In the Matter of the Shirnovic Trust

26 April 2012

There is a long-standing principle in English law that, in certain circumstances, equity will aid the defective execution of a power. In the recent case of In the Matter of the Shirnovic Trust, the Royal Court had to consider whether this principle applied in Jersey and, if so, whether it applied in a modern, unconventional scenario. Following arguments put forward by us on behalf of the Representors, the Royal Court held that it did.

The Royal Court also considered an alternative argument in order to overcome the problem posed by the defective Deed. In light of Re the T 1998 Discretionary Settlement [2008] JRC 062, the question was whether in these circumstances, Jersey law can impute an intention to exercise a power even in a situation where the donee of the power did not in fact have such an intention.After hearing from the parties, the Royal Court held that the principle applies in such a case where there is an express reference to the power in the recital and positive evidence that the Settlor had intended to exercise that power in the document to which he refers in the recital.