Subject-Matter Index

Administration of trust assets. See Powers and duties of trustees—administration of trust assets

Application for directions. See Costs—indemnity. Powers and duties of trustees—application for directions

Application of foreign law. See Settlor—indemnity against English taxation. CONFLICT OF LAWS (Application of foreign law—foreign revenue law), (Application of foreign law—Jersey trusts law)

Appointment of Public Trustee. See Public Trustee—appointment

Assignment of beneficial interest. See Beneficiaries—transfer of interests in shares

Beddoe application

confidentiality

court not to give full reasons for decision to preserve confidentiality of Beddoe application—necessary to avoid prejudicing ultimate trial by revealing arguments, evidence, or judge’s conclusions, e.g. on merits—judge advising trustee in application not to participate in ultimate trial: Brown v. Orion Trust Ltd. (Royal Ct.), 2000–02 GLR 43

procedure

usual procedure that Beddoe application (a) determined in chambers not Ordinary Court, and (b) heard ex parte—court may, if appropriate, inform other parties of application and consider their written statements—sometimes appropriate for Ordinary Court to determine application, e.g. if factual matters to be decided: Brown v. Orion Trust Ltd. (Royal Ct.), 2000–02 GLR 43

Beneficiaries

assignment of beneficial interest. See Beneficiaries—transfer of interests in shares

excluded beneficiaries. See Beneficiaries—rights. Powers and duties of trustees—power to exclude beneficiary

loan from trust fund. See Powers and duties of trustees—loan to beneficiary

minor and unborn beneficiaries. See Variation—exercise of discretion

approval of settlement of litigation exercising trustees’ discretion—in deciding whether for benefit of beneficiaries, to construe “benefit” broadly, without limiting to financial matters, balancing favourable aspects of solution against unfavourable, and taking risk adult beneficiary would take on own behalf: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

powers and duties of trustees. See Powers and duties of trustees

prospective costs. See Costs—prospective costs

rights

disclosure by trustee

as matter of principle, beneficiary has right to ask trustees for information and documents about trust assets and administration—right of non-vested beneficiary arises from duty of trustees to account to beneficiaries, not proprietary right to documents sought—information not to be limited to state and amount at time of beneficiary’s request—may be required to create and compile fresh information: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

as matter of principle (independently of statutory right under Trusts (Guernsey) Law 1989, s.22(1)), beneficiary has right to ask trustees to disclose information and documents about trust assets and administration—right arises from duty of trustees to account to beneficiaries, not proprietary right to documents sought: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

court may grant beneficiary of main trust disclosure of terms of sub-trust under which not beneficiary to ensure assets properly administered and appointment made by trustee within its powers: H.W. Trust Co. Ltd. v. Cunningham (Royal Ct.), 2005–06 GLR 349

court may order disclosure to excluded beneficiaries of trust information or documents relating to periods when named beneficiary and when potential object of discretionary powers: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

excluded discretionary beneficiary not entitled to have documents delivered up, but right under customary law to inspect those in trustee’s possession or control: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

right of excluded discretionary beneficiary to inspect documents in trustee’s possession or control remains after 1989 Law, since not codification of entire law, but merely clarifies and removes uncertainty—in absence of clear provision to contrary, Law not presumed to remove existing rights: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

subject to statutory duties in Trusts (Guernsey) Law 1989, s.22, beneficiaries only entitled to disclosure of information by trustee if required by duty to secure proper administration of trust—improper failure to make disclosure gives beneficiaries right of action for breach of duty—disclosure not required of notice of investigation of beneficiaries’ fraud by H.M. Procureur if proper administration of trust not affected and would be offence of “tipping-off” under Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991, s.2A: A Ltd. v. H.M. Procureur (C.A.), 2003–04 GLR 593

under Trusts (Guernsey) Law 1989, s.22, no distinction between “information” and “documents”—compliance with duty to provide full and accurate information on state and amount of trust property may require production of existing documents or fresh information: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

under Trusts (Guernsey) Law 1989, s.22, trustee to disclose full and accurate information as to state and amount of trust property on beneficiary’s written request—information about destination of assets (e.g. transfer of trust’s main assets to sub-trust) outside ambit of s.22, but may be disclosed if applicant has sufficient connection and aims to ensure assets properly administered—court to consider whether disclosure in interest of beneficial class as whole: H.W. Trust Co. Ltd. v. Cunningham (Royal Ct.), 2005–06 GLR 349

under Trusts (Guernsey) Law 1989, s.22(1), beneficiaries’ right to trust information restricted to vested beneficiaries, but without prejudice to rights under terms of trust—under s.73(1), “terms of trust” written or oral terms and other terms applicable under proper law—“proper law” is Guernsey customary law, under which excluded discretionary beneficiary entitled to inspect trust information: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

disclosure of trust documents

no right to possession of original trust documents held by retiring protector but only to information as to contents: In re K Trust (Royal Ct.), 2015 GLR 433

indirectly held assets. See Liabilities of trustees—indirectly held assets

removal of trust protector

standing under Trusts (Guernsey) Law 2007, s.69(2) to apply for court to remove protector as “person connected with” trust, or to exercise power to remove fiduciary if appropriate: In re K Trust (Royal Ct.), 2015 GLR 433

right to be heard in respect of Beddoe application—beneficiaries entitled to be heard as to whether grounds to restrict extent of trustees’ Beddoe application for indemnity—court normally to canvass views of beneficiaries, but if cannot easily be done or if too costly, may instead seek views by ordering trustees to send out report and inviting responses: In re Tubuoh Trust (Royal Ct.), 2005–06 GLR N [2]

right to disclosure of accounts—under Trusts (Guernsey) Law 1989, s.22, beneficiaries have right on reasonable demand to disclosure of accounts by trustees—trustees not released from obligation merely because providing accounts difficult, but court may allow time to enable relevant information to be obtained and provided: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [27]

transfer of interests in shares. See Beneficiaries—transfer of interests in shares

under Trusts (Guernsey) Law 1989, s.4 and court’s inherent jurisdiction, court may supervise and intervene in matters relating to discretionary, terminated trusts, including ordering disclosure of trust information or documents to excluded beneficiary if appropriate: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

“share” in trust fund

“share” not term of art in trust law—trust provided that trustee to apply notional split of trust fund between settlor’s two daughters, whom settlor wished to benefit equally, and that, if daughter died without children, half of her share to go to mother and half to sister—one daughter died—no evidence that trustee had considered notional split but could be said to have notionally split fund as transferred money to daughters’ mother for their general benefit—alternatively, if notional split required juristic act or active intention, settlor could not have intended that, if no such act prior to daughter’s death, deceased daughter had no identifiable share: In re K Trust (C.A.), 2020 GLR 312

transfer of interests in shares

beneficial interest in shares effected by beneficial owner’s giving notice in writing to trustee—notice to be served on trustee shareholders—may be deemed properly served if, in accordance with company management agreement, delivered to offices of trustee company: Hitchins v. Hill (Royal Ct.), 2011–12 GLR 336

may be transferred by (i) declaring sub-trust of beneficial interest, (ii) lawfully assigning beneficial interest to transferee; (iii) lawfully assigning beneficial interest to trustee for transferee; or (iv) simple direction to trustee—for legal assignment, notice in writing may suffice, but wording to require direct transfer, not merely instruction to trustee to effect transfer: Hitchins v. Hill (Royal Ct.), 2011–12 GLR 336

“Blessing” of trustee’s decision. See Powers and duties of trustees—control by court

Bon père de famille. See Liabilities of trustees—exclusion of trustee’s liability. Powers and duties of trustees—duty to act in best interests of trust

Charitable trusts

declaration of status

Royal Court has power under Trusts (Guernsey) Law 1989 and customary law to grant declaration that trust is charitable: In re Insinger Trust (C.A.), 1997–99 GLR 265

legal advice

essential that for large bequest for charitable or public purposes, donor to take expert legal advice to ensure no premature failure of bequest—also desirable informally to consult representatives of intended beneficiary about intended wording: In re Foster Will Trust (Royal Ct.), 2003–04 GLR 71

role of partie publique

counsel representing general charitable interest of partie publique in litigation may be unable to advance positive case if prospective beneficiary not otherwise represented—role then limited to discussions with prospective beneficiary but may be able to make views known to court without advancing any special case: Red Cross (Intl. Cttee.) v. Thommessen (Royal Ct.), 2009–10 GLR 377

variation

under Trusts (Guernsey) Law 1989, s.55, court’s wide power to vary charitable or public purpose trust to be used with caution—donor’s intentions not to be set aside capriciously or without due cause—to consider scope of original intentions and other evidence pointing to appropriateness of variation, e.g. allowing bequest originally for upkeep and improvement of church to be used to improve parsonage house: In re Foster Will Trust (Royal Ct.), 2003–04 GLR 71

variation affecting all funds in will trust too soon after testator’s death (e.g. within 7 years) not appropriate—under Trusts (Guernsey) Law 1989, s.55, court may direct proportion of funds to be applied for varied purpose and remainder for original purposes, with proviso that applicant may return to court after specified time if no use arises for funds reserved for original purposes: In re Foster Will Trust (Royal Ct.), 2003–04 GLR 71

Claims by third parties. See CONFLICT OF LAWS (Trusts—limitation of trustees’ liability)

Confidentiality. See Powers and duties of trustees—duty of confidentiality

Conflict of interest. See Powers and duties of trustees—application for directions. Powers and duties of trustees—control by court. Supervision by court—exercise of discretion

Constructive trusts

advance to purchase property in name of another

competing equitable interests. See SECURITY INTERESTS (Priority—competing equitable interests)

inappropriate to apply doctrine of constructive trust in Guernsey if would cause hardship—doctrine derived from English equitable principles and not Norman law on which Guernsey land law based—hardship need only be merely contingent and not definite, e.g. potential hardship to property owner if mortgagee were to take saisie proceedings: Bougourd v. Woodhead (Royal Ct.), 2009–10 GLR 487

knowing receipt and dishonest assistance

knowing recipients and dishonest assisters liable to account as constructive trustees—not trustees for purposes of Trusts (Guernsey) Law 2007, s.76 and so subject to ordinary limitation period: Jefcoate v. Spread Trustee Co. Ltd. (Royal Ct.), 2013 GLR 220

