Jersey’s Hastings-Bass Legislation welcomed by Cavendish

There is welcome news for settlors, trustees, other fiduciaries and beneficiaries of Jersey trusts, following confirmation that the Jersey Courts have now passed the latest amendments to the Trusts (Jersey) Law 1984, codifying the Hastings-Bass principle relating to mistake.

The retrospective amendments include the following provisions:

• New article 47E confirms a transfer or disposition of property into a trust by a settlor (or someone acting on his behalf) may be voidable where the settlor has made a serious mistake of fact or law, including foreign law, and if he wouldn’t have made the transaction but for the mistake.

• New article 47F covers how a transfer or disposition of property into a trust by someone acting on behalf of a settlor in a fiduciary capacity may be voidable if the fiduciary took into account irrelevant considerations or failed to take into account relevant considerations. Crucially, it is no longer necessary for the fiduciary to be shown to have been at fault.

• New article 47G confirms that where a person makes a mistake when exercising a power in relation to the trust, it may be voidable if the person wouldn’t have exercised the power but for a mistake.

• New article 47H sets out how the exercise of a power relating to trust property by a trustee, or someone owning a fiduciary duty towards a beneficiary, may be voidable if the person took into account irrelevant considerations or didn’t take into account relevant considerations.

Commenting on the latest amendments, Cavendish Trust Managing Director James Cunningham-Davis said: “This demonstrates that Jersey is determined to remain a highly attractive and leading jurisdiction for trust business. The new provisions will save beneficiaries and trustees from needing to instigate claims in negligence or for breach of duty, together with all the associated uncertainty of success, the burden of costs, time and stress stemming from hostile litigation.”