The issue of rectification and other available remedies for mistakes in trust deeds were discussed in the recent Royal Court of Jersey case Representations of H1 Trust Company Limited  JRC039. This summary has been prepared to provide you with a summary of the case as well as the general issues raised, but is not intended to cover all matters or to provide commentary.
Warren (1992) Limited (as Representor) made application originally seeking rectification of a deed of appointment and retirement of trustees. After a convening hearing the application was widened on the premise that rectification is a discretionary remedy and therefore will only be allowed if there is no other practical remedy.
In 2005 a deed of appointment and retirement of trustees purported to retire Elysium Trustees Limited, appoint H&P Trust Company and Warren continued as trustees. However, in the words of the Court, the document, as executed, was nonsensical. The purported appointment was made by the Protector, even though there was no Protector appointed and there were other minor grammatical errors. These errors were not spotted at the time of execution and from 2005 Warren and H&P had acted as co-trustees of the trust. The error was only noticed during the course of unrelated litigation.
The Court's position
The Court was in no doubt that it would be appropriate to rectify the deed, amended wording had been put forward by the Representor. They did however turn to the well established principle that rectification remains a discretionary remedy and will only be allowed where there is no practical remedy and the Court referred to Re R S Sesemann Will Trust  JLR 421 at para 12 as an example of this.
In applying the principle the Court found an alternative remedy; in Re Shinorvic Trust  JRC 081 at paras 36-38, the Court held that, as in English law, certain obvious mistakes can be corrected as a matter of construction without the need to obtain an order for rectification. In this case the Court adopted the view of Brightman LJ in East v Pantiles (Plant Hire) Limited 1982 2 EGLR 111 at 112.
Brightman J found that mistake in a written instrument can, in certain limited circumstances, be corrected as a matter of construction. He found that two conditions must be satisfied in order to avoid an application for rectification and allow the correction to be made as a matter of construction:
- there must be a clear mistake on the face of the instrument; and
- it must be clear what correction ought to be made in order to cure the mistake.
The Representor asked the Court to go one step further and consider whether the Jersey law should relax the second of these requirements but the Court resolutely declined to agree to any such relaxation.
The Court therefore held that they were satisfied that there was a clerical mistake, the word "Protector" had been inserted in error, and it was quite clear what correction should be made to cure this mistake. They accordingly ruled that, as a matter of construction, the 2005 deed was effective to appoint H&P as trustees of the settlement.
Though the Court did not need to consider any other remedies, a satisfactory solution having been found, they did give a brief thought to the principle of "imputed intention". They referred to Re Shinorvic again, at paras 59-65, and also an article from 2011 in the Jersey and Guernsey Law Review 357, written by Professor Paul Matthews.
The evidence clearly showed that all parties to the 2005 deed intended that H&P should be appointed as the new trustee albeit that due to the clerical error they had failed to exercise the power of appointment correctly. In addition to this, H&P and Warren had acted as trustees from 2005 onwards with no interference from Elysium, this could only be on the basis that all parties should be treated as having exercised the power of appointment in the 2005. The intention of all parties was clear and could be imputed.
The Court also reiterated that, if no other solution could be found, they would have ordered rectification.
This case provides a welcome consideration of this important area of trust law. It will be of particular interest to trustees and perhaps to other fiduciaries, both in Jersey and outside the jurisdiction. This ruling, together with the possibility that the principles laid down in the English case of Re Hastings Bass  Ch 25 are going to enshrined into Jersey statute, once again shows that Jersey has a practical and pragmatic approach to issues arising from the construction of trusts and should be seen as a jurisdiction of choice by trustees.