Costs

advocate’s costs

on application for directions as to administration of trust, trustee, protector and advocate representing minor, unascertained and unborn beneficiaries entitled to reasonable costs of English lawyers: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

indemnity

allocation—costs of applications seeking guidance of court as to construction of trust instrument or other question of law arising from administration of trust usually treated as incurred for benefit of trust and paid out of it—where settlor established two trusts, one for spouse and other for child, cost of all parties of applications advanced for benefit of spouse’s trust borne by that trust: In re J and K Trusts (Royal Ct.), 2022 GLR 66

if court expressly makes no order as to costs, parties (including trustee) not entitled to indemnity and to bear own costs—only advocate appointed by court to represent minor, unascertained and unborn beneficiaries entitled to indemnity: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

invoice procedure

parties seeking indemnity out of trust to give details of costs incurred and work done so that other parties may decide whether to challenge reasonableness: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

on application for directions as to administration of trust, trustee entitled to indemnity for costs—advocate appointed by court to represent minor, unascertained and unborn beneficiaries and former trustees who had retained trust assets and continued to act as fiduciaries also entitled to indemnity—protector entitled to indemnity, as provided in trust deed: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

party with fiduciary functions in relation to trust (e.g. former trustees who had retained trust assets) entitled to indemnity for reasonable costs of exercising them—equates to trustee’s right to full reimbursement: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

trustee facing request to resign acted correctly in seeking and following legal advice—trustee of two trusts established by settlor, one to provide for spouse and other to provide for child, did not have unauthorized conflict of interest where required by trust instruments to pay 25% of one trust fund to other—trustee not deprived of remuneration or indemnity: In re J and K Trusts (Royal Ct.), 2022 GLR 66

trustee normally entitled to full indemnity from trust for reasonable costs and expenses—includes costs of application for directions as to administration of trust—no express order required and no question of taxation—only lost by misconduct: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

trustee not entitled to indemnity and may be ordered to pay other parties’ costs on indemnity basis if unreasonable conduct, e.g. wrongly bringing hostile claim in proceedings for directions: In re Tchenguiz Discretionary Trust (Royal Ct.), 2016 GLR 1

under Trusts (Jersey) Law 1984, art. 26(2), former trustees of Jersey trust administered in Guernsey have indemnity against current trustees for all expenses and liabilities reasonably incurred in connection with trust—reasonableness of expense determined at time occurred: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (P.C.), 2018 GLR 97

indemnity basis

all costs of work, research, inquiries, etc. necessary for making application, whenever incurred, properly considerable in taxation of full indemnity costs: Brown v. Orion Trust Ltd. (Royal Ct.), 2003–04 GLR N [16]

award may be on indemnity basis if trustee prolongs litigation opportunistically to obtain more favourable outcome against trust protector—ignoring dismissal by protector, attempting to remove protector, seeking costs, indemnity and security wider than allowed by law or terms of trust, unconscionable number of applications against litigant in person—may be ordered to pay costs of unjustified litigation on indemnity basis: Virani v. Guernsey Intl. Trustees Ltd. (C.A.), 2000–02 GLR 472

costs may be awarded on indemnity basis in special circumstances, e.g. if successful application by non-vested beneficiary properly raises question of Guernsey law, answer necessary for trust administration, affects all such beneficiaries, and would have justified application by trustee: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR N [19]

court normally to canvass views of beneficiaries, but if cannot easily be done or if too costly, may instead seek views by ordering trustees to send out report and inviting responses: In re Tubuoh Trust (Royal Ct.), 2005–06 GLR N [2]

court’s power under Trusts (Guernsey) Law 1989, s.65(4) to award costs out of trust property extends to awarding to beneficiary on full indemnity basis in appropriate, special circumstances: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR N [19]

former trustee ordered to pay costs of application for removal and appointment of replacement trustee—unreasonable for all directors of corporate trustee to resign, leaving trusts effectively paralysed, without retiring properly from trusteeships: X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 237

X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 1906

indemnity costs to be allowed if reasonable amount and reasonably incurred—doubts to be resolved in favour of receiving party: Brown v. Orion Trust Ltd. (Royal Ct.), 2003–04 GLR N [16]

legal advice obtained by trust company making application for individual trust is allowable item in taxation of indemnity costs—advice may be of lasting professional and commercial benefit to company and court may not attribute entire costs to individual trust application: Brown v. Orion Trust Ltd. (Royal Ct.), 2003–04 GLR N [16]

order of costs on indemnity basis against trustee personally if unreasonable conduct of litigation, e.g. making late interlocutory applications in attempt to derail appeal: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2016 GLR 128

under Trusts (Guernsey) Law 1989, s.65, court may award costs out of trust property to trustee or others applying on point of construction or administration—in case of others, application to be for benefit of estate and would have justified application by trustee—normal rules apply and no costs out of trust property if beneficiary’s application hostile and adverse to trustees or other beneficiaries: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (Royal Ct.), 2000–02 GLR 199

indemnity from trust fund

burden on objecting party to prove trustee not entitled to indemnity or claim unreasonable—trustee has benefit of doubt: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

costs of lawyers liaising with insurers recoverable in complex hostile litigation between trustee and trust/beneficiaries: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

costs of legal research by trustee’s lawyers recoverable in complex hostile litigation between trustee and trust/beneficiaries: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

court to consider whether instruction of relevant law firm or personnel reasonable in litigation between trustee and trust/beneficiaries, but not to consider in detail whether actual costs incurred by law firm unreasonable: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

failure to obtain Beddoe relief irrelevant to trustee’s right to indemnity in hostile litigation between trustee and trust/beneficiaries: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

no order as to costs in litigation between trustee and trust/beneficiaries does not deprive trustee of indemnity unless court order so provides: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

proportionality not relevant to former trustee’s right to indemnity in hostile litigation between trustee and trust/beneficiaries—court to consider if expenses reasonably incurred by trustee in defending its interests, by reference to reasonable hypothetical litigant in position of trustee: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

quantum—not affected by unsatisfied costs order in trustee’s favour or no order as to costs in previous proceedings—personal benefit to trustee from expenses or lack of benefit to trust not bar to indemnity if expenses reasonably incurred “in connection with” trust: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

trustee entitled to indemnity out of trust assets for reasonable costs, reasonably incurred in connection with trust—on Alhamrani assessment (i.e. determining dispute between beneficiary and trustee as to trustee’s claimed indemnity for expenditure), burden of proving unreasonableness on objecting party—trustee has benefit of any doubt: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2021 GLR 10

legal advice. See Costs—indemnity basis

liability of trustees. See Liabilities of trustees

prospective costs

no prospective costs order if court not aware whether prospective beneficiary intends to take passive or hostile stance in substantive proceedings—not to fetter final discretion to order costs unless satisfied that only proper exercise of discretion at end of proceedings is to award costs out of trust fund: Red Cross (Intl. Cttee.) v. Thommessen (Royal Ct.), 2009–10 GLR 377

Creation

certainty

express trust to demonstrate certainty of words showing intention of donor to create trust, certainty of subject-matter, and certainty of objects or persons to benefit—no specific form of words required: Bougourd v. Woodhead (Royal Ct.), 2009–10 GLR 487

declaration of trust

defendants granted summary judgment that declaration of trust unlawful and void under Companies (Guernsey) Law 2008, ss. 301–305—declaration of trust was “distribution” of company assets under s.301—no certificate of solvency, as required by s.303: JJW Hotels & Resorts Holding Inc. v. Rhodes (Royal Ct.), 2022 GLR 189

plaintiff’s application for summary judgment that declaration of trust valid dismissed—defendants raised issues as to declaration of trust which required investigation: JJW Hotels & Resorts Holding Inc. v. Rhodes (Royal Ct.), 2022 GLR 189

intention of donor

gift of money to children to buy bigger house, on condition that parents share occupation with them for life or otherwise agreed, satisfies Trusts (Guernsey) Law 2007, s.1(b) in not forming part of children’s estate, or being held only for their benefit: Bougourd v. Woodhead (Royal Ct.), 2009–10 GLR 487

preliminary acts creating trust

law governing validity of preliminary acts “launching” trust distinguished from law governing validity of trust itself—by art. 4, Recognition of Trusts Convention 1985 inapplicable to determining validity of preliminary acts: Dervan v. Concept Fiduciaries Ltd. (Royal Ct.), 2013 GLR 1

proper law governing validity of preliminary acts assigning assets to trust, e.g. whether settlor mistaken, depends on nature of assignment—assignment of shares governed by proper law of company, assignment of funds governed either by lex situs or by proper law of trust for which funds intended: Dervan v. Concept Fiduciaries Ltd. (Royal Ct.), 2013 GLR 1

Criminal abuse of trust. See CRIMINAL LAW (Abuse of trust—sentence)

Culpa lata dolo aequiparatur. See Liabilities of trustees—exclusion of trustee’s liability

Development of Guernsey law

mixed English and Guernsey customary principles

as in Scotland, Guernsey law of trusts before 1989 Law based on mixture of English statutory and Guernsey customary principles—Scottish reliance on culpa lata dolo aequiparatur consistent with Guernsey common law duty to act en bon père de famille—exclusion of trustees’ liability for negligence or fraud never permitted: Spread Trustee Co. Ltd. v. Hutcheson (C.A.), 2009–10 GLR 403

development of Guernsey trusts law dependent on English model, rather than Scots law—exclusion of trustee’s liability for gross negligence permitted (prior to change by Trusts (Amendment) (Guernsey) Law 1990, s.1(f)) as based on interpretation of English model: Spread Trustee Co. Ltd. v. Hutcheson (P.C.), 2011–12 GLR 164

English concept of trust long recognized and adopted in Guernsey—Guernsey trusts law mirrors English trusts law in so far as compatible with Guernsey statutory and customary law—allows both vested and non-vested discretionary beneficiaries to inspect trust documents: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

Disclosure of trust documents/information. See Beneficiaries—rights. Powers and duties of trustees—application for directions. Powers and duties of trustees—duty of confidentiality. Powers and duties of trustees—duty to give information to beneficiaries. Powers of court—supervisory jurisdiction

Discretionary trusts

disclosure of information. See Discretionary trusts—object of discretionary trust. Powers and duties of trustees—duty to give information to beneficiaries

object of discretionary trust

in determining whether to order disclosure to non-vested beneficiary, court to consider all circumstances—may be highly relevant for non-vested beneficiary to have access to information, e.g. since size of fund may determine how assets appointed: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

under Trusts (Guernsey) Law 1989, s.22(1), beneficiaries’ right to trust information restricted to vested beneficiaries, but without prejudice to rights under terms of trust—under s.73(1), “terms of trust” written or oral terms and other terms applicable under proper law—“proper law” is Guernsey customary law, under which discretionary beneficiary not irrevocably excluded entitled to inspect trust information: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

