The legal test to be applied by the Jersey Royal Court in deciding whether to bless a “momentous” decision of a trustee derives from the decision of the 2001 English case of Public Trustee v Cooper (as applied in Jersey in Re S Settlement [2001] JRC 154) and falls within the second limb of the categorisation approved in that case.  The Court will at least need to be satisfied that, based on the facts, the following can be established:

  1.  the trustee has formed its opinion in good faith and the steps envisaged by the decision are desirable and proper in the circumstances;
  2. the decision is one which reasonable trustees, properly instructed, could have arrived at; and
  3. the decision has not been vitiated by any actual or potential conflict of interest on the part of the trustee.

Most recently in Jersey the test was reaffirmed in the Court of Appeal decision in Representation of Otto Poon Trust [2015] JCA 109.

The test has been approved in the Guernsey Royal Court in judgment 25/2016.  There the Guernsey trustee of a Bahamian law trust was seeking the approval of the Court to distribute the trust fund of a trust in accordance with the letter of wishes of the settlors, both of whom were now deceased.  The potential recipient beneficiaries comprised the settlors’ son and daughter and two granddaughters and a grandson.  The proposed distribution was being challenged by the son, since according to the letter of wishes he was to receive significantly less that the other beneficiaries.  It was determined that the law to be considered was Guernsey law.

It was accepted that a trustee cannot ‘slavishly’ follow a letter of wishes and the Court referred to the 2000 Jersey case of Re Rabaiotti 1980 Settlement, where it was stated that if a trustee follows a letter of wishes in such manner, their decision can be quashed if in truth it is not the decision of the trustee.

The Court referred to the test as affirmed in Otto Poon and also cited the recent English case of Cotton & Another v Brudenell-Bruce & Others [2014] EWCA Civ 1312. There, the trustees applied for the Court to 'bless' the sale of the trust’s prize asset. This was the first decision of the Court of Appeal to consider the nature and scope of the Public Trustee v Cooper jurisdiction.

The Guernsey Royal Court found that the son had shown a marked reluctance to meet with the trustee, and despite him impugning the veracity of the settlors’ signatures on the letter of wishes, adduced no substantive information to support this assertion.  Further, the Court found that, although the trustee wished to follow the letter of wishes, this was a decision taken after a proper decision-making process which was recorded.  Accordingly, the Court approved the trustee’s decision to distribute the trust fund in accordance with the letter of wishes.