Jurisdiction 2 Flashcards
(20 cards)
Q1: When does the Jersey Royal Court have jurisdiction over foreign law trusts?
A1: Under Article 5 of the Trusts (Jersey) Law 1984, when:
A trustee is resident in Jersey.
Trust property is situated or administered in Jersey.
Q2: What law does the Royal Court apply when exercising jurisdiction over a foreign trust?
A2: The foreign law governing the trust—including foreign statutes and principles, as seen in Re 1964 E & F Settlements.
Q3: Can the Royal Court apply foreign statutes (e.g. English law) in Jersey proceedings?
Q4: When is a foreign trust unenforceable in Jersey under Article 49?
A4: If it:
Is contrary to Jersey law.
Involves rights/powers/obligations contrary to Jersey law.
Applies directly to immovable property in Jersey.
Is immoral or against public policy.
Q5: Does unenforceability equal invalidity in Jersey law?
A5: No. Unlike Article 11 (Jersey trusts), Article 49 only makes foreign trusts unenforceable—not invalid.
Q6: What is the core function of Article 51 of the 1984 Law?
A6: It allows trustees (and others) to seek the Court’s directions, declarations, and orders regarding trust matters.
Q7: Who can apply under Article 51?
A7:
A trustee (always).
An enforcer or beneficiary.
Any other person, with leave of the Court.
Q8: Does the Court substitute its decision for that of a trustee under Article 51?
A8: No, unless:
The trustee surrenders discretion.
The trustee’s decision is irrational (i.e. one no reasonable trustee could make).
This is part of the non-intervention principle.
Q9: What are the four categories of applications under Article 51 (per Re S Settlement)?
A9:
Power scope – Is the trustee’s action within its powers?
Blessing – Momentous decisions (trustee seeks court’s blessing).
Surrender – Trustee is conflicted or deadlocked and surrenders discretion.
Hostile litigation – Where trustee decisions are challenged for breach of duty.
Q10: What is the test for blessing a momentous decision (Re S Settlement)?
A10:
Was the decision made in good faith?
Could a reasonable trustee have reached it?
Was it free from conflict of interest?
Q11: Can the Court bless a decision if it wouldn’t have made the same one?
A11: Yes—provided the decision passes the test above. The court doesn’t substitute its own discretion.
Q12: Key case for blessing momentous decision involving divorce?
A12: Representation of the Otto Poon Trust – Distribution to husband under Hong Kong divorce order and exclusion of wife held to be reasonable.
Q13: What happens when a decision is momentous AND involves conflict of interest?
A13: The Court applies heightened scrutiny (see Re H Trust). Trustees must acknowledge and manage the conflict or surrender discretion.
Q14: When will the Court accept a trustee’s surrender of discretion?
A14: Only when no sensible alternative exists, such as:
Deadlock
Pervasive conflict of interest
Inability to act
(See RBC Trust v E and Re Y Trust)
Q15: Example of a successful surrender involving divorce arrangements?
A15: Re Y Trust (2023) – All beneficiaries agreed to distribute assets to satisfy divorce terms. Court accepted surrender due to no sensible alternative.
Q16: What characterises Category 4?
A16:
A challenge to past trustee conduct.
Allegation of breach of duty or improper exercise of powers.
Heard via Order of Justice, not mere representation.
Q17: What is the “non-intervention principle”?
A17: The Court will not override a trustee’s decision unless:
The trustee surrendered discretion.
The decision is one no reasonable trustee would make.
(Re Alpha Beta & Delta Trusts, Re Kleinwort Hambros Trust)
Q18: Is the non-intervention principle flexible?
A18: Yes. It’s not a hard rule, but a discipline guiding the court’s role. Article 51 is broad, but must be used sensibly and not arbitrarily.
Q19: Can the Court give non-binding guidance?
A19: Possibly, but it’s controversial. The Court of Appeal warned that such guidance may influence future decisions and should be used sparingly.
Q20: What if a trustee fails to disclose a conflict?
A20: The Court may refuse to bless the decision (see A Trustees Ltd v WXYZ). Trustees should always disclose and explain conflicts.