Distribution of trust property

exercise of discretion. See Powers and duties of trustees—exercise of discretion

liability to foreign income tax. See Powers and duties of trustees—exercise of discretion

Duty of confidentiality. See Powers and duties of trustees—duty of confidentiality

Duty to act in best interests of trust. See Powers and duties of trustees—duty to act in best interests of trust

Duty to give information to beneficiaries. See Beneficiaries—rights. Powers and duties of trustees—duty to give information to beneficiaries

Excluded beneficiaries. See Beneficiaries—rights. Discretionary trusts. Discretionary trusts—object of discretionary trust. Powers and duties of trustees—duty to give information to beneficiaries. Powers and duties of trustees—power to exclude beneficiary. Supervision by court—inherent jurisdiction

Exclusion of trustee’s liability. See Liabilities of trustees—exclusion of trustee’s liability

Exercise of discretion. See Powers and duties of trustees—exercise of discretion. Supervision by court—exercise of discretion. Variation—exercise of discretion

Forum conveniens. See Powers and duties of trustees—application for directions. CONFLICT OF LAWS (Jurisdiction—forum conveniens)

Funded unapproved retirement benefits scheme

nature of trustee’s duties

trustee of FURBS does not have discretion of trustee of ordinary discretionary trust—required to arrange payment of pension or provision of lump sum—submission to jurisdiction of English High Court in matrimonial proceedings involving beneficiary sanctioned, as desirable to explain terms on which assets held: In re A Ltd. FURBS (Royal Ct.), 2017 GLR N [7]

Gross negligence

exclusion of trustee’s liability. See Liabilities of trustees—exclusion of trustee’s liability

Hastings-Bass application. See Powers and duties of trustees—exercise of discretion

Hearing in private. See Powers and duties of trustees—application for directions. Supervision by court—exercise of discretion

In personam order against trustee. See Powers and duties of trustees—control by court

Incorrect advice to settlor/trustee. See Mistake—incorrect legal advice to settlor. Powers and duties of trustees—exercise of discretion

Indemnity as to costs. See Costs—indemnity

Indemnity costs. See Costs—indemnity basis

Indemnity from trust fund. See Costs—indemnity from trust fund

Indemnity of trustees. See Rights of trustees—indemnity from trust assets

Indirectly held assets. See Liabilities of trustees—indirectly held assets

Insolvent trusts. See Remuneration of trustees—assessment of reasonableness

priority of claims to trust assets

as between trustee and creditors claiming by way of subrogation, trustee takes priority: ITG Ltd. v. Glenalla Properties Ltd. (C.A.), 2020 GLR 158

as between trustee and creditors claiming by way of subrogation, trustee takes priority and then pari passu distribution among creditors: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2019 GLR 335

claims to indemnity by former and current trustees of Jersey trust (whether for personal liability incurred in connection with trust or claims of creditors by way of subrogation) rank in order of creation of equitable liens: ITG Ltd. v. Glenalla Properties Ltd. (C.A.), 2020 GLR 158

claims to indemnity by former and current trustees (whether for personal liability incurred in connection with trust or claims of creditors by way of subrogation) rank in order of creation of equitable liens—not pari passu: ITG Ltd. v. Glenalla Properties Ltd. (Royal Ct.), 2019 GLR 335

claims to indemnity by former and successor trustees rank pari passu, not in order of creation of equitable liens: ITG Ltd. v. Fort Trustees Ltd. (P.C.), 2022 GLR 260

Interpretation

principles

court to ascertain meaning trust document conveys to reasonable person with knowledge of factual matrix at time of execution—factual matrix includes everything affecting understanding of document, including contemporaneously executed deeds, except evidence of subjective intention, drafts, negotiations or other extrinsic material—words given normal meaning unless counter to presumed intention, when words interpreted as executor intended to use them: In re C Trust (Royal Ct.), 2013 GLR 105

court to ascertain presumed intention of maker of document from words used, construed against factual matrix at time of execution—factual matrix includes everything contemporaneous affecting understanding of document—excludes evidence of subjective intention, drafts, negotiations or other extrinsic material—words given ordinary meaning unless consideration of document points to different conclusion: In re K Trust (C.A.), 2020 GLR 312

Law applicable

guidance from English law

authoritative statement of trusts law in England and Wales by higher court, even if not binding, to be treated as persuasive guidance by Guernsey courts, subject to Guernsey law or other local features: A Ltd. v. H.M. Procureur (C.A.), 2003–04 GLR 593

Legal proceedings

categories of trust disputes

three recognizable categories of trust disputes giving rise to claims for costs—(a) dispute as to trusts on which trustees hold trust assets; (b) dispute between beneficiary and trustee as to propriety of trustee’s action; and (c) trustee’s dispute with non-beneficiary third party regarding rights and liabilities assumed by trustee in administration of trust—trustee normally entitled to costs out of estate but not if actions amount to misconduct, or incurred defending himself against beneficiaries: Green v. Torode (Royal Ct.), 2015 GLR N [8]

Liabilities of trust company directors. See Trust companies—liability of directors

Liabilities of trustees

duties of professional trustee companies. See Liabilities of trustees—exclusion of trustee’s liability

exclusion of trustee’s liability

1990 addition of “gross negligence” to categories in Trusts (Guernsey) Law 1989, s.34(7) for which trustee’s liability cannot be excluded applies retrospectively—statement of trustee’s liability for gross negligence declaratory of law existing before 1989: Hutcheson v. Spread Trustee Co. Ltd. (Royal Ct.), 2009–10 GLR 197

duty of professional trustee company to conduct business with greater skill and care than ordinary prudent man—professional company would not exclude liability for ordinary professional negligence and incompatible to exclude liability for gross negligence: Hutcheson v. Spread Trustee Co. Ltd. (Royal Ct.), 2009–10 GLR 197

gross negligence

court entitled to find that, on creation of new family trust into which share of family assets to be transferred, trustee not grossly negligent to accept transfer of assets and accompanying liabilities—also entitled to find that trustee’s subsequent failure to extinguish liabilities not unreasonable as would have required creditor’s consent, which court considered unlikely, and been complex and time consuming—party cannot raise, on appeal, new suggestion that liabilities should have been transferred to company wholly owned by trustees: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2015 GLR 300

serious allegation must be properly pleaded, i.e. trustee entitled to know with precision: extent of duty said to have been breached; how it was breached; what should have been done instead; why breach was gross; and how breach gave rise to loss: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2015 GLR 300

serious or flagrant degree of negligence, not equating to reckless or intentional fault: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2015 GLR 300

Guernsey trusts law always permitted exclusion of liability for gross negligence—historically reliant on English not Scots trusts law—not affected by phrasing of Trusts (Guernsey) Law 1989, s.34(7) and no retrospective effect given to 1990 addition of “gross negligence” to categories in s.34(7) for which trustee’s liability cannot be excluded: Spread Trustee Co. Ltd. v. Hutcheson (P.C.), 2011–12 GLR 164

omission of “or gross negligence” from Trusts (Guernsey) Law 1989, s.34(7) not mistake but deliberate, since trustee always able in Guernsey law to exclude liability for gross negligence—no retrospectivity given to addition of “or gross negligence” to categories in s.34(7) for which trustee’s liability cannot be excluded: Spread Trustee Co. Ltd. v. Hutcheson (P.C.), 2011–12 GLR 164

omission of “or gross negligence” from Trusts (Guernsey) Law 1989, s.34(7) probably mistake, since trustee never able in Guernsey customary law to exclude liability for acts of gross negligence—Trusts (Guernsey) (Amendment) Law 1990, s.1(f) declaratory of existing law, therefore no question of retrospectivity in addition of “or gross negligence” to s.34(7): Spread Trustee Co. Ltd. v. Hutcheson (C.A.), 2009–10 GLR 403

Scottish reliance on culpa lata dolo aequiparatur consistent with Guernsey common law duty to act en bon père de famille—prohibition in Trusts (Guernsey) Law 1989 on excluding trustees’ liability for fraud includes gross negligence as equivalent to, or species of, fraud: Spread Trustee Co. Ltd. v. Hutcheson (C.A.), 2009–10 GLR 403

“wilful misconduct” in Trusts (Guernsey) Law 2007, s.39(7)(a) explained: Zaleski v. GM Trustees Ltd. (Royal Ct.), 2015 GLR N [7]

gross negligence. See Liabilities of trustees—exclusion of trustee’s liability

indemnity. See Settlor—indemnity against English taxation

as between trustee and creditors claiming by way of subrogation, trustee takes priority: ITG Ltd. v. Glenalla Properties Ltd. (C.A.), 2020 GLR 158

claims to indemnity by former and current trustees (whether for personal liability incurred in connection with trust or claims of creditors by way of subrogation) rank in order of creation of equitable liens: ITG Ltd. v. Glenalla Properties Ltd. (C.A.), 2020 GLR 158

claims to indemnity by former and successor trustees rank pari passu, not in order of creation of equitable liens: ITG Ltd. v. Fort Trustees Ltd. (P.C.), 2022 GLR 260

right of indemnity confers on trustee proprietary interest in trust assets—proprietary interest survives transfer of trust assets to successor trustee: ITG Ltd. v. Fort Trustees Ltd. (P.C.), 2022 GLR 260

right of indemnity extends to trustee’s costs of proving its claim against trust where trust “insolvent”: ITG Ltd. v. Fort Trustees Ltd. (P.C.), 2022 GLR 260

indirectly held assets

where trust devalued by reduction in share value due to trustee’s mismanagement of company, beneficiary not barred from suing for breach of trust by reflective loss principle (i.e. that shareholder with recognized good claim unable to make direct recovery from defendant if loss merely reflection of company’s loss)—claim against trustee substantially different from claim under derivative action: Jefcoate v. Spread Trustee Co. Ltd. (Royal Ct.), 2014 GLR N [10]

liability to account. See Constructive trusts—knowing receipt and dishonest assistance

liability to pay costs

in trust administered in Guernsey but governed by Jersey law, by Trusts (Jersey) Law 1984, art. 32(1)(a) trustee’s liability for costs of litigation in which defended trust assets limited to trust property: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2016 GLR 128

obliged to pay legal costs incurred in defending interests of trust, though can make Beddoe application for indemnity out of trust funds—court always seeks to protect innocent trustee from unjustified attack and unnecessary expenditure in furtherance of disputes—trustees have duty to consider carefully any step likely to diminish trust funds by incurring substantial legal expenses: In re Tubuoh Trust (Royal Ct.), 2005–06 GLR N [2]

personal liability exceptional—order of costs on indemnity basis against trustee personally if unreasonable conduct of litigation, e.g. making late interlocutory applications in attempt to derail appeal: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2016 GLR 128

limitation of liability

if trust administered in Guernsey but governed by Jersey law, Trusts (Jersey) Law 1984, art. 32(1)(a) creates distinction between trustee’s personal and fiduciary capacities—no recourse to trustee’s personal assets if creditor knows it deals with trustee in that capacity—does not modify rule that creditor may not access trust assets directly—must be subrogated to trustee’s right of indemnity: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (P.C.), 2018 GLR 97

in trust administered in Guernsey but governed by Jersey law, by Trusts (Jersey) Law 1984, art. 32(1)(a) original trustee’s liability to third party limited to “trust property” in trust at time of claim—trust property disposed of before claim (e.g. by transfer to replacement trustee) not therefore available to satisfy claim—original trustee has right to indemnity from replacement trustee for balance remaining due only to extent of “trust property” now held by replacement trustee: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

