in the matter of the Z Trust [2016] JRC 048 (22 February 2016)

in the matter of the Z Trust [2016] JRC 048 (22 February 2016)

The appointment of the Purported Trustees was set aside because the settlor failed to exercise her fiduciary power in the interests of all beneficiaries, failed to obtain or consider adequate tax advice, acted irrationally based on unfounded fears, and made a serious mistake as to the consequences of her actions. The mistake was sufficiently serious to justify relief under the Trusts (Jersey) Law 1984. The related company transactions were also set aside as a necessary consequence. The Court exercised its inherent and statutory jurisdiction to relieve the Retired Trustee and Purported Trustees from personal liability (with exceptions) and to confirm or ratify certain administrative acts...

Citation
[2016] JRC 048
Parties
Applicant/beneficiary: The Beneficiary (Fourth Respondent); Purported Trustee/respondent: The Representor; Purported Trustee/respondent: First Respondent; Retired Trustee/respondent: Second Respondent (Retired Trustee); Not a Party, Notified Only: HMRC
Jurisdiction
Jersey
Judgment Date
22 February 2016
Procedural Posture
Trust Law Application / Judgment on Application to Set Aside Appointment of Trustees
Outcome
Application granted. Appointment of Purported Trustees set aside. Related company transactions set aside. Retired Trustee reinstated and permitted to retire in favour of New Trustee. Certain acts of Purported Trustees confirmed or ratified. Relief from personal liability granted to Retired Trustee and Purported...
Legal Topics
Setting Aside Trustee Appointments, Fiduciary Duties, Mistake in Exercise of Powers, Tax Consequences of Trust Residence, Ratification of Acts by Trustees De Son Tort
Trusts and Estates Private International Law Taxation Setting Aside Trustee Appointments Fiduciary Duties Mistake in Exercise of Powers Tax Consequences of Trust Residence Ratification of Acts by Trustees De Son Tort

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 20 Party arguments 2 Amounts and remedies 10
Sign in to unlock

Parties

The Beneficiary (Fourth Respondent)

Applicant/beneficiary

The Representor

Purported Trustee/respondent

First Respondent

Purported Trustee/respondent

Second Respondent (Retired Trustee)

Retired Trustee/respondent

HMRC

Not a Party, Notified Only

Procedural Posture

Trust Law Application / Judgment on Application to Set Aside Appointment of Trustees

Legal Issues

  1. 1 Whether the appointment of the Purported Trustees should be set aside for breach of fiduciary duty and/or mistake
  2. 2 Whether the acts of the Purported Trustees and related company transactions should be set aside or ratified
  3. 3 Whether the Retired Trustee and Purported Trustees should be relieved from personal liability

Ratio Decidendi

The appointment of the Purported Trustees was set aside because the settlor failed to exercise her fiduciary power in the interests of all beneficiaries, failed to obtain or consider adequate tax advice, acted irrationally based on unfounded fears, and made a serious mistake as to the consequences of her actions. The mistake was sufficiently serious to justify relief under the Trusts (Jersey) Law 1984. The related company transactions were also set aside as a necessary consequence. The Court exercised its inherent and statutory jurisdiction to relieve the Retired Trustee and Purported Trustees from personal liability (with exceptions) and to confirm or ratify certain administrative acts...

Court Disposition

Application granted. Appointment of Purported Trustees set aside. Related company transactions set aside. Retired Trustee reinstated and permitted to retire in favour of New Trustee. Certain acts of Purported Trustees confirmed or ratified. Relief from personal liability granted to Retired Trustee and Purported...

Orders

  • Appointment of Purported Trustees as trustees of the Trust set aside ab initio.
  • Retired Trustee's retirement declared invalid; Retired Trustee reinstated as trustee.