Hague Trusts Convention Research Articles

The governing law of contribution claims: looking beyond Roberts v SSAFA

The governing law of claims for contribution, where the applicable law of the underlying claim is a foreign law, has long posed a knotty problem in English private international law. The Supreme Court's decision in Roberts v Soldiers, Sailors, Airmen and Families Association considered this issue in the context of the common law choice of law rules. This article considers the decision in Roberts and claims for contribution falling within the scope of the Rome II Regulation, the Rome I Regulation as well as the Hague Trusts Convention. It is argued here that claims for contribution arising out of the same liability should be considered as “parasitic” on the underlying claim and should prima facie be governed by the applicable law of the underlying claim.

Fiduciary duties and the 1985 Hague Trusts Convention

Abstract This article considers the ongoing work and application of the Hague Conference on Private International Law (HCCH) Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition (Trusts Convention). The article analyses fiduciary duties found across the trusts legislation and draft legislation of selected common and civil law jurisdictions. The commonalities of fiduciary duties across jurisdictions are presented here to provide a foundation for discussion among legal experts regarding their possible future inclusion in the HCCH Trusts Convention or in supporting materials developed by the HCCH as a list of fiduciary duties. Such a list of duties would foster certainty and predictability for those involved in legal relationships created by trusts.

Доверительная собственность (траст) в законодательстве, правовой доктрине и судебной практике стран романо-германской правовой семьи

As of today, some civil law jurisdictions have adopted domestic trust legislation acknowledging a trust as a form of ownership. Several civil law jurisdictions have recognised foreign trusts in recent years as a regulatory and tax matter, in order to find and document the offshore assets of their taxpayers and other jurisdictions have adopted the Hague Trust Convention on the Law Applicable to Trusts and on Their Recognition 1985, simplifying the construction and recognition of foreign trusts, because the Convention imports specific conflict of law provisions into the law of the countries that have adopted it. In the other civil law jurisdictions that have not adopted the Trust Convention, the election of law made by the settlor will generally be recognised if their laws authorise an election. Notwithstanding the fact that an election of a foreign law or a foreign forum is made in the trust deed, the court is going to turn to its domestic laws and among other things to its own conflict of law provisions to determine the validity of the election made. The construction and recognition of foreign trusts will rely uniquely on case law in a jurisdiction where there is no conflict of law provisions for trusts. In all civil law jurisdictions transfers in trust are generally void to the extent they deprive an heir of her forced share or a spouse of her share in a community property, if the trust violates rule against perpetuities or any other mandatory provision of domestic legislation. In light of the aforementioned, the aim of the article is to show that сivil law jurisdictions search for new ways to afford the benefit of trusts in a variety of settings.

Equitable ownership, butter and donkeys: Setting out a vision for the future of the Hague Trust Convention

ABSTRACT This article builds on the author’s closing remarks at a symposium organised by the Hague Conference on Private International Law on the future of the Hague Trust Convention (HCCH) and other issues of Digital, Commercial and Financial Law (CODIFI Conference).1 The author was asked to ‘set out a vision for the future of the Hague Trust Convention, with particular focus on how the Convention has impacted non-Contracting Parties and how their interest in the Convention can be developed’. To do this, the author dusted off the dictionary and has come up with a few action points.

Resulting trusts in the conflict of laws: an Australian perspective

The common law world continues to grapple with how to properly characterise equitable doctrines in private international law. There has been extensive criticism of the existing approach to characterisation and choice of law for equity which favours separately characterising equitable obligations and applying the lex fori. Within this broader discourse, a debate is beginning to emerge around issues involving both equitable obligations and immovable property. In this early debate, two schools of thought have developed with respect to the proper characterisation and choice of law for implied or resulting trusts over immovable property. The first approach, advanced primarily by the courts, characterises the trust as an equitable obligation governed by the lex fori. The second approach, primarily endorsed by commentators, characterises the trust as an issue of immovable property governed by the lex situs. This paper, upon evaluating the lex fori and the lex situs against the underlying objectives of choice of law, rejects both approaches as unfit for purpose. Instead, it advocates a new approach to the characterisation and choice of law for resulting trusts. This paper proposes that resulting trusts be governed by the proper law of the relationship. This conception would align with the approach taken to express trusts under the Hague Trusts Convention and most effectively provides for consistency and clarity while upholding the reasonable expectations of the parties.

2018 WA Lee Equity Lecture: Equity in an Age of Uncertainty

May I commence by acknowledging the honour done to me by asking me to give this, the nineteenth WA Lee lecture. I studied Equity, in part, under Professor Lee and he was a prominent member of the teaching community at my University College. 
 At that time, and later, I came to appreciate the extent to which his reputation was established, not just in Australia, but throughout the common law world. Perhaps the most telling of a number of indications, once publications such as the masterful Ford & Lee are put to one side, is the fact that when Donovan Waters QC, former Oxford don, STEP Honorary Member and one of the negotiators of the Hague Trust Convention,[1] visited Australia as a guest of STEP, the one Australian he specifically asked us to arrange for him to meet was Tony Lee. 
 So to give this lecture before an audience including Tony Lee fills me with not a little trepidation. He – and no doubt many others of you – will be immediately aware of any errors or imperfections. It is small consolation that, on this occasion at least, he will not be marking the paper.
 
