Wed11222017

Last updateTue, 24 Feb 2015 5pm

The Cayman Court has provided clarity over what happens in the event of absent or defective protector consent. Robert Lindley explains

Any trustee should have cause for concern upon realising that in the exercise of its powers and duties the appropriate consents had not been obtained, or were defective, thus jeopardising the validity of the trust’s administration, particularly if the absent or defective consent has remained undetected for a significant period of time. As a cautionary tale for trustees and practitioners such a set of circumstances were considered by the Grand Court of the Cayman Islands (the ‘Cayman Court’) in the case of the Y Trust No 1 (2016) which illustrates various ways in which the problem of absent or defective protector consent may be overcome, and the factors relevant to obtaining the Cayman Court’s approval to the appointment of private trust companies in place of individual trustees.

Mark Pawlowski considers the case for accepting backwards tracing as part of English law

In Bishopsgate Investment Management Ltd (in liquidation) v Homan [1994], the Court of Appeal held that the equitable remedy of tracing did not extend to tracing through an overdrawn bank account, whether it was already overdrawn at the time the relevant money was paid into it or which was then in credit but subsequently became overdrawn by subsequent drawings.

The courts will sometimes give effect to oral agreements for the transfer of land. David Sawtell examines recent case law

In order to be enforceable, an agreement for the conveyance of land typically has to be in writing and must satisfy certain formalities. This discipline protects trustees from uncertainties about the ownership of land. In some circumstances, however, the court will give effect to an oral agreement for the transfer of land even though it is otherwise unenforceable for want of these formalities by imposing a constructive trust or finding that there is a proprietary estoppel. In Dowding v Matchmove [2016], the Court of Appeal upheld such an agreement and imposed a constructive trust, even though the parties were aware that, in due course, contracts would have to be exchanged to complete the conveyance. The concern for trustees is whether an oral representation could affect the ownership of beneficial interests in the land, potentially putting them in breach of trust or, at the very least, exposing the trust to expensive and uncertain litigation. In fact, the courts have stepped in to afford some protection to trusts from the informal creation of rights in land, giving greater prominence to the unanimity principle. Matchmove shows, however, that the legal owners of land should be careful so as not to hide behind the need for written formalities in the transfer of land, as the courts may be willing to step in to prevent unconscionability.

Keith Wallace makes the case for using a trust corporation

UK trusts are said to number 170,000, according to gossip around the register of trusts being compiled by HMRC. Most of these will be modest, static and uncomplicated; for the rest, life is going to become, operationally speaking, much harder.

Geoffrey Shindler reflects on changing practices and definitions in tax law

It is now that time of the year. We can put away our cares and troubles and depart for, at least in our own view, a well-earned break.

Mary Ashley looks at modernising trusts through variation

Once a trust is created, the trustees are effectively bound by the terms of it. At times, this can mean that trustees must obey outdated directions of a trust instrument which can lead to uncertainty, inflexibility and the potential for the trust to be brought to a premature end.

John Greenfield and Elaine Gray outline recent Channel Island decisions on the personal liability of trustees

This article reviews a series of judgments delivered in 2014 and 2015 by the Guernsey Court of Appeal in the long-running Tchenguiz litigation. In particular it is worth looking at a judgment delivered on the 29 October 2014 Investec Trust (Guernsey) Ltd & ors v Glenalla Properties Ltd, which provided the first ever judicial interpretation of the statutory regime introduced by the laws of Guernsey and Jersey as to the personal liability of trustees for any obligations arising out of a Channel Island trust.

Simon Edwards sums up key recent guidance of which practitioners should be aware

March heralded not only spring but also two new sets of guidance, one from the Law Society relating to the disclosure of wills and the other from the Office of the Public Guardian relating to the duties of professional attorneys.