In the matter of the J Settlement [2019] JRC 111 (13 June 2019)

In the matter of the J Settlement [2019] JRC 111 (13 June 2019)

The trustee's decisions were made under a mistake as to tax consequences, which was serious and directly caused substantial avoidable tax liabilities. Relief under Article 47G is just, and consequential orders are appropriate to set aside company resolutions and share issues linked to the mistaken trustee decisions.

Citation
[2019] JRC 111
Parties
Applicant: First Representor (the trustee); Applicant: Second Representor; Respondent: Third Respondent; Respondent: First Respondent; Principal Beneficiary/economic Settlor: Mr F; Interested Party: Her Majesty's Revenue and Customs (HMRC)
Jurisdiction
Jersey
Judgment Date
13 June 2019
Procedural Posture
Trust Law Application / Final Judgment
Outcome
Application granted; trustee decisions and consequential company resolutions set aside as voidable and of no effect.
Legal Topics
Mistake in Trust Administration, Setting Aside Trustee Decisions, Tax Consequences of Trust Transactions, Jurisdiction Over Consequential Company Orders
Trusts Taxation Company Law Mistake in Trust Administration Setting Aside Trustee Decisions Tax Consequences of Trust Transactions Jurisdiction Over Consequential Company Orders

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Parties

First Representor (the trustee)

Applicant

Second Representor

Applicant

Third Respondent

Respondent

First Respondent

Respondent

Mr F

Principal Beneficiary/economic Settlor

Her Majesty's Revenue and Customs (HMRC)

Interested Party

Procedural Posture

Trust Law Application / Final Judgment

Legal Issues

  1. 1 Whether trustee decisions and consequential company resolutions can be set aside for mistake under Jersey law
  2. 2 Whether tax consequences constitute a relevant mistake under Article 47G/H
  3. 3 Whether the Court should grant relief or leave parties to negligence litigation against advisers

Ratio Decidendi

The trustee's decisions were made under a mistake as to tax consequences, which was serious and directly caused substantial avoidable tax liabilities. Relief under Article 47G is just, and consequential orders are appropriate to set aside company resolutions and share issues linked to the mistaken trustee decisions.

Court Disposition

Application granted; trustee decisions and consequential company resolutions set aside as voidable and of no effect.

Orders

  • Special resolution passed by Second Representor and First Respondent as members of Second Respondent set aside as ultra vires; no new memorandum/articles adopted; no A or B preference shares created.
  • Directors' decisions to issue and allot A and B preference shares to trustee set aside.