Trusts (Jersey) Law 1984, art. 32(1)(a) applies in Guernsey to limit liability of trustee for debts of trust if trust governed by Jersey law—relevant law determined by proper law of entity rather than proper law of obligation—common law recognizes limitation of liability arising under entity’s constitutive law by reason of status or capacity in which members or officers assume obligation: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (P.C.), 2018 GLR 97

limitation of liability to third parties. See CONFLICT OF LAWS (Trusts—limitation of trustees’ liability)

personal liability

fundamental principle under general law that trustee entering transaction with third party has personal liability to meet obligations to third party—may be entitled to indemnity from trust assets unless in default in duties as trustee—third party obtaining unsatisfied judgment against trustee entitled to be subrogated to trustee’s right to indemnity: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

in trust administered in Guernsey but governed by Jersey law, when third party entering transaction with trustee ignorant of status of trustee, trustee loses protection of Trusts (Jersey) Law 1984, art. 32(1)(a) and then has personal liability under art. 32(1)(b)—may possibly be extended to situation in which third party knows contracting with trustee but also knows trustee has no power to enter into transaction in question: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

in trust administered in Guernsey but governed by Jersey law, when third party entering transaction with trustee knows trustee “acting as trustee,” by Trusts (Jersey) Law 1984, art. 32(1)(a) third party may only claim “against the trustee as trustee” and claim limited “only to the trust property”—trustee’s personal liability thereby excluded: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

security for liabilities

under Trusts (Guernsey) Law 1989, s.39(1)(a), removed trustee transferring trust property to new trustee may apply for order requiring “reasonable security for liabilities” before surrendering trust property: Virani v. Guernsey Intl. Trustees Ltd. (C.A.), 2000–02 GLR 472

subrogation to trustee’s right to indemnity. See Liabilities of trustees—personal liability

Limitation of trustee’s liability. See Liabilities of trustees—limitation of liability

Loan to beneficiary. See Powers and duties of trustees—loan to beneficiary

Mistake

discretion of court

court has equitable jurisdiction to rescind trust or transfer of property to trust where causative mistake of sufficient gravity—not exercised where no causative mistake in establishment of trust or transfer of property to trust but mere error in drafting, i.e. failure to exclude applicant from benefit: Hannah v. Marlborough Trust Co. Ltd. (Royal Ct.), 2023 GLR 160

English law allows court to set trust aside if created under fundamental mistake as to effect (not consequences) of provisions and settlor would not have created trust had known true effect—not necessary to consider applying more liberal English test in Guernsey if narrower one sufficient to meet needs of case: In re Arun Estate Agencies Ltd. Employee Benefit Trust (Royal Ct.), 2009–10 GLR 437

incorrect legal advice to settlor

creation of trust. See Creation—preliminary acts creating trust

settlor of English trust entitled (under English Taxation of Chargable Gains Act 1992, Schedule 5, para. 6(2)) to indemnity from Guernsey trustee for capital gains tax paid following incorrect legal advice given to trustee—rule against direct or indirect enforcement of foreign revenue claims not applicable: Kleinwort Benson (Guernsey) Trustees Ltd. v. Wilson (Royal Ct.), 2000–02 GLR 509

setting aside trust

imposing conditions—Jurats may be legitimately concerned about consequences of setting aside for named beneficiaries but not allowed to impose conditions on setting aside trust governed by English law: Arun Estate Agencies Ltd. Employee Benefit Trust, In re (Royal Ct.), 2009–10 GLR 437

Partie publique. See Charitable trusts—role of partie publique

Powers and duties of trustees

administration of trust assets

notwithstanding dispute in foreign jurisdiction concerning validity of disposal of foreign trust assets, under Trusts (Guernsey) Law 2007, ss. 3 and 4, Royal Court has jurisdiction over trust if governed by Guernsey law, trust assets in Guernsey and Guernsey-resident trustee—may make declarations concerning validity of appointment of trustees, holding of trust assets and disposal of foreign assets: Rothschild Trust Guernsey Ltd. v. Pateras (Royal Ct.), 2011–12 GLR 239

proceeds of criminal conduct—if trust assets effectively frozen because trustee suspects proceeds of crime and law enforcement refuses consent to transfer, beneficiary may challenge trustee’s refusal to release funds—trustee to prove on balance of probabilities holds requisite suspicion, beneficiary to prove provenance of funds: Liang v. RBC Trustees (Guernsey) Ltd. (Royal Ct.), 2018 GLR 189

under Trusts (Guernsey) Law 2007, s.26, trustee has all powers of beneficial owner in relation to trust property, subject to terms of trust, including investment management and sale—terms may legitimately give wider powers, e.g. delegating power to agents to sell trust property: Rothschild Trust Guernsey Ltd. v. Pateras (Royal Ct.), 2011–12 GLR 239

when interests in trust assets uncertain, legitimate exercise of trustees’ discretion to explore refinancing of assets subject to loans—may consider collective interests of all persons interested (actually or potentially) in assets, even though interests of creditors not given primacy—may properly canvass views of creditors but not determinative: In re F (C.A.), 2013 GLR 388

application for directions

application to surrender discretion to court appropriate if seeks court’s approval of settlement of trustee’s hostile litigation with beneficiaries—trustee then has conflict of interest in which difficult for it to be neutral, especially if minor or unborn beneficiaries involved: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

application to surrender discretion to court appropriate if trustee of unit trust faced with conflict of interest, e.g. situation requires favouring one group of investors over another and risk of trustee perceived to be acting in own interests—court to adopt course of action achieving balance of fairness between conflicting interests—has no greater powers than trustee but to be guided by need to do best for trust estate: In re Arasbridge Unit Trust (Royal Ct.), 2015 GLR 72

application to surrender discretion to court imposes heavy duty on affected parties to make full and frank disclosure of all matters relevant to court’s decision: In re Arasbridge Unit Trust (Royal Ct.), 2015 GLR 72

application to surrender discretion to court usually heard in private—must be heard in private if concerns terms of settlement expressed to be confidential—court may increase confidentiality by anonymizing parties’ names: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

constitution of court—although under Trusts (Guernsey) Law 2007, s.79, Bailiff enabled to sit alone in determining matters under Law, under Royal Court Reform (Guernsey) Law 2008, ss. 14 and 16 may retire with Jurats—if court exercising supervisory jurisdiction over trust, even though no surrender of discretion by trustee, decision will involve exercise of court’s discretion to decide what just and reasonable, and therefore to be expected that Jurats will sit more often than not: In re NAO Settlement (Royal Ct.), 2011–12 GLR N [4]

costs. See Costs—indemnity

court has sufficient statutory jurisdiction under Trusts (Guernsey) Law 2007, ss. 68–69 to exercise trustee’s discretion if agrees to accept surrender to it—no need to invoke inherent jurisdiction: In re Arasbridge Unit Trust (Royal Ct.), 2015 GLR 72

directions to be given under Trusts (Guernsey) Law 1989, s.62 if trustee unable to decide requires court’s assistance—applying for assistance not merely approval of decision already taken: Kleinwort Benson (Guernsey) Trustees Ltd. v. Wilson (Royal Ct.), 2000–02 GLR 509

if trustee seeks court’s approval for proposed decision within agreed scope of powers, even if no surrender of discretion, trustee to make full disclosure of all relevant information: Thommessen v. Butterfield Trust (Guernsey) Ltd. (Royal Ct.), 2009–10 GLR 102

if trustee’s action or proposed action challenged as outside powers or improper exercise of powers, no obligation to make full disclosure but challenge to be heard as fully contested proceedings in court: Thommessen v. Butterfield Trust (Guernsey) Ltd. (Royal Ct.), 2009–10 GLR 102

may apply for directions under Trusts (Guernsey) Law 2007, ss. 68 or 69 for exercise of court’s supervisory jurisdiction whenever they think necessary—applications of four main types—(1) application to determine scope of duty or power; (2) application for “blessing” by court of “momentous” decision trustees propose to make; (3) application to surrender discretion to court with regard to making of decision; and (4) application to determine whether duty properly discharged or power properly exercised: In re F (C.A.), 2013 GLR 388

may apply under Trusts (Guernsey) Law 1989, s.62 for approval of court for decision already taken on exercise of discretion under trust deed—appropriate if decision of “momentous nature” substantially affecting trust assets—court to be satisfied that lawful exercise of trustee’s powers and one that ordinary, reasonable and prudent trustee, properly directed, could properly take: In re V Settlement (Royal Ct.), 2007–08 GLR 240

need for trustee to have easy access to Royal Court for directions on effective administration of Guernsey trust important factor in refusing stay on ground of forum non conveniens: In re A & MC Trust (Royal Ct.), 2007–08 GLR N [8]

surrender of discretion to court. See Powers and duties of trustees—application for directions. Supervision by court—exercise of discretion

control by court

application by trustees for court’s blessing of proposed “momentous” decision not exception to “without prejudice” privilege: In re R Trusts (Royal Ct.), 2017 GLR 381

beneficiary challenging trustees’ application for court’s blessing of proposed “momentous” decision to separate beneficiaries’ interests not estopped from asserting privilege in “without prejudice” communications concerning proposed division: In re R Trusts (Royal Ct.), 2017 GLR 381

blessing by court of trustees’ proposed “momentous” decision—“without prejudice” privilege applies where beneficiary challenging trustees’ application for blessing of decision to separate beneficiaries’ interests—privilege in “without prejudice” communications concerning proposed division: In re R Trusts (Royal Ct.), 2017 GLR 381