 
 

2018 WA Lee Equity Lecture:

May I commence by acknowledging the honour done to me by asking me to give this, the nineteenth WA Lee lecture. I studied Equity, in part, under Professor Lee and he was a prominent member of the teaching community at my University College.
 At that time, and later, I came to appreciate the extent to which his reputation was established, not just in Australia, but throughout the common law world. Perhaps the most telling of a number of indications, once publications such as the masterful Ford & Lee are put to one side, is the fact that when Donovan Waters QC, former Oxford don, STEP Honorary Member and one of the negotiators of the Hague Trust Convention,[1] visited Australia as a guest of STEP, the one Australian he specifically asked us to arrange for him to meet was Tony Lee. 
 So to give this lecture before an audience including Tony Lee, fills me with not a little trepidation. He – and no doubt many others of you – will be immediately aware of any errors or imperfections. It is small consolation that, on this occasion at least, he will not be marking the paper. 
 In choosing the topic for the paper, I had in mind a paper given by the Hon Dyson Heydon, AC QC, to the first STEP Australia Conference.[2] Mr Heydon QC observed that:
 This paper is an edited version of a paper presented at the 2018 WA Lee Equity Lecture delivered on 21 November 2018 at the Banco Court, Supreme Court of Queensland, Brisbane.
 * AM RFD QC; BA (UQ), LLB (UQ), LLM (UQ).
 [1] Adopted by Australia and implemented in the Trusts (Hague Convention) Act 1991 (Cth).
 [2] JD Heydon, ‘Modern Fiduciary Liability: the Sick Man of Equity’ (2014) 20 Trusts & Trustees 1006.

The Hague Trusts Convention after Akers v Samba

The Hague Trusts Convention after Akers v Samba

Reflections on The Hague Trusts Convention after 30 years

The head of the UK Delegation for the XVth Session of The Hague Conference on Private International Law that agreed the Trusts Convention considers why more countries have not ratified or acceded to the Convention 30 years after its entry into force. The efficacy of the Convention's articles is examined with suggestions for clarifying their meaning or even for revising them if the opportunity arises. The conclusion is that the Convention largely reflects the position for validity of common law trusts, providing little incentive for a common law jurisdiction to ratify the Convention except as evidence of being a good respectable trust jurisdiction. However, the increasing use of, and familiarity with, the concept of ring-fenced funds in non-trust jurisdictions ought to lead more of them to implement the Convention. Such funds amount to “obligational trusts” of property requiring the beneficiaries' rights to have priority over the trustee's private creditors, heirs and spouse. The Convention requires trusts to have such preferential obligational effects as a minimum even though in a trust jurisdiction such trusts would have proprietary effects to bind third parties who were not bona fide purchasers for value.

Conflict of laws and the proper law of trusts: sufficient protection of proprietary interests?

This article examines whether the Hague Trusts Convention has been successful in unifying conflict of laws principles relating to trusts internationally and striking the correct balance between the rights of beneficiaries and third parties.

The Hague Trusts Convention and trusts of foreign property

The validity of declarations of trust of alienable property made by a settlor, when declaring himself trustee of retained property as well as when declaring trusts of property transferred to trustees, is governed by the Trusts Convention unless the applicable law does not provide for trusts, whereupon the lex situs will apply. Even where the Convention applies, Art 15 requires the lex situs to be applied to the transfer and creation of interests in property and the protection of third parties acting in good faith. A Convention civilian lex situs recognises only obligational, not proprietary trusts, while a non-Convention civilian lex situs recognises only personal rights.

Editorial

Italy adds to the expanding net of voluntary disclosure regimes. Malta reviews its trust legislation. A New Zealand take on liquidation and the corporate trustee. The Quistclose trust and high finance. Court of Appeal examines the Hague Trust Convention. Lord Browne-Wilkinson’s Target judgment re-appraised by the Supreme Court. Resulting trusts and advancement. Secret trusts. Canadian appellate court upholds a decision following Pitt v Holt.

The English Court of Appeal considers the governing law of trusts and the Hague Trusts Convention

In an appeal from a decision of the Chancellor, the English Court of Appeal had to undertake a close analysis of the Hague Trusts Convention. The appeal raised some important questions as to the law applicable to and the validity of trusts that purport to comprise shares registered in civil law countries, whose laws do not themselves recognize either the trust concept or the division of a legal and beneficial interest.

Mistake in a civil law context—some reflections on private foundations and ‘recognized’ trusts

This article reviews two examples of a civil law system’s reaction to mistake in respect of estate planning and wealth management arrangements. First, it discusses the Austrian and Liechtenstein courts’ attitude to mistake in relation to private foundations. Secondly, it considers various instances of mistake in connection with ‘domestic trusts’ recognized in Italy under the Hague Trusts Convention. This anecdotal evidence appears to suggest that trusts, both in their natural equitable environment and in the jurisdictions where they are ‘recognized’ under private international law provisions, exhibit a higher degree of flexibility than private foundations in relation to the courts’ ability or willingness to remedy mistakes.

How a trust lawyer ended up drafting a law on foundations: the experience of an English lawyer with a funny accent

What has led a Swiss lawyer turned English trust lawyer to go back to his roots and deal with foundations? First and foremost the realization that the two instruments bear significant similarities, followed by a desire to explain this fact to trust lawyers who think nothing of foundations (and the other way round). Thanks to the increasing number of foundations laws and the success of the Hague Trust Convention, the functional similarities are there for everyone to see. The next step consists in picking the right vehicle and using foundations along trusts to solve complex structural issues for their clients.

The Hague Trusts Convention five years on: the Swiss Federal Supreme Court's decision in Rybolovlev v Rybolovