The elegant words of Maitland 100 years ago describing trusts as an institute of great elasticity and generality and as the most distinctive achievement of English lawyers, can no longer be taken to be the whole story.
Book review
International Trust Laws
Author: Paolo Panico
The elegant words of Maitland 100 years ago describing trusts as an institute of great elasticity and generality and as the most distinctive achievement of English lawyers, can no longer be taken to be the whole story. Trusts, in all their beauty, whether trusts for sale or strict settlements, are no longer the preserve of the English shires. The reason for this is clear. Jurisdictions overseas, which base their law wholly or in part on the English law in the last 25 years or more rediscovered and revived trusts to coincide with the greater investment outside of the UK.
Then there was the rather surprising activity to secure international recognition and enforcement of trusts embodied in the Hague Convention for this purpose. Although this Convention was not seized upon with delight by the civil law world, it nevertheless encouraged conflict of law lawyers to take an interest in trusts and, through various scholars, devices whereby property was held by one party for the benefit of the other were seen to have been quietly active in most jurisdictions since ancient times. It was whether such devices could be regarded as “analogous institutions” to trusts and covered by the Hague Convention and therefore within the potentially universal recognition and enforcement. By these means English trusts no longer were seen as unique and as the original creation of English law. Of course, there were trusts in the US, Australia, Canada, New Zealand, and gradually the existence of trusts in Jersey and Cayman Islands principally among the offshore centres became better known and, from time to time, judicial precedents in those countries were quoted in English litigation. For some years English text book writers remained preeminent; Underhill & Hayton, Lewin and Snell reigned supreme to be joined in recent years by Thomas & Hudson. In these, references crept in to offshore decisions. The only comprehensive rival to these works was Donovan Waters in Law of Trusts in Canada whose scope and detailed treatment has gone a long way towards establishing Canada as an international trust jurisdiction. Of course, there were text books from the US, Australia and elsewhere but none of these approached the subject of international trusts in anything like a comprehensive manner.
All change
Now all that has changed. International Trust Laws by Paolo Panico pushes practitioners’ trust treatises into the modern world and is the first book which can be truly called “international”. He is well qualified to do this, combining academic and professional interest in trusts. Naturally some aspects follow the traditional pattern but soon become international in their approach. The chapter entitled: Creation and Validity of Trusts: The Settlor’s Intention, commences with the familiar principles but soon adopts the author’s innovative treatment. Within two pages the question of what happens where there is a lack of formal requirements is considered by taking in precedents from the US Uniform Trust Code, the Jersey, Maltese, Mauritian, Cook Islands and Belize laws and, of course, reference is made to the relevant article in the Hague Trust Convention. Again, certainty of intention, although dealing prominently with the Rahman decision, does not stop there and we find the Privy Council’s decision on a Gibraltar case given significance with a case from the BVI, among others. Naturally some doctrines are heavily concerned with English law.
Hastings-Bass principle
The Hastings-Bass principle, however, does not escape the author’s international treatment and he refers to how the rule is applied in Jersey and the Cayman Islands. The use of case decisions outside the UK are integrated into the text in a natural manner to enrich the description of the principles. This is done without diminishing the English courts’ ability to pioneer relatively new doctrines: after discussion of the application of the principle offshore the author returns to the restatement of Hastings-Bass in Sieff v Fox. This treatment is characteristic and, particularly seen in the chapter on Disclosure of Information to the Beneficiaries and Letters of Wishes. Here much of the dross on the subject which plagued English law for decades has dropped away under the influence of the Privy Council’s decision on an Isle of Man decision in Schmidt v Rosewood Trust Limited. This relatively new doctrine has been taken up in other jurisdictions: first in the High Court of Auckland, and thereafter considered in Guernsey, and elsewhere with clarification of one of the problematic points in the case by the Supreme Court of Bermuda. The law has been enriched by this international approach.
The author brings up some interesting features which have long since been ignored; one of these is the fact that the Indian Trust Act of 1882 is still in force in a nearly unchanged form from when it was enacted incorporating many of the fundamental principles of English Trust Law at the time.
From a practitioners point of view the chapter on The Special Uses of Trusts provides an invaluable multi-jurisdictional review of the possibilities and this includes a comparative treatment on asset protection trusts and on forced heirship, on protective and spendthrift trust concepts. Chapters on the use of protectors and non-charitable purpose trusts are particularly dependent on non-English decisions.
This new text book will establish itself very quickly wherever there is an international element in the setting up or management of a trust and is long overdue.
Book review by J G Goldsworth, barrister.