“blessing” by court under Trusts (Guernsey) Law 2007, s.69 of trustees’ proposed “momentous” decision gives court no discretion of its own–-limited to making declaration that trustees’ proposal lawful and takes account of all relevant matters—in other cases in which trustees surrender discretion to court, court then exercises their discretion as would reasonable trustees in all circumstances In re F (C.A.), 2013 GLR 388

having accepted trustee’s surrender of discretion, court may choose not to exercise it as if trustee, if unrealistic to do so—if asked to approve settlement of litigation between trustee and beneficiaries, may consider whether settlement agreement is appropriate compromise and suitability of other alternatives: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

if court exercising supervisory jurisdiction over trust, even though no surrender of discretion by trustee, decision normally involves exercise of court’s discretion to decide whether granting application just and reasonable—although under Trusts (Guernsey) Law 2007, s.79, Bailiff enabled to sit alone, issue of discretion calls for sitting of Jurats more often than not: In re NAO Settlement (Royal Ct.), 2011–12 GLR N [4]

no power to make in personam order against Guernsey-resident trustee requiring him to apply restraint order to trust property outside territorial limits of Guernsey envisaged by Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999, Part I: King v. H.M. Procureur (Royal Ct.), 2011–12 GLR 285

trustee’s application to surrender discretion to court appropriate if seeks court’s approval of settlement of trustee’s hostile litigation with beneficiaries—trustee then has conflict of interest in which difficult for it to be neutral, especially if minor or unborn beneficiaries involved: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

delegation of powers

trustee may delegate power to agent, e.g. to sell property—to ensure that delegation complies with Guernsey law and terms of trust—foreign agent to comply with Guernsey law and terms of trust, as well as law of foreign jurisdiction: Rothschild Trust Guernsey Ltd. v. Pateras (Royal Ct.), 2011–12 GLR 239

duty of confidentiality

court may order disclosure of letters of wishes on application by non-vested discretionary beneficiary, as not within list of documents under Trusts (Guernsey) Law 1989, s.33—since settlors rightly expect high degree of confidentiality, court may order disclosure solely to applicant’s advocates: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

duty arises when confidential information comes to knowledge of person in circumstances in which has notice or held to agree that information confidential and just, in all the circumstances, to preclude disclosure—no duty of confidentiality if information generally accessible, useless or trivial, or public interest in confidentiality outweighed by public interest in disclosure: In re B (C.A.), 2011–12 GLR 694

duty cannot be expressed by reference to particular classes of documents, so that some classes confidential and others not—documents to be considered on individual merits and circumstances of case: In re B (C.A.), 2011–12 GLR 694

duty of confidentiality limited if (a) disclosure made under compulsion by law; (b) duty to public to disclose; (c) disclosure in interests of trust; and (d) disclosure made by express or implied consent of beneficiary: In re B (C.A.), 2011–12 GLR 694

if disclosure not required to establish whether assets distributed in accordance with terms of trust, trustee may regard requests and deliberations concerning distribution as confidential, but not obliged to do so and may disclose information to beneficiary: H.W. Trust Co. Ltd. v. Cunningham (Royal Ct.), 2005–06 GLR 349

notwithstanding duty of confidentiality, trust information may be disclosed, to extent reasonably necessary, to protect trustee’s interests, including if silence in response to foreign court order likely to expose to real risk of penal consequences—court to evaluate nature, scope, quality and effect of foreign order and balance interests of trustee and beneficiaries, as well as consider broader public interest: In re B (C.A.), 2011–12 GLR 694

duty to act in best interests of beneficiaries

failure of trust company to consider whether in interests of beneficiaries to take out universal life insurance policy and associated financing arrangements, and to maintain policy and financial arrangements despite poor performance, negligent—in particular circumstances, not grossly negligent or fraudulent—no loss caused because, if queried, arrangements would have been confirmed: Kazzaz v. Standard Chartered Trust (Guernsey) Ltd. (Royal Ct.), 2023 GLR 223

duty to act in best interests of trust

Scottish reliance on culpa lata dolo aequiparatur consistent with duty to act en bon père de famille—prohibition in Trusts (Guernsey) Law 1989 on excluding trustees’ liability for fraud includes gross negligence as equivalent to, or species of, fraud: Spread Trustee Co. Ltd. v. Hutcheson (C.A.), 2009–10 GLR 403

under Trusts (Guernsey) Law 1989, s.18(1), trustee to act en bon père de famille—inconceivable that acting with gross negligence compatible with acting en bon père de famille: Hutcheson v. Spread Trustee. Co. Ltd. (Royal Ct.), 2009–10 GLR 197

duty to exercise judgment

decision to liquidate insurance investments if insurer’s fees become not “substantially competitive as judged by trustee” requires exercise of trustee’s subjective judgment—since not objective question, no need for expert witnesses as to relevant state of market at time exercises judgment: Woodbourne Trustees Ltd. v. Generali Worldwide Ins. Co. Ltd. (Royal Ct.), 2009–10 GLR 131

duty to give information to beneficiaries

although Trusts (Guernsey) Law 1989, s.22 requirement to provide full and accurate information about trust property applies only to vested beneficiaries, s.74(2) permits court to make order independently of other provisions in 1989 Law: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

as matter of principle (independently of statutory right under Trusts (Guernsey) Law 1989, s.22(1)), beneficiary has right to ask trustees for information and documents about trust assets and administration—right arises from duty of trustees to account to beneficiaries, not proprietary right to documents sought—information not to be limited to state and amount at time of beneficiary’s request: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

court may supervise and intervene in matters relating to discretionary, terminated trusts, including ordering disclosure of trust information or documents to excluded beneficiary if appropriate: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

may be ordered to disclose to beneficiary of main trust terms of sub-trust under which not beneficiary if required to establish that appointment made by trustee within its powers: H.W. Trust Co. Ltd. v. Cunningham (Royal Ct.), 2005–06 GLR 349

subject to statutory duties in Trusts (Guernsey) Law 1989, s.22, need only disclose information to beneficiaries if required by duty to secure proper administration of trust—improper failure to make disclosure gives beneficiaries right of action for breach of duty by trustee—disclosure not required of notice of investigation of beneficiaries’ fraud by H.M. Procureur if proper administration of trust not affected and would be offence of “tipping-off” under Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991, s.2A: A Ltd. v. H.M. Procureur (C.A.), 2003–04 GLR 593

trustees have duty under Trusts (Guernsey) Law 1989, ss. 21–22 to keep adequate trust accounts and supply copies to beneficiaries on reasonable demand—not released from obligation merely because providing accounts difficult, but court may allow time to enable relevant information to be obtained and provided: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [27]

Trusts (Guernsey) Law 1989 not codification, but to be construed as consistent with English trusts law—in s.22, no distinction between disclosure of information and trust documents themselves—compliance with s.22 duty to provide full and accurate information to beneficiaries about state and amount of trust property may require disclosure of both documents and information: Bathurst v. Kleinwort Benson (Channel Islands) Trustees Ltd. (Royal Ct.), 2003–04 GLR N [32]

under Trusts (Guernsey) Law 1989, s.22, trustee to disclose full and accurate information as to state and amount of trust property if beneficiary requests in writing—information about destination of assets (e.g. transfer of trust’s main assets to sub-trust) outside ambit of s.22, though disclosure may be ordered to ensure assets properly administered—court to consider whether disclosure in interest of beneficial class as whole: H.W. Trust Co. Ltd. v. Cunningham (Royal Ct.), 2005–06 GLR 349

under Trusts (Guernsey) Law 1989, s.22(1), right to trust information restricted to vested beneficiaries, but without prejudice to rights under terms of trust—under s.73(1), “terms of trust” written or oral terms and other terms applicable under proper law—“proper law” is Guernsey customary law, under which excluded discretionary beneficiary entitled to inspect trust information: Stuart-Hutcheson v. Spread Trustee Co. Ltd. (C.A.), 2000–02 GLR 388

duty to provide accounts. See Trust accounts—duty to provide accounts

duty to secure proper administration of trust

duty to secure proper administration of trust may, in addition to statutory duties in Trusts (Guernsey) Law 1989, s.22, require disclosure of information to beneficiaries—disclosure not required of notice of investigation of beneficiaries’ fraud by H.M. Procureur if proper administration of trust not affected and would be offence of “tipping-off” under Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991, s.2A: A Ltd. v. H.M. Procureur (C.A.), 2003–04 GLR 593

exercise of discretion

joinder of HMRC to Hastings-Bass application may be allowed if asking court to resolve issue which might affect right to enforce tax legislation in UK (e.g. if UK tax liability may arise following exercise of trustee’s discretion), no resulting indirect enforcement of UK tax law in Guernsey and HMRC not raising defence in order to assert tax collection right: H.M. Revenue & Customs v. Gresh (C.A.), 2009–10 GLR 239

no defendant required to Hastings-Bass application—applicant to make full, frank disclosure of all relevant evidence—if no factual uncertainties, court may assume inquisitorial role in deciding whether discretion improperly exercised: Gresh v. RBC Trust Co. (Guernsey) Ltd. (Royal Ct.), 2009–10 GLR 216

no joinder of HMRC to Hastings-Bass proceedings if intends not to be bound by Guernsey judgment if joinder refused—comity requires that HMRC respects Guernsey Royal Court judgment as judgment of court of competent jurisdiction: Gresh v. RBC Trust Co. (Guernsey) Ltd. (Royal Ct.), 2009–10 GLR 216

no joinder of HMRC to Hastings-Bass proceedings (if UK tax liability may arise because trustee’s discretion exercised on incorrect advice)—joinder may result in inappropriate indirect enforcement of UK tax law: Gresh v. RBC Trust Co. (Guernsey) Ltd. (Royal Ct.), 2009–10 GLR 216

