This case concerned the invalid exercise of a power of appointment of trustees. The Royal Court of Jersey refused to order the rectification of the relevant appointments, but it was prepared instead to provide relief by ratifying the would-be trustees' prior actions and by appointing them properly under Article 51 Trusts (Jersey) Law 1984 (the "Trusts Law").  


The D Retirement Trust was established in 1992 by D, a company, in order to provide benefits for its employees. D appointed G as the first trustee, but reserved to itself the power of appointing new or additional trustees.

In 1997 G wished to retire. An instrument of appointment and retirement of trustees was drawn up whereby G stepped down as trustee and D, in exercise of the above power, appointed A as the new trustee in G's place.

In 1998, a further instrument was entered into by which D, again exercising the above power, appointed BB and C as additional trustees.

In 2009 the three trustees, A, BB and C, discovered to their dismay that D had been dissolved in 1996, prior to both the first and second appointments. They therefore applied to the Royal Court for relief, including, inter alia, a declaration as to the validity or otherwise of the first and second appointments and ratification of their actions taken during the period of their administration of the trust.

By this point G had been convened to the application. G's advisers favoured an application for rectification instead, and applied on that basis in respect of the first appointment. In light of this, A, BB and C sought a similar order, in the event that G's application was successful, seeking rectification of the second appointment.

The Law:

G's application was based on the fact that, as D had not been capable of exercising its reserved power of appointment in 1997, the fall-back provision under Article 13(1) (as it was in 1997) of the Trusts Law would apply. This stated that where no provision is otherwise made under the terms of a trust, the last remaining trustee could appoint a new or additional trustee. Following the case of Re the Representation of Royal Trust (BVI) Limited and Cornel Baptiste (unreported) 29 October 1990, this wording has been given a wide interpretation, so that it applies both where there are no provisions at all in the terms of the trust for the appointment of trustees and also, as in the current case, where there are provisions which cannot in practice provide for it.

G's argument therefore was that its true intention in entering into the first appointment was to divest itself of its trusteeship in favour of A, and that it had the power to do so under Article 13(1), but due to its mistaken belief that D was still in existence this was not the route adopted. G sought to have the first appointment rectified accordingly.

Rectification is a discretionary remedy for which the test is as follows:

  • the Court must be satisfied that as a result of a genuine mistake the trust deed does not carry out the true intentions of the parties;
  • there must be full and frank disclosure; and
  • there should be no other practical remedy.  


The Royal Court refused rectification as a remedy.  

In relation to the first of the three requirements set out above, there was clearly a genuine mistake: neither G nor A, in executing the first appointment, realised that D no longer existed. However, although it was clear that G had wanted to resign, it could hardly be said that its intention was to exercise its power of appointment under Article 13(1); at the time, it did not know it had such a power.

Rectification also failed under the third requirement, as there were other practical remedies available. AA, B and C may not have been validly appointed as trustees, and as a result did not have the powers that would otherwise have been conferred upon them by the trust deed, but they were nevertheless trustees de son tort, and accountable to the beneficiaries for their actions. They therefore fell within the definition of "trustees" for the purposes of Article 51 of the Trusts Law, under which the Royal Court was prepared to ratify their previous actions, including their appointments and distributions of capital and income to the beneficiaries. The Royal Court also confirmed that AA, B and C were entitled to remuneration in accordance with their standard terms for the period since their respective purported appointments. Finally, and under the same Article, the Royal Court was prepared to appoint AA, B and C as trustees (albeit not retrospectively) and to relieve G from personal liability under Article 45. By doing so the Royal Court had provided an effective alternative to rectification, which as a result was no longer necessary.  


While the Royal Court can and will assist in these circumstances, this case is a reminder of the importance of checking that trustees use the appropriate powers given to them (whether of appointment of trustees or otherwise), including ensuring that whoever has those powers is capable of exercising them.