A and B v C and Ors [2018] JRC 174A (18 September 2018)

A and B v C and Ors [2018] JRC 174A (18 September 2018)

The mistake regarding tax consequences was sufficiently serious that the trustees would not have made the 2001 Transfers but for the mistake; therefore, the transfers and related dispositions are voidable and set aside ab initio under Article 47G of the Trusts (Jersey) Law 1984. Administrative actions and distributions are ratified as valid due to substantial overlap in beneficiaries and absence of objection.

Citation
[2018] JRC 174A
Parties
Applicant: First Representor (A); Applicant: Second Representor (B); Respondent: Respondents
Jurisdiction
Jersey
Judgment Date
18 September 2018
Procedural Posture
Trust Law Representation / Final Judgment
Outcome
Application granted; 2001 Transfers, 2012 Transfer, and Termination Distributions set aside ab initio; administrative actions and distributions ratified; 1973 Trust not terminated.
Legal Topics
Mistake in Trust Disposition, Setting Aside Trust Transfers, Inheritance Tax, Capital Gains Tax, Ratification of Trustee Actions
Trusts Taxation Private International Law Mistake in Trust Disposition Setting Aside Trust Transfers Inheritance Tax Capital Gains Tax Ratification of Trustee Actions

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Parties

First Representor (A)

Applicant

Second Representor (B)

Applicant

Respondents

Respondent

Procedural Posture

Trust Law Representation / Final Judgment

Legal Issues

  1. 1 Whether the 2001 Transfers and subsequent dispositions should be set aside for mistake under Trusts (Jersey) Law 1984
  2. 2 Whether administrative actions and distributions under the 2001 Trust should be ratified
  3. 3 Whether the termination of the 1973 Trust was valid

Ratio Decidendi

The mistake regarding tax consequences was sufficiently serious that the trustees would not have made the 2001 Transfers but for the mistake; therefore, the transfers and related dispositions are voidable and set aside ab initio under Article 47G of the Trusts (Jersey) Law 1984. Administrative actions and distributions are ratified as valid due to substantial overlap in beneficiaries and absence of objection.

Court Disposition

Application granted; 2001 Transfers, 2012 Transfer, and Termination Distributions set aside ab initio; administrative actions and distributions ratified; 1973 Trust not terminated.

Orders

  • Declaration that the exercise of trustees' powers establishing the 2001 Trust and effecting the 2001 Transfers, 2012 Transfer, and Termination Distributions are voidable and set aside ab initio.
  • Declaration that the 1973 Settlement was not terminated and exists on the same terms as immediately prior to 2nd March 2012.