no joinder of HMRC to Hastings-Bass proceedings (if UK tax liability may arise because trustee’s discretion exercised on incorrect advice)—not same issue in two different proceedings as required by Royal Court Civil Rules 2007, r.37(1)(b)(ii)—joinder not “just and convenient” if separate, unconnected issues, different systems of law govern different proceedings, or if HMRC can make submissions without joinder: Gresh v. RBC Trust Co. (Guernsey) Ltd. (Royal Ct.), 2009–10 GLR 216

trustee’s implementation of transaction initiated by beneficiary whereby beneficiary’s shares in companies owning real property transferred to trustee to repay loan from trust, giving rise to significant personal income tax liability for applicant, not set aside—not unconscionable for transaction to stand—no effect on interests of beneficiaries qua beneficiaries—applicant acted on own incorrect tax advice—other potential remedies available: M v. St. Anne’s Trustees Ltd. (Royal Ct.), 2018 GLR 1

two-stage approach before setting aside transaction pursuant to Hastings-Bass jurisdiction: (1) applicant establishes relevant breach of duty by trustee; (2) court exercises discretion to set aside transaction if unconscionable for it to stand: M v. St. Anne’s Trustees Ltd. (Royal Ct.), 2018 GLR 1

under Royal Court Civil Rules 2007, r.37, joinder of HMRC to Hastings-Bass application may be allowed if issue between HMRC and party “related to” or “connected with” Hastings-Bass proceedings (e.g. if UK tax liability may arise following exercise of trustee’s discretion)—HMRC’s interest to be contingent and directly related to subject-matter of Hastings-Bass application: H.M. Revenue & Customs v. Gresh (C.A.), 2009–10 GLR 239

under Royal Court Civil Rules 2007, r.37, joinder of HMRC to Hastings-Bass application may be allowed if just and convenient—may be just and convenient if avoids re-litigation of same issue (e.g. determining whether UK tax liability arises following exercise of trustee’s discretion) in UK, saves time and costs, allows testing of factual evidence and HMRC of valuable assistance to court: H.M. Revenue & Customs v. Gresh (C.A.), 2009–10 GLR 239

indemnity costs. See Costs—indemnity basis

loan to beneficiary

if express power to make loan to beneficiary, trustee may apply under Trusts (Guernsey) Law 1989, s.62 for court’s approval of proposed details—may approve small loan from large trust fund to pay bills of legal advisers for interpreting and contesting deeds of appointment made under trust, thus avoiding bankruptcy and threat to capital assets: In re V Settlement (Royal Ct.), 2007–08 GLR 240

pleading

striking out—no striking out merely because pleading appears to contain unnecessary matter—in developing state of Guernsey trust industry, court to encourage resolution of issues at trial, rather than allow striking out of allegations pleaded in alternative ways but not causing extra work in responding to them: Hutcheson v. Spread Trustee Co. Ltd. (Royal Ct.), 2009–10 GLR N [4]

power of accumulation

by Trusts (Guernsey) Law 1989, s.43(1) and (2), power to accumulate income has to be provided expressly—if settlor intended accumulation, rectification granted retrospectively to protect trustee mistakenly accumulating income annually in belief that power implied: In re Pelican Trust (Royal Ct.), 2005–06 GLR 20

power of advancement. See Powers and duties of trustees—loan to beneficiary

power to exclude beneficiary

court to consider whether settlor intended power to preclude only direct benefit under trust or to prevent both direct and indirect benefit entirely—if former, excluded beneficiary may still benefit from trust via payments to another fiduciary body: In re C Trust (Royal Ct.), 2013 GLR 105

powers on insolvency of trust

retain powers to deal with trust property and court retains supervisory jurisdiction over them—trustees not able adversely to affect any security creditors may have over trust asset but, unless blatantly misbehave, retain right to apply to court for directions even if proposed actions not of benefit to creditors: In re F (C.A.), 2013 GLR 388

protection of trustees’ interests. See Powers and duties of trustees—duty of confidentiality

removal of trustees

if protector validly exercises power to remove trustee, trustee removed immediately and loses further right to act as trustee—duty to transfer trust assets to new trustee as soon as reasonably practicable, subject to right under Trusts (Guernsey) Law 1989, s.39 to be provided with reasonable security for liabilities—until transfer, owes fiduciary duties in relation to dealings with trust property as if still trustee but may no longer charge fees provided for by trust instrument Virani v. Guernsey Intl. Trustees Ltd. (C.A.), 2000–02 GLR 472

standard of care

submission to foreign court

application for sanction of submission to foreign court heard in private: In re A Ltd. FURBS (Royal Ct.), 2017 GLR N [7]

not generally in interests of beneficiaries for trustee to submit to foreign court in matrimonial proceedings of beneficiaries: In re A Ltd. FURBS (Royal Ct.), 2017 GLR N [7]

trustee of funded unapproved retirement benefits scheme joined to matrimonial proceedings by English High Court authorized to submit to jurisdiction of English court—desirable to explain terms on which assets held: In re A Ltd. FURBS (Royal Ct.), 2017 GLR N [7]

surrender of discretion to court. See Powers and duties of trustees—application for directions

Powers of court

application for directions. See Powers and duties of trustees—control by court

declaration in respect of trust

declaration granted under Trusts (Guernsey) Law 2007, s.69(1)(c) to remove possible ambiguity in deed of appointment: In re V Trust (Royal Ct.), 2022 GLR 1

remuneration of trustees. See Remuneration of trustees—authorization by court

supervisory jurisdiction

court has very wide powers to make orders for benefit of trusts—in litigation concerning restructuring of family trusts, no jurisdiction under Trusts (Guernsey) Law 2007, s.69 to grant application by respondent beneficiaries for order against appellant beneficiaries for disclosure of documents concerning appellants’ communications with private investigators who obtained information about first respondent’s finances—trustee did not seek documents nor intend to rely on them—not for beneficiary to force trustee to expand information gathering—even if court had jurisdiction, order would not have been made: In re M Trusts (C.A.), 2023 GLR 348

court may order disclosure of trust documents to non-beneficiary in exceptional circumstances to facilitate proper administration of trust—applications by family members of deceased settlor for disclosure dismissed as failed to show exceptionally strong chance of being added to beneficial class: BX v. T Ltd. (Royal Ct.), 2024 GLR 162

variation. See Variation

Presumption of advancement. See Resulting trusts—presumption of advancement

Proper law. See CONFLICT OF LAWS (Trusts—legislative control in Guernsey), (Trusts—preliminary acts creating trust)

Protectors. See Trust protector

Public Trustee

appointment

as matter of law, Public Trustee can be appointed as trustee of unit trust regulated by Guernsey Financial Services Commission as Class B Fund, provided appointment for purpose of carrying out statutory function (set out in Public Trustee (Bailiwick of Guernsey) Law 2002, s.2(1)): In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

interests of beneficiaries—whether appointment in interests of beneficiaries (Public Trustee (Bailiwick of Guernsey) Law 2002, s.2(1)(a)(iii)(A)) determined by court, not beneficiaries: In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

investor cannot be found—many possible reasons for professional service provider losing contact with investor—Public Trustee not appointed under Public Trustee (Bailiwick of Guernsey) Law 2002, s.2(1)(a)(iv) unless every reasonable step taken to find investor: In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

not justified on ground that investors lost trust and confidence in current trustee (and no other licensed fiduciary available)—Public Trustee only appointed if within functions of office to act: In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

not prevented by Authorised Collective Investment Schemes (Class B) Rules 2013, r.4.01 (i.e. that trustee must be company licensed under the Protection of Investors (Bailiwick of Guernsey) Law 1987)—Guernsey Financial Services Commission has power under r.2.03 to exclude any provision if satisfied compliance unnecessary—restriction also overridden by Public Trustee (Bailiwick of Guernsey) Law 2002, s.3(4) (i.e. appointment of Public Trustee to have effect notwithstanding any other provision): In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

not prevented by Protection of Investors (Bailiwick of Guernsey) Law 1987, s.1(1) as Public Trustee not carrying out investment business: In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

protecting reputation of Bailiwick—as no prima facie evidence of breach of trust by current trustee, appointment of Public Trustee not required under Public Trustee (Bailiwick of Guernsey) Law 2002, s.2(1)(a)(iii)(B): In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

powers and duties

former trustees to provide Public Trustee with all documents and information relating to administration of trusts, even if documents or information also relevant to some other matter—information about bank accounts held by former trustees or nominees plainly relevant: Sherborne Corp. Servs. Ltd. v. Public Trustee (C.A.), 2022 GLR 97

investigation of pension schemes—appeal dismissed against Royal Court order that information be provided by former trustees and others: Sherborne Corp. Servs. Ltd. v. Public Trustee (C.A.), 2022 GLR 97

order for provision by holder of bank account (which received funds from pension schemes under investigation by Public Trustee) of information to Public Trustee not breach of account holders’ rights under ECHR art. 8—even if art. 8 applies, order justified under art. 8(2): Sherborne Corp. Servs. Ltd. v. Public Trustee (C.A.), 2022 GLR 97

Public Trustee is statutory role—only has functions assigned to office, namely to act as trustee in circumstances set out in Public Trustee (Bailiwick of Guernsey) Law 2002, s.2(1): In re Arasbridge Unit Trust (Royal Ct.), 2017 GLR 209

Purchase in joint names. See Resulting trusts—purchase in joint names

Purchase of property in name of another. See Constructive trusts—advance to purchase property in name of another

Reception of English law. See Variation—reliance on overseas authorities

Rectification

discretion of court

deed of appointment in 2008 intended to take advantage of transitional provisions of Finance Act 2006 by restructuring trust to avoid IHT liability rectified as did not reflect parties’ true intention, no other practical remedy, issue capable of being contested between parties, no undue delay, and full and frank disclosure: In re V Trust (Royal Ct.), 2022 GLR 1

five requirements for rectification: (a) sufficient evidence of error in reflecting settlor’s true intention; (b) highest degree of civil probability that genuine mistake; (c) full and frank disclosure of information surrounding creation of trust; (d) no other practical remedy; and (e) no undue delay: In re Pelican Trust (Royal Ct.), 2005–06 GLR 20

trust deed to be rectified to exclude applicant from benefit—settlor had not intended applicant to benefit and genuine error made in failing to exclude him: Hannah v. Marlborough Trust Co. Ltd. (Royal Ct.), 2023 GLR 160

incorrect legal advice to settlor

court has discretion to rectify mistake caused by incorrect legal advice and drafting which fails to give effect to settlor’s intentions: In re Pelican Trust (Royal Ct.), 2005–06 GLR 20

proceedings in public

public interest in rectification proceedings may outweigh protection of parties’ confidential information—even though court validly constituted by judge alone, trial of rectification proceedings with Jurats preferable if possible: In re C Trust (Royal Ct.), 2013 GLR 105

standard of proof

high standard of convincing evidence required to contradict written document and show that, by mistake, fails to represent settlor’s intention and rectification justified: In re Pelican Trust (Royal Ct.), 2005–06 GLR 20

taxation

no objection to rectification that mistake made in settlement legitimately intended by settlor to avoid payment of tax: In re Pelican Trust (Royal Ct.), 2005–06 GLR 20

