See, in addition to those already mentioned, Lincoln v.  [*207]  Wright [FN33], where a conveyance absolute in form was held to be a mortgage only. See also In re Duke of Marlborough [FN34], in which Stirling J. examined the authorities, and held that an assignment absolute in form was subject to a trust for the plaintiff.

FN23 (1798) 3 Ves. 696.

FN24 (1861) 3 D. F. & J. 139.

FN25 1 Eden, 515.

FN26 [1891] 1 Ch. 384.

FN27 L. R. 16 Eq. 182.

FN28 (1865) 35 Beav. 208.

FN29 1 Eden, 515.

FN30 L. R. 7 Ch. 469 .

FN31 1 Eden, 515.

FN32 L. R. 4 Ch. 548, 553.

FN33 4 De G. & J. 16.

FN34 [1894] 2 Ch. 133.

The defence, based on the Statute of Frauds , is met by the plaintiff in two ways. First, she says that the documents signed by the defendant prove the existence of the trust alleged; secondly, she says that if those documents do not prove what the trust is with sufficient fulness and precision, the case is one of fraud which lets in other evidence, and that with the aid of other evidence the plaintiff’s case is established. In our opinion the plaintiff is correct in this contention. We are by no means satisfied that the letters signed by the defendant do not contain enough to satisfy the Statute of Frauds. Whether this is so or not, the other evidence is admissible in order to prevent the statute from being used in order to commit a fraud; and such other evidence proves the plaintiff’s case completely.
Counsel for the plaintiff contended that the Statute of Frauds had no application to lands in Ceylon. But, having regard to Leroux v. Brown [FN35], and to the language of s. 7 of the Statute of Frauds, we are unable to see why the defendant should not be able to rely on that statute as a defence to any proceedings in this country having for their object the proof and enforcing of a trust, even of lands abroad. The statute relates to the kind of proof required in this country to enable a plaintiff suing here to establish his case here. It does not relate to lands abroad in any other way than this: it regulates procedure here, not titles to land in other countries. If, therefore, the statute afforded the defendant a defence, he would be entitled to the benefit of it. But, for the reasons above given, the statute affords him no protection.

FN35 12 C. B. 801.

Having come to the conclusion that the plaintiff has proved her case by evidence admissible by our law, it is necessary to consider the other defences  [*208]  The defendant became bankrupt in 1879, and he obtained his discharge in May, 1880. The Bankruptcy Act then in force was the Act of 1869, and by s. 49 of that Act bankrupt trustees were not discharged from the claims of their cestuis que trust. This defence, therefore, fails.
The next defence is the Statute of Limitations. The trust which the plaintiff has established is clearly an express trust within the meaning of that expression as explained in Soar v. Ashwell. [FN36] The trust is one which both plaintiff and defendant intended to create. This case is not one in which an equitable obligation arises although there may have been no intention to create a trust. The intention to create a trust existed from the first. The defendant is not able in this case to claim the benefit of s. 8 of the Trustee Act, 1888 (51 & 52 Vict. c. 59), and the statute which is applicable is the Judicature Act, 1873 (36 & 37 Vict. c. 66), s. 25, sub-s. 2, which enacts as follows: “No claim of a cestui que trust against his trustee for any property held on an express trust, or in respect of any breach of such trust, shall be held to be barred by any Statute of Limitations.” The Statute of Limitations, therefore, afford no defence if the plaintiff’s action is to be regarded as one brought by a cestui que trust against his trustee seeking for an account of trust property. It was, however, urged by the defendant’s counsel that this action was really one for an account by a mortgagor against a mortgagee in possession, and that so regarded one of the Statute of Limitations was a bar to it. In support of this contention counsel cited Locking v. Parker [FN37]; In re Alison. [FN38] These cases undoubtedly shew that a conveyance upon trust for sale to secure a sum advanced is regarded as a mortgage, and that although there may be a trust declared of the surplus in favour of the mortgagor the Statute of Limitations is a bar to an action brought by him for the surplus if his title to the land is barred before a sale by the mortgagee. The ground of these decisions is that the trusts were such that the mortgagor could not enforce them and compel a sale, but could only redeem. Those cases, however, shew that the mortgagor  [*209]  can as cestui que trust enforce the trust of the surplus after a sale if his title to the land is not barred before the sale takes place, as it was in In re Alison. [FN39] Banner v. Berridge [FN40], which was also cited to support the view we are considering, merely shews that a mortgagee selling under a power of sale is not an express trustee of the surplus for the mortgagor in the absence of words creating a trust for him. The mortgagee in that case was a mortgagee of a ship, and he sold as such under his statutory power. The real transactions in those cases were mortgages, and were very different from the real transaction in this case. The real transaction here was a purchase by the defendant for the plaintiff; she claims relief, not as mortgagor, but as the defendant’s cestui que trust, although she admits his lien on the property for his advances; she claims an account of his dealings and transactions with her property, and in particular an account of the money which he has obtained from it. This being the real nature of her claim, the cases to which we have alluded are not applicable to it, and the Statute of Limitations are no bar to the action.

