On 25 October 2013 the States of Jersey introduced never before seen statutory provisions which seek to clarify, as a matter of Jersey law, the existence and nature of the Hastings-Bass principle and the doctrine which allows the partial or complete set-aside of dispositions of property into trust and the exercise of trust powers which are made under a ‘mistake’. The enactment of these provisions was the execution of a planned response to a decision delivered by the UK Supreme Court some six months earlier which significantly reduced the scope of the Hastings-Bass principle under English law and was therefore not well received in offshore jurisdictions with large professional trustee industries in which the decisions of English courts are persuasive, such as Jersey and the British Virgin Islands (BVI).
What is the Hastings-Bass principle?
The English case of Re Hastings-Bass dates back to 1975. In a subsequent case Lloyd LJ, sitting at first instance, expressed the Hastings-Bass principle in the following terms:
“Where a trustee acts under a discretion given to him by the terms of the trust, but the effect of the exercise is different from that which he intended, the court will interfere with his action if it is clear that he would not have acted as he did had he not failed to take into account considerations which he ought to have taken into account, or taken into account considerations which he ought not to have taken into account.”
Please see full article below for more information.
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