Rule In Re Hasting-Bass Flashcards
- Defining the Rule in Re Hastings-Bass
Q1. (Re Hastings-Bass [Deceased])
What is the core principle from Re Hastings-Bass [Deceased] in both English and Jersey law?
A1. If trustees (or others with fiduciary powers) fail to consider all relevant factors or consider irrelevant ones, and that error changes their decision, the decision can be challenged and possibly set aside.
- Jersey Law Enshrinement
Q2. (Trusts (Amendment No. 6) (Jersey) Law 2013)
Which amendment to the Trusts (Jersey) Law codified the Hastings-Bass principle in Jersey?
A2. Amendment No. 6 (2013). It added Articles 47F and 47H, creating a statutory basis to set aside flawed exercises of fiduciary powers – while the common law principle still remains in parallel.
Q3. (Seaton Trustees v Morgan)
Name an example where trustees used Hastings-Bass reasoning to set aside an administrative decision in Jersey.
A3. In Seaton Trustees v Morgan, trustees discovered they triggered unexpected tax consequences when novating a deferred compensation contract. They successfully invoked Hastings-Bass to set aside the transaction.
Q4. (In re B)
How did the Royal Court in Re B address the narrowing of Hastings-Bass by the Supreme Court in Pitt v Holt?
A4. The Royal Court noted (obiter) that Jersey would likely follow the narrow approach from Pitt v Holt. However, Amendment No. 6 then overrode that narrower standard, keeping the principle broader in Jersey.
Q5. (Pitt v Holt)
Did the Supreme Court’s judgment in Pitt v Holt require a breach of duty or fault by trustees for Hastings-Bass to apply in England?
A5. Yes. The Supreme Court endorsed that English trustees must commit a breach of trust or duty for Hastings-Bass to undo the decision. In contrast, Jersey law explicitly says no fault is required (Article 47F(4) and 47H(4)).
Q6. (Strathmullan)
Why did the Royal Court in Strathmullan consider the potential impact on third parties when deciding whether to set aside a flawed transaction?
A6. Courts are cautious about disturbing valid contractual arrangements or harming third parties’ rights. In Strathmullan, any effect on non-consenting third parties could weigh against setting aside the transaction.
Q7. (Seaton Trustees v Morgan)
Does the Hastings-Bass principle apply only to dispositive powers, or also to administrative powers (like contracts)?
A7. In Seaton Trustees v Morgan, the Jersey court confirmed it can extend to administrative decisions too, whenever trustees have a discretion and fail to consider relevant/irrelevant factors properly.
Q8. (General in Jersey)
In Jersey, is the test that trustees “would” have acted differently or that they “might” have acted differently?
A8. Jersey courts (and now Article 47F & 47H) adopt the “would” test – i.e., the flawed decision can be undone only if, but for the mistake, the trustees would have decided otherwise.
Q9. (Pitt v Holt (English Approach))
How did Pitt v Holt in England characterize flawed trustee decisions under Hastings-Bass – void or voidable?
A9. The Supreme Court found such decisions are voidable, not automatically void. Equitable defenses or the court’s discretion can still allow them to stand, depending on circumstances.
Q10. (Articles 47F & 47H)
Under Article 47F and 47H in Jersey, how does the court’s power differ from the English approach regarding decisions that are set aside?
A10. Jersey law states the exercise is “voidable” – the court can declare it of no effect from inception or partially preserve it with modifications, giving the court greater flexibility than the narrower English stance.
Q11. (Re Grundy Trust)
How did Re Grundy Trust illustrate the court’s flexibility in rewriting a flawed trustee decision under Article 47?
A11. The trustee’s mistaken exclusion of a beneficiary was voidable. The court replaced it with a less extreme exclusion – effectively rewriting it to reflect what the trustee would have done had it considered the correct information.
Q12. (Hawksford Trustees Ltd v P)
In Hawksford Trustees Ltd v P, why did the court refuse to transform a sale into a gift when partially setting aside a transaction?
A12. It was too different from the original flawed sale. The court can fix or modify the voidable decision to align with what was intended, but it cannot create an entirely different transaction.
Q13. (Hastings-Bass Principle in Jersey)
Summarize why the rule in Re Hastings-Bass (and its statutory form under Articles 47F & 47H) is crucial in Jersey trust law.
A13. It ensures trustees (and other fiduciaries) who overlook relevant facts or rely on mistaken advice can set aside the flawed act. Jersey law goes beyond the English approach: no breach or fault is required; decisions are typically voidable and can be reworked to reflect what the trustee would have done with correct considerations.