FN36 [1893] 2 Q. B. 390.

FN37 L. R. 8 Ch. 30.

FN38 11 Ch. D. 284 .

FN39 11 Ch. D. 284.

FN40 18 Ch. D. 254.

We come now to the last ground of defence - namely, laches and lapse of time apart from the Statute of Limitations. This is the most difficult part of the case. The time which has elapsed since the plaintiff knew that her claim to the estate was disputed is so considerable that, before giving the plaintiff the relief to which she would otherwise be entitled, it is necessary to consider what her conduct has been, and whether anything has happened to render it unjust to the defendant to compel him to account now. On January 7, 1880, Mr. Saboniere wrote a letter to the plaintiff and told her that the estates belonged to the defendant’s creditors. On August 9, 1880, the plaintiff, by her then solicitor, Mr. Lake, wrote to Mr. Cooper, the defendant’s trustee in bankruptcy, claiming the estates as her own. On October 29, 1880, Mr. Cooper wrote to Mr. Lake and disputed this claim, and asserted the right of the defendant’s creditors to the estates, stating that the defendant had bought them with his own money, and had mortgaged them and dealt with them as his own. It is to be inferred from another letter  [*210]  of Lake’s, dated October 30, 1880, that he communicated the position of affairs to the plaintiff, and explained to her the necessity of making up her mind whether she would or would not embark in a very serious and expensive litigation with the defendant’s trustee in bankruptcy. It is also to be inferred from her subsequent letters that she preferred not to do so, but to wait and see whether the defendant would not be able to make some arrangement with his creditors which would enable him to regain control over the estates, and then recognise her claims to them. She was unquestionably encouraged to do this by the defendant himself. See his letters of November 25 and December 14, 1882. The estates had not then been sold, but were still being carried on. We can find nothing since 1882 which was in any way calculated to induce the plaintiff to believe that her claims would ever be recognised. On the other hand, the defendant, as distinguished from his trustee in bankruptcy, never repudiated them. This suit was not instituted until October 24, 1894, twelve years after the correspondence between the plaintiff and the defendant practically ceased. The principle applicable to cases in which equitable relief is sought after long delay is well expressed in Lord Blackburn’s judgment in Erlanger v. New Sombrero Phosphate Co. [FN41]: “In Lindsay Petroleum Co. v. Hurd [FN42] it is said: ‘The doctrine of laches in courts of equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where, by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. But in every case if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any Statute of Limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances always important in such cases are the  [*211]  length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.”’ Lord Blackburn goes on to say:“I have looked in vain for any authority which gives a more distinct and definite rule than this; and I think, from the nature of the inquiry, it must always be a question of more or less, depending on the degree of diligence which might reasonably be required, and the degree of change which has occurred, whether the balance of justice or injustice is in favour of granting the remedy or withholding it. The determination of such a question must largely depend on the turn of mind of those who have to decide, and must therefore be subject to uncertainty; but that, I think, is inherent in the nature of the inquiry.” In questions of this kind it is not only time, but the conduct of the parties which has to be considered. Before 1882 the defendant had mortgaged the estates as if they were his own, but he concealed such mortgages from the plaintiff. Since 1882 the estates have been sold, and he has received the moneys arising from their sale, but he concealed these transactions from the plaintiff. The defendant also destroyed the books containing the accounts of these estates. He says he did this not because the plaintiff abandoned her claims, but because he had no room for the books. Under these circumstances he can hardly invoke the loss of the books as a reason for refusing relief to the plaintiff. But, as already stated, since 1882 the defendant has done nothing to induce the plaintiff not to sue him, nor to lead her to believe that any claim by her would be recognised. On the other hand, the plaintiff has done nothing actively to lead the defendant to suppose that she abandoned any claim she might have against him as her trustee. There is nothing to be said against her except that she has forborne to sue for twelve years. In 1887 she wrote a letter to Mr. Hollams asserting her rights, but she did no more. Under these circumstances, to hold that time is a bar to the plaintiff’s claim would be to decide that, although the Statute of Limitations is no bar to a suit by a cestui que trust against a trustee in a case of express trust, yet that lapse of time without  [*212]  more is a bar. Such a conclusion cannot be correct, and it was decided to be inadmissible in In re Cross. [FN43] Even where there is an express trust, lapse of time, coupled with other circumstances which render it unjust to give the plaintiff relief against the defendant, will induce the Court to refuse the relief, although no Statute of Limitations might bar his claim: see Bright v. Legerton [FN44] and In re Cross. [FN45] But in this case, which is one of express trust, there is nothing except time, and that without more is not sufficient apart from some Statute of Limitations. This view of the case renders it unnecessary to examine the excuses given by the plaintiff for not instituting proceedings sooner. The appeal must be allowed and the judgment be reversed. It must be declared that the defendant purchased the Delmar estates as a trustee for the plaintiff, but subject to a charge for the amount paid to the Dutch company. An account must then be directed of the defendant’s dealings and transactions with the Delmar estates. The account will be an account as between a trustee and his cestui que trust, not an account as between mortgagor and mortgagee, and there must be no account on the footing of wilful default. The defendant must be allowed all his advances and outlays, with colonial interest; but he ought only to be charged simple interest at 4 per cent. on balances in his hands, unless it appears that he has made more. Minutes had better be prepared and signed, and, if necessary, they can be mentioned to the Court. The defendant must pay the costs of the action up to the hearing and the costs of the appeal.

