CONSTRUCTION & INTERPRETATION OF JERSEY TRUST Flashcards
Q1: What law governs the construction and interpretation of a Jersey trust?
A: The proper law of the trust, confirmed by Art 8 of the Hague Convention and Art 9(1)(a) of the 1984 Law.
Q2: Are the rules for construing trusts different from contracts or wills?
A: No, the principles are broadly the same: aim is to find the presumed intention of the maker.
Q3: What is the key approach the court uses when interpreting trust documents?
A:
Words are read in light of surrounding circumstances (“matrix of fact”).
Ordinary meaning is preferred unless context/common sense suggests otherwise.
Q4: Is evidence of the drafter’s or settlor’s subjective intention admissible?
A: Normally no, unless there is ambiguity or clear error in the document.
Q5: Can extrinsic evidence ever be admitted?
A: Yes, if there is ambiguity or obvious error needing correction.
Q6: What is rectification of a trust?
A: Correcting the wording of a trust document to reflect the parties’ true intentions when a mistake was made.
Q7: Does rectification change the transaction itself?
A: No, it only corrects the recording of the transaction.
Q8: What are the key conditions for rectification in Jersey (after Vistra)?
A:
Genuine mistake shown on the balance of probabilities.
Full and frank disclosure.
No other practical remedy.
Remedy remains discretionary.
Q9: Can rectification apply to documents other than the original trust deed?
A: Yes – e.g., deeds of exclusion, trustee appointments.
Q10: Can rectification apply retrospectively?
A: Yes, it normally has retrospective effect.
Q11: Is delay in applying for rectification fatal?
A: Not necessarily, but serious delay can make proving the case harder.
Q12: Can rectification be sought to achieve tax advantages?
A: Yes, if it reflects the true original intention, but not merely to rewrite history for better tax treatment.
Q13: Can the court rectify a trust even if all parties consent?
A: Yes, but the court still exercises discretion and must see practical consequences.
Q14: How does rectification differ from sham claims?
A: Rectification corrects an honest mistake; sham involves deliberate deception.
Q15: Can the terms of a trust be varied?
A: Yes, either:
By powers expressly in the trust; or
By the court under Art 47 of the 1984 Law.
Q16: How does Art 47 allow variation?
A: The court can approve variations on behalf of minors, unborns, missing, or unascertained beneficiaries.
Q17: What must the court be satisfied of before approving a variation under Art 47?
A: That the variation is for the benefit of the person(s) concerned.
Q18: What does “benefit” mean for variation purposes?
A: It includes financial, tax, practical, and emotional benefits – not restricted to money.
Q19: Is the concept of “substratum” (the essential core of the trust) a barrier to variation?
A: No, Jersey courts reject the strict “substratum” doctrine from English law.
Q20: Must adult beneficiaries consent to variation directly?
A: Yes – they are parties and must individually consent.
Q21: Can variation be used to fix professional mistakes in trust drafting?
A: Yes, if the criteria are met.
Q22: Does the court usually sit in private for rectification or variation cases?
A: No, open justice usually requires public hearings, but confidentiality of identities may be preserved.
Q23: Who pays the costs if the rectification was needed due to a professional mistake?
A: Usually the professional firm pays, not the trust fund.
Q24: What standard of proof applies in rectification applications?
A: Balance of probabilities, but evidence must be convincing and clear.
