Jersey: Jersey Court Of Appeal Clarifies What's Needed For Rectification Of A Trust

Last Updated: 30 January 2019
Article by Niall MacDonald

In December 2018 the Jersey Court of Appeal issued a judgment which has clarified the test for rectification of a trust ([2018]JRC100.aspx), but ultimately still held that the trust in question should be ratified, albeit to a more limited extent.

Old test

The Royal Court, in this case and others, had described the test for rectification in Jersey as being well-established by judgments such as R.E. Sesemann Will Trust [2005] JLR 421:

  1. The Court must be satisfied by sufficient evidence that a genuine mistake has been made so that the document does not carry out the true intention of the party(ies).
  2. There must be full and frank disclosure.
  3. There should be no other practical remedy. The remedy for rectification remains a discretionary remedy.

... There is a clear distinction to be drawn between the transaction itself and the objective behind the transaction. The court can rectify a deed which does not reflect the transaction which the parties intended to achieve but the court cannot use rectification as a method of allowing the parties to achieve some other transaction which, in hindsight, would have been more desirable."


However, in the latest judgment, the Court of Appeal clarifies that the first part of that test really has two separate elements which require not just identifying an operative mistake but also what was in fact intended by the settlor.

"Although the requirement that the Court be satisfied that by mistake the document does not carry out the true intention of the parties is stated as a single requirement, it in fact requires the Court not merely to be satisfied that the parties did not intend what the document records but also to identify what they did in fact intend. The point is made clearly in paragraph 4-069 of Lewin on Trusts, 19th Edition:

"The conditions which must be satisfied in order for the court to order rectification of a voluntary settlement are as follows:

  1. There must be convincing proof to counteract the evidence of a different intention represented by the document itself;
  2. There must be a flaw (that is an operative mistake) in the written document such that it does not give effect to the settlor's intention;
  3. The specific intention of the settlor must be shown; it is not sufficient to show that the settlor did not intend what was recorded;it must also be shown what he did intend; and
  4. There must be an issue capable of being contested between the parties affected by the mistake notwithstanding that all relevant parties consent."

The Court of Appeal also clarified that the standard of proof required for rectification is simply the balance or probabilities, albeit that balance begins from a position weighted heavily against rectification because of the unlikelihood that the concluded document did not represent the parties' true intentions. "Convincing proof" is therefore necessary to tip the balance in favour of rectification. As before, this heavy burden of proof becomes even more difficult to discharge with the passage of the years.

Finally, the Court of Appeal restricted the amendments for rectification to the minimum necessary to give effect to the true intentions of the settlement.


Amendments of the trust in question could be reduced to just inserting, "save for D [the economic settlor's wife]", so that she and her relations were not excluded from being added as beneficiaries by virtue of her last minute appointment as Protector.

The economic settlor ("A") of the trust was D's husband and the original trustee was Virtue Trustees Limited. When the trust was being set up in 1998, A amended a final draft by hand to replace KPMG as protector with his wife D. The Court was persuaded that A did so with a view to protecting D. However, as an inadvertent consequence of the naming of D as Protector, she and anyone related to her fell within the definition of 'Excluded Persons" who could not be added as beneficiaries (unlike any other person).

As A was not a party to the settlement, the Court of Appeal noted that the issue was in fact the true intention of the actual settlor - Virtue Trustees. However, in the circumstances, it was reasonable to start from the position that the intentions of Virtue Jersey and A would probably coincide. There was also evidence that Virtue Trustees, like A, had not appreciated the consequences of D becoming protector instead.

Applications for rectification are often uncontested and arise in the context of a drafting error, that gives rise to an unintended consequence (such as a tax a liability), which it is in the interests of all beneficiaries to correct; whereas the latest decision arose following hearings in which the economic settlor's sons ("B & C") contested any rectification that would enable an additional line of beneficiaries to be added. B & C raised concerns regarding the state of mind of their father A when he wrote a letter of wishes shortly before his death asking for D's daughter ("E") to be added as beneficiary in 2003. However in the context of the application for rectification, the issue was the intention at the time the trust was set up in 1998 and any such challenge as to his capacity in 2003 would be a matter for trial another day.

The parties were awarded their costs from the trust, save for B & C in respect of their appeal who were obliged pay their own costs on that occasion. Walkers' represented the guardian of minor and unborn beneficiaries and adopted an essentially neutral position, with submissions that recognised that the Court is obliged to determine the settlor's intention at the relevant time regardless of the financial outcome for the beneficiaries.


Professional advisers assisting with the creation or variation of a trust may negate the risk of any subsequent proceedings by carefully recording the intention of those concerned and checking that draft documents achieve the same. If a material inconsistency between intention and effect is subsequently identified, and there is convincing proof of what was in fact intended, an application for rectification should be considered promptly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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