Jersey Judgment

In re Esteem Settlement v [2003] JLR 188 (13 June 2003)

Trusts Sham Trusts Intention of Donor Trustee Intention Beneficial Ownership

Citation: [2003] JLR 188
Status: Judgment
Jurisdiction: Jersey
Posture: Trust Law / Judgment

More details

Posture: Trust Law / Judgment

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Professional case brief

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Source document

Holding and result

A trust is only a sham if both settlor and trustee have a dishonest common intention that the true beneficial position is other than as stated in the trust deed; individual transactions may be shams even if the trust is valid.

Court disposition

Trust not a sham; individual transactions may be shams.

Material facts

Parties

Esteem Settlement

Applicant

Procedural history

Posture

Trust Law / Judgment

Questions and positions

Legal issues

01
Whether the trust was a sham
02
Whether both settlor and trustee intended the beneficial position to differ from the trust deed
03
Whether individual transactions under a trust can be shams even if the trust itself is valid

Party arguments

Applicant: The trust is not a sham unless both the settlor and trustee intended the true beneficial position to be otherwise than stated in the trust deed.
Respondent: Individual transactions under the trust may be shams even if the trust itself is valid.

Court’s reasoning

Legal principles

01
[2003] JLR 188

A trust is not a sham unless both the settlor and trustee intend the true beneficial position to be otherwise than stated in the trust deed; common intention requires dishonesty.

Ratio, limits and disposition

Ratio decidendi

A trust is only a sham if both settlor and trustee have a dishonest common intention that the true beneficial position is other than as stated in the trust deed; individual transactions may be shams even if the trust is valid.

Court disposition

Trust not a sham; individual transactions may be shams.

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Judgment

[2003] JLR 188

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[2003] JLR 188

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