JERSEY'S POSITION ON HASTINGS-BASS STILL IN THE
In recent times Jersey law has swung in a different direction
from English law in relation to the rule in Hasting-Bass, the legal
principle by which a trustee's exercise of powers can be set
aside in circumstances where inadequate deliberations on its part
have adverse implications for beneficiaries.
In the Jersey case of Leumi Overseas Trust Corporation
Limited-v-Howe  JLR 660 the Royal Court determined
that a breach of fiduciary duty on the part of the trustee was not
a necessary factor to invoke the Hastings-Bass principle.
In contrast, the more recent English Supreme Court judgment in
Pitt v Holt  STC 1148, confirmed that as a
matter of English law the existence of a breach of fiduciary duty
was a pre-requisite for a successful Hastings-Bass application.
In the Onorati case, the Court acknowledged obiter observations
in Re the B Life Interest Settlement  JRC
229 to the effect that, had it been necessary to decide
the point, the Court would have rejected the previous Jersey
decisions and applied the English law principle as declared by the
Court of Appeal in Pitt-v-Holt.
However, Onorati was not to be the case by which the Royal Court
would either align the Jersey position on Hastings-Bass with
English law, or follow its decision in the Leumi Overseas case and
confirm Jersey's move in a different direction.
The Bailiff simply identified that the Court's decision was
"to say nothing further on the topic therefore other than to
say that the position remains open although any party wishing to
submit that Jersey law should continue to plow its own furrow will
have to explain why the closely reasoned judgements [in Pit v Holt]
should not be applied".
The Court's decision is perhaps unsurprising given the
prospect that, in the not too distant future, Jersey's stance
on Hastings- Bass is to be enshrined in statute. Perhaps
particularly so given that, as drafted, the Trusts (Amendment No.
6) (Jersey) Law 201 - will uphold the position stated in the Leumi
Overseas case, namely that lack of care or other fault on the part
of the trustee is not a pre-requisite.
So, for the Jersey position on Hastings-Bass the pendulum keeps
swinging, for now at least, though it is hoped Amendment No. 6 will
bring a definitive end to its somewhat tortuous route through the
DON'T JUST "TICK THE BOX" ON TAX ADVICE
What the Court did state unequivocally in Onorati was that,
where tax treatment affects the trustee's decision, it is
wholly insufficient and a breach of fiduciary duty for a trustee to
rely on oral confirmation from a beneficiary that he or she has
received appropriate tax advice.
The court accepted that, in some circumstances, where written
advice has been obtained by a beneficiary it will be sufficient for
a trustee to act on the basis of that advice. However, the trustee
will always need to see the advice in order to satisfy itself that
it is appropriate and is based upon a correct understanding of the
Where, as is so often the case, taxation implications affect
trustees' decisions, they should be wary of concluding that,
having ensured the affected beneficiary has obtained tax advice,
"that box is ticked" with risk passed on to the tax
adviser and beneficiary. It is clear from the Onorati decision that
the trustees must have cognisance of the tax advice and form a view
as to the appropriateness of that advice to the trustees'
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