Regulation of professional fiduciaries. See FINANCIAL SERVICES (Regulation of fiduciaries)

Removal of trustees

removal by protector. See Powers and duties of trustees—removal of trustees

security for liabilities

Remuneration of trust protector. See Trust protector—remuneration

Remuneration of trustees

assessment of reasonableness

insolvent trusts

when assessing reasonableness of remuneration claimed by trustee, court to take into account possibility that trust insolvent—claim reduced by 35% on grounds of precarious state of trust and proportionality—fees claimed for period following appointment of joint receivers reduced by 80%—inequitable to refuse claim altogether and thereby confer windfall benefit on beneficiaries and creditors: In re Tchenguiz Discretionary Trust (Royal Ct.), 2017 GLR 13

authorization by court

court may award remuneration to trustees under inherent jurisdiction to supervise administration of trusts: In re Tchenguiz Discretionary Trust (Royal Ct.), 2017 GLR 13

open justice requires public hearing unless justice only served if in private—applications by trustees for directions heard in private—claims by trustees or other fiduciaries for remuneration usually heard in public: In re Tchenguiz Discretionary Trust (Royal Ct.), 2017 GLR N [5]

under Trusts (Guernsey) Law 1989, s.30(1)(c), court may authorize remuneration of replacement trustees, including retrospective remuneration, e.g. by varying clause in settlement deed—also inherent jurisdiction to provide for remuneration, since to encourage good administration of trusts: In re H. Sossen 1969 Settlement (Royal Ct.), 2003–04 GLR N [18]

Replacement of trustees

appointment of new trustee

wide power to appoint new trustee pursuant to Trusts (Guernsey) Law 2007, s.18(1)(c)(iv) and s.69(1)(a)(ii)—to be exercised according to welfare of beneficiaries and competent administration of trust—sound basis to appoint replacement trustee if (a) replacement trustee supported by beneficiaries; (b) willing to be appointed and familiar with trusts, being former trustee; (c) good working relationship with beneficiaries; and (d) located and regulated in Island: X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 237

X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 1906

duties of outgoing trustee

outgoing trustee normally has duty to provide incoming trustee with all documents and information relating to administration of trusts, even if documents or information also relevant to some other matter—information about bank accounts held by outgoing trustees or nominees plainly relevant: Sherborne Corp. Servs. Ltd. v. Public Trustee (C.A.), 2022 GLR 97

removal of trustee

corporate trustee incapacitated by resignation of all its directors, leaving trusts effectively paralysed, removed by court under Trusts (Guernsey) Law 2007, s.18(3) (i.e. trustee failed to exercise power to appoint new or replacement trustees) or s.69(1)(a)(ii) (i.e. trustee unfit or incapable of acting): X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 237

X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 1906

former trustee granted leave (under Guernsey (Trusts) Law 2007, s.69(2)(g)) to apply (at beneficiaries’ request) to replace corporate trustee incapacitated by resignation of all its directors: X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 237

X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 1906

removed trustee to vest trust property in new or continuing trustees, subject to reasonable security for liabilities: X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 237

X Trustees Ltd. v. Y Trust Co. Ltd. (Royal Ct.), 2019 GLR 1906

remuneration. See Remuneration of trustees—authorization by court

transfer of trust assets

in trust administered in Guernsey but governed by Jersey law, by Trusts (Jersey) Law 1984, art. 32(1)(a) if original trustee has transferred trust assets to replacement trustee, and no longer has control of sufficient assets to satisfy third party’s claim out of “trust property,” has right to indemnity from subsequent trustee out of and up to limits of “trust property” now controlled by him: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

original trustee has proprietary equitable interest in trust property which survives appointment of replacement trustee—recognized in Jersey law as providing right of action in context of trusts: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

Restitution

unjust enrichment

test—(a) had defendant been enriched? (b) was enrichment at claimant’s expense? (c) was enrichment unjust? (d) were any defences available to defendant?—if A makes payment in respect of property of B, at B’s request, A may have right of action against B—if A confers unsought benefit, may be no equitable relief: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2015 GLR 300

test—(a) had defendant been enriched? (b) was enrichment at claimant’s expense? (c) was enrichment unjust? (d) were any defences available to defendant?—no unjust enrichment if claimant discharged loan owed by defendant pursuant to contractual agreements: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (P.C.), 2018 GLR 97

Resulting trusts

presumption of advancement

equitable presumptions of English law (e.g. advancement or resulting trust) not incorporated into Guernsey land law—applying Norman law principle, joint owners prima facie entitled to property or proceeds of sale in equal shares: Pirito v. Curth (C.A.), 2003–04 GLR 218

purchase in joint names

no resulting trust if cohabitees purchase and register property in joint names but one provides all or most funds—equitable presumptions of English law (e.g. advancement or resulting trust) not incorporated into Guernsey land law—applying Norman law principle, joint owners prima facie entitled to property or proceeds of sale in equal shares: Pirito v. Curth (C.A.), 2003–04 GLR 218

Retirement of trustees

payment of fees. See Retirement of trustees—security for liabilities

security for liabilities

under Trusts (Guernsey) Law 1989, s.39(1)(a), retiring trustee may require provision of “reasonable security for liabilities” before surrendering trust property—in setting level of security, court to balance s.39 requirement with need to avoid causing respondent injustice, e.g. by setting level so high as to stifle challenge to retiring trustees’ fees: Wallbrook Trustees (Guernsey) Ltd. v. Baxter (Royal Ct.), 2005–06 GLR N [21]

Right to disclosure of accounts. See Powers and duties of trustees—duty to give information to beneficiaries

Rights of beneficiaries. See Beneficiaries—rights

Rights of trustees

indemnity from trust assets

in trust administered in Guernsey but governed by Jersey law, by Trusts (Jersey) Law 1984, art. 32(1)(a) original trustee has right to indemnity from replacement trustee for any balance remaining due to third party only to extent of “trust property” held by replacement trustee: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

in trust administered in Guernsey but governed by Jersey law, Trusts (Jersey) Law 1984, art. 32(1) and (2) improves position of trustee against third party claimant since may enforce indemnity against trust assets even though allegedly in default or in breach of trust: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

right of earlier trustee to indemnity from successor up to limit of trust assets is equitable right similar to non-possessory lien—recognized in Jersey law as providing right of action if necessary: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

reimbursement and indemnity

costs. See Costs—indemnity from trust fund

Security for liabilities. See Removal of trustees—security for liabilities. Retirement of trustees—security for liabilities

Setting aside trust. See Mistake—setting aside trust

Settlement of disputes

alternative dispute resolution

ADR specifically provided by Trusts (Guernsey) Law 2007, s.63 for binding resolution of claims for breach of trust—to be considered as possible alternative procedure to litigation or surrendering trustees’ discretion to court: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

Settlor

indemnity against English taxation

Submission to foreign court. See Powers and duties of trustees—submission to foreign court

Subrogation of third party to trustee’s right to indemnity. See Liabilities of trustees—personal liability

Supervision by court

categories for supervision

supervisory jurisdiction of Royal Court under Trusts (Guernsey) Law 2007, s.69 unlimited but includes (1) power to determine scope of duty or power; (2) power to “bless” trustees’ proposed “momentous” decision; (3) power to accept surrender of trustees’ discretion to make discretion; and (4) power to determine whether duty properly discharged or power properly exercised: In re F (C.A.), 2013 GLR 388

when asked to “bless” trustees’ proposed “momentous” decision, court has no discretion of its own but limited to making declaration that trustees’ proposal lawful and takes account of all relevant matters—when trustees’ discretion surrendered to court, it exercises trustees’ discretion as would reasonable trustees in all circumstances: In re F (C.A.), 2013 GLR 388

encouragement of good administration. See Remuneration of trustees—authorization by court

exercise of discretion

application for exercise of discretion to be heard in private, published details anonymized and reasons for decision treated as those of presiding judge and Jurats jointly: In re H Trust (Royal Ct.), 2007–08 GLR 118

appropriate for presiding judge to retire with Jurats to reach common decision on all applications under Trusts (Guernsey) Law 1989 (not concerning question of pure law for judge alone) for exercise of court’s discretion in supervising or intervening in Guernsey trust—suitable procedure on application for approval of variation of trust: In re H Trust (Royal Ct.), 2007–08 GLR 118

court may accept trustee’s surrender of discretion if trustee in position of conflict of interest—appropriate if approval sought for terms of settlement of trustee’s hostile litigation with beneficiaries—difficult for trustee then to be neutral especially if minor or unborn beneficiaries involved: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

court may accept trustee’s surrender of discretion if trustee in position of conflict of interest, e.g. situation requires favouring one group of investors over another and risk of trustee perceived to be acting in own interests—court to adopt course of action achieving balance of fairness between conflicting interests—has no greater powers than trustee but to be guided by need to do best for trust estate: In re Arasbridge Unit Trust (Royal Ct.), 2015 GLR 72

having accepted trustee’s surrender of discretion, court may choose not to exercise it as if trustee, if unrealistic to do so—if asked to approve settlement of litigation between trustee and beneficiaries, may consider whether agreement is appropriate compromise and suitability of other alternatives: A Trust Co. v. F (Royal Ct.), 2014 GLR 31

inherent jurisdiction

court has inherent jurisdiction to supervise and intervene in administration of trust—basis of court’s discretion to require trustees to give beneficiaries access to trust documents, subject to statutory duties in Trusts (Guernsey) Law 1989, s.22: A Ltd. v. H.M. Procureur (C.A.), 2003–04 GLR 593

Royal Court has same supervisory jurisdiction over trusts and administration of estates—desirable for trustee to seek directions of court if dispute over administration of trust assets: Green v. Torode (Royal Ct.), 2015 GLR N [8]

insolvency of trust

retains supervisory jurisdiction over trustees, who retain powers to deal with trust property—trustees not able adversely to affect any security creditors may have over trust assets but, unless blatantly misbehave, retain right to apply to court for directions even if proposed actions not of benefit to creditors: In re F (C.A.), 2013 GLR 388

