Representation re Mileham [2020] JRC 045 (11 March 2020)

Representation re Mileham [2020] JRC 045 (11 March 2020)

The trust was set aside because it was established under two causative mistakes of sufficient gravity: the mistaken belief that corporation tax would be saved and that Mr and Mrs Mileham could benefit from the trust by way of loans. The mistakes were fundamental, the company would not have created the trust but for these mistakes, and it would be unjust to leave them unremedied. There was no sufficient reason to refuse relief on grounds of delay or public policy.

Citation
[2020] JRC 045
Parties
Applicant/representor: F. G. Mileham (Building Contractors) Limited Remuneration Trust; First Representor/applicant: Mr Mileham; Second Representor/applicant: Mrs Mileham; Third Representor/applicant: F. G. Mileham (Building Contractors) Limited; Trustee: Valla Limited (formerly Apex Trust Company Limited); Advocate for Beneficiaries: Advocate Pearmain
Jurisdiction
Jersey
Judgment Date
11 March 2020
Procedural Posture
Application to Set Aside Trust / Judgment After Hearing
Outcome
Application granted; trust set aside and declared void ab initio.
Legal Topics
Mistake in Trust Creation, Setting Aside Trusts, Tax Avoidance Schemes, Discretionary Relief
Trust Law Equity Mistake in Trust Creation Setting Aside Trusts Tax Avoidance Schemes Discretionary Relief

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Parties

F. G. Mileham (Building Contractors) Limited Remuneration Trust

Applicant/representor

Mr Mileham

First Representor/applicant

Mrs Mileham

Second Representor/applicant

F. G. Mileham (Building Contractors) Limited

Third Representor/applicant

Valla Limited (formerly Apex Trust Company Limited)

Trustee

Advocate Pearmain

Advocate for Beneficiaries

Procedural Posture

Application to Set Aside Trust / Judgment After Hearing

Legal Issues

  1. 1 Whether the trust should be set aside on the ground of mistake under English law
  2. 2 Whether the mistakes were causative and of sufficient gravity
  3. 3 Whether discretionary relief should be refused due to delay or public policy

Ratio Decidendi

The trust was set aside because it was established under two causative mistakes of sufficient gravity: the mistaken belief that corporation tax would be saved and that Mr and Mrs Mileham could benefit from the trust by way of loans. The mistakes were fundamental, the company would not have created the trust but for these mistakes, and it would be unjust to leave them unremedied. There was no sufficient reason to refuse relief on grounds of delay or public policy.

Court Disposition

Application granted; trust set aside and declared void ab initio.

Orders

  • The trust is set aside and declared void as if it had never been created.
  • Valla, as trustee, now holds the assets upon trust for the company absolutely.