In the matter of R [2011] JRC 117 (21 June 2011)

In the matter of R [2011] JRC 117 (21 June 2011)

The transfers by the representor to the S Trust and from the S Trust to the New Trusts were made under mistakes as to the fiscal consequences in the UK and USA. These mistakes were of so serious a character that it would be unjust for the trustee and the New Trusts to retain the property. Under Jersey law, as stated in Re the A Trust, the test for mistake is satisfied, and the transfers are voidable at the instance of the representor.

Citation
[2011] JRC 117
Parties
Representor: R; Trustee/respondent: B Limited; Beneficiaries/respondents: Children and grandchildren of R; Respondents: Trustees of the New Trusts (F Trust, G Trust, H Trust)
Jurisdiction
Jersey
Judgment Date
21 June 2011
Procedural Posture
Representation (application) / Judgment on Application for Declarations/orders
Outcome
Orders granted as sought; transfers declared voidable at representor's instance on ground of mistake.
Legal Topics
Mistake in Voluntary Dispositions, Setting Aside Trusts, Restitution, Jurisdiction and Applicable Law, Tax Consequences of Trusts
Equity Trusts Private International Law Mistake in Voluntary Dispositions Setting Aside Trusts Restitution Jurisdiction and Applicable Law Tax Consequences of Trusts

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Parties

R

Representor

B Limited

Trustee/respondent

Children and grandchildren of R

Beneficiaries/respondents

Trustees of the New Trusts (F Trust, G Trust, H Trust)

Respondents

Procedural Posture

Representation (application) / Judgment on Application for Declarations/orders

Legal Issues

  1. 1 Whether the transfer of assets to the S Trust is voidable at the instance of the representor on the ground of mistake
  2. 2 Whether subsequent transfers from the S Trust to the New Trusts are similarly voidable
  3. 3 What law governs the voidability of the transfers (Jersey or English law)

Ratio Decidendi

The transfers by the representor to the S Trust and from the S Trust to the New Trusts were made under mistakes as to the fiscal consequences in the UK and USA. These mistakes were of so serious a character that it would be unjust for the trustee and the New Trusts to retain the property. Under Jersey law, as stated in Re the A Trust, the test for mistake is satisfied, and the transfers are voidable at the instance of the representor.

Court Disposition

Orders granted as sought; transfers declared voidable at representor's instance on ground of mistake.

Orders

  • Declaration that the transfer of shares in C to the trustee as trustee of the S Trust is voidable at the instance of the representor on the ground of mistake.
  • Declaration that the transfers of funds from the S Trust to the New Trusts are similarly voidable at the instance of the representor on the ground of mistake.