FN41 (1878) 3 App. Cas. 1218, 1279.

FN42 (1874) L. R. 5 P. C. 221, 239.

FN43 20 Ch. D. 109.

FN44 (1861) 2 D. F. & J. 606.

FN45 20 Ch. D. 109.

Gilmour, for the defendant, asked that the costs might be taxed on the higher scale.
LINDLEY L.J. We have power to make such an order, but it is a power which ought only to be exercised under very special circumstances. There is no ground for exercising it here.
Gilmourthen asked that the accounts might be taken by an official referee instead of in chambers. He referred to the  [*213]  Arbitration Act, 1889 (52 & 53 Vict. c. 49), ss. 13, 14, and Order XXXIII., rr. 2, 3, 4, as giving power to order this, and urged that there would be a great saving of time, as an official referee took a case continuously, whereas the chief clerks could only give appointments at distant intervals.
Renshaw, Q.C., doubted whether in a case of this nature an official referee would be able to proceed continuously, but he did not strongly oppose.
LINDLEY L.J. This is eminently a case for an official referee, and sending it to him will cause a great saving of time.
THE COURT accordingly directed that the case should go to an official referee.

Representation

Solicitor for appellant: G. H. C. Lea. Solicitors for respondent: Hollams, Sons, Coward & Hawksley.

(H. C. J.)


[1897] 1 Ch. 196