Supervisory jurisdiction. See Powers of court—supervisory jurisdiction

Surrender of discretion. See Powers and duties of trustees—application for directions. Powers and duties of trustees—control by court. Supervision by court—exercise of discretion

Termination

termination at beneficiaries’ request

sole beneficiary entitled to invoke Trusts (Guernsey) Law 2007, s.53(3) seeking termination of trust and distribution of trust property—may do so even if trust confers power on appointor to appoint additional beneficiaries—potential objects of unexercised power to appoint additional beneficiaries not “beneficiaries”: Rusnano Capital A.G. v. Molard Intl. (PTC) Ltd. (Royal Ct.), 2019 GLR 139

Tracing

general principles

may trace money if property unlawfully taken (a proprietary base); used to acquire new identifiable property (a series of transactional links); and unbroken chain of substitutes—mere technical process for showing what happened to property—needs to be based on separate cause of action: EFG Private Bank (C.I.) Ltd v. B.C. Capital Group S.A. (Royal Ct.), 2014 GLR N [11]

methods of tracing

matching—may trace money if withdrawal matches corresponding deposit made within close period of time: EFG Private Bank (C.I.) Ltd v. B.C. Capital Group S.A. (Royal Ct.), 2014 GLR N [11]

Transfer of beneficial interest in shares. See Beneficiaries—transfer of interests in shares

Trust accounts

duty to provide accounts

Trust assets

availability to satisfy claims by third parties

in trust administered in Guernsey but governed by Jersey law, by Trusts (Jersey) Law 1984, art. 32(1)(a) only assets currently in trust at time of claim by third party may be used to satisfy claim—if assets disposed of before claim to be satisfied, neither former trust property nor trustee personally liable to satisfy balance due: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

in trust administered in Guernsey but governed by Jersey law, by Trusts (Jersey) Law 1984, art. 32(1)(a) third party knowing that contracting with trustee has no direct right of recourse to trust assets—limited to proceeding against original trustee and exercising right of subrogation if necessary—since liabilities fixed from outset, third party put on notice that may need to put extra security in place: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

in trust administered in Guernsey but governed by Jersey law, Trusts (Jersey) Law 1984, art. 32(1) and (2) improves position of third party claimant against trustee, since extends personal liability of trustee and allows him to indemnify himself out of trust property even if in default or alleged breach of trust: Investec Trust (Guernsey) Ltd. v. Glenalla Properties Ltd. (C.A.), 2014 GLR 371

indirectly-held assets. See Liabilities of trustees—indirectly held assets

Trust companies

liability of directors

directors owe fiduciary duty to company, not to beneficiaries of trust—beneficiaries cannot bring action against directors for breach of trust committed by trust company: Rowe v. Cross (C.A.), 1997–99 GLR 154

only liable in negligence for acts or omissions of trust company if assume personal responsibility and reliance: Rowe v. Cross (C.A.), 1997–99 GLR 154

to establish directors’ liability under Trusts (Guernsey) Law 1989, s.70, plaintiff to establish (a) breach of trust by corporate trustee; (b) proposed guarantor was director at time of breach; and (c) damages or costs awarded against trust company—directors proper parties to be joined to action against trust company: Rowe v. Cross (C.A.), 1997–99 GLR 154

regulation of fiduciaries. See FINANCIAL SERVICES (Regulation of fiduciaries)

standard of care. See Liabilities of trustees—exclusion of trustee’s liability

Trust protector

indemnity from trust fund

protector not entitled to blanket indemnity from trust fund covering all actions in office as would put actions beyond challenge: In re K Trust (Royal Ct.), 2015 GLR 433

powers and duties

removal of trustee—if protector validly exercises power to remove trustee, trustee removed immediately and loses further right to act as trustee—duty to transfer trust assets as soon as reasonably possible, subject to right under Trusts (Guernsey) Law 1989, s.39 to be provided with reasonable security for liabilities—until transfer, owes fiduciary duties in relation to dealings with trust property as if still trustee but may no longer charge fees provided for by trust instrument: Virani v. Guernsey Intl. Trustees Ltd. (C.A.), 2000–02 GLR 472

removal of protector

court may remove protector if remaining in office would harm beneficiaries and competent administration of trust—removal to be exercised cautiously but exceptional circumstances not required—may be removed if relationship with beneficiaries breaks down, conduct damages their interests and trustee’s failure to intervene for fear of protector’s veto frustrates proper functioning of trust: In re K Trust (Royal Ct.), 2015 GLR 433

court may remove protector under Trusts (Guernsey) Law 2007, s.69, or under fiduciary jurisdiction if appropriate: In re K Trust (Royal Ct.), 2015 GLR 433

remuneration

court may award remuneration to trust protectors under inherent jurisdiction to supervise administration of trusts—considerably less than trustee’s remuneration, as role far more limited: In re Tchenguiz Discretionary Trust (Royal Ct.), 2017 GLR 13

protector not remunerated from trust for performing duties as director of companies owned by trust if acted in capacity as director of investment management company not as protector: In re Tchenguiz Discretionary Trust (Royal Ct.), 2017 GLR 13

replacement of protector

new protector may apply for copies, not originals, of trust documents in court’s discretion—to be put in same position as protector replaced: In re K Trust (Royal Ct.), 2015 GLR 433

retirement of protector

entitled to retire without appointing successor if envisaged by trust documents: In re K Trust (Royal Ct.), 2015 GLR 433

Trustees. See Beneficiaries—rights. Liabilities of trustees. Powers and duties of trustees. Remuneration of trustees. Replacement of trustees. Retirement of trustees—security for liabilities

Variation

“benefit”

evidence that settlor no longer wishes beneficiaries to benefit from trust of little weight in considering, under Trusts (Guernsey) Law 2007, s.57, whether proposed variation for objective benefit of minor and unborn beneficiaries: In re P Trust (Royal Ct.), 2011–12 GLR N [18]

wide construction to be given to concept of “benefit” in exercising discretion to vary under Trusts (Guernsey) Law 1989, s.52—includes not only financial benefit but also “social benefit” to family by facilitating long-term care of mentally disturbed beneficiary, providing educational and other social benefits, protecting immature beneficiary by postponing date of entitlement to funds, or maximizing tax-planning benefits: In re H Trust (Royal Ct.), 2007–08 GLR 118

wide construction to be given to concept of “benefit” in exercising discretion to vary under Trusts (Guernsey) Law 2007, s.57—includes not only financial benefit, but also social and moral benefit, e.g. encouraging beneficiaries to progress career and settle in life by not giving them substantial assets when too young: In re M Settlement (Royal Ct.), 2011–12 GLR 276

wider meaning than simply pecuniary—not essential for benefit inevitably results, provided overwhelmingly likely to do so: In re PQ Employer Financed Retirement Benefit Plan (Royal Ct.), 2019 GLR N [1]

wider meaning than simply pecuniary—not essential that benefit inevitably results, provided overwhelmingly likely to do so: In re PQ Employer Financed Retirement Benefit Plan (Royal Ct.), 2019 GLR N [1]

charitable and public trusts. See Charitable trusts—variation

exercise of discretion

appropriate for presiding judge to retire with Jurats to reach common decision on exercise of discretion to vary under Trusts (Guernsey) Law 1989, s.52 (if not question of pure law for judge alone): In re H Trust (Royal Ct.), 2007–08 GLR 118

court has wide discretion pursuant to Trusts (Guernsey) Law 2007, s.57—to consider whether (i) “arrangement” which “varies” terms of trust and (ii) arrangement benefits those on whose behalf court asked to consent: In re PQ Employer Financed Retirement Benefit Plan (Royal Ct.), 2019 GLR N [1]

if risk that variation proposed carries no benefit or may cause loss, in exercising discretion court to take same risk as “reasonable adult”, i.e. prudent adult motivated by intelligent self-interest after sustained consideration of expectancies and risks of proposed variation: In re M Settlement (Royal Ct.), 2011–12 GLR 276

may allow variation if for benefit of minor and unborn beneficiaries and genuine variation, not resettlement—court to consider variation as a whole, in light of purpose of trust disclosed in trust instrument and other evidence, advantages obtained by various parties, and bargaining strength: In re M Settlement (Royal Ct.), 2011–12 GLR 276

may allow variation increasing trustees’ powers if enables trustees to act for benefit of beneficiaries: In re M Settlement (Royal Ct.), 2011–12 GLR 276

notwithstanding that settlor wishes to exclude certain members of class of beneficiaries, variation under Trusts (Guernsey) Law 2007, s.57 may be ordered—settlor’s wishes little help in considering whether variation objectively for benefit of minor and unborn beneficiaries: In re P Trust (Royal Ct.), 2011–12 GLR N [18]

under Trusts (Guernsey) Law 2007, s.80, “terms of the trust” means written or oral terms of trust and any other terms applicable under its proper law—may include terms of deed executed later than trust instrument—“irrevocable” terms of deed may be varied under s. 57 for benefit of minor and unborn beneficiaries: In re P Trust (Royal Ct.), 2011–12 GLR N [18]

wide discretion only fettered statutorily by terms of Trusts (Guernsey) Law 1989, s.52(2) itself—rare instances in which court may wish to decline to exercise discretion considered: In re H Trust (Royal Ct.), 2007–08 GLR 118

reliance on overseas authorities

since no Guernsey authority on variation under Trusts (Guernsey) Law 1989, s.52, proper to rely on persuasive English and Jersey authorities based on comparable statutory provisions: In re H Trust (Royal Ct.), 2007–08 GLR 118

Trusts (Guernsey) Law 2007, s.57 is simplified version of English Variation of Trusts Act 1958—English authorities to be considered bearing in mind that Guernsey and English legislation not identical: In re M Settlement (Royal Ct.), 2011–12 GLR 276

remuneration

court may vary trust deed to authorize remuneration of replacement trustee, including awarding retrospective remuneration, either under Trusts (Guernsey) Law 1989, s.30(1)(c) or inherent jurisdiction to encourage good administration of trusts: In re H. Sossen 1969 Settlement (Royal Ct.), 2003–04 GLR N [18]

Wilful misconduct of trustee. See Liabilities of trustees—exclusion of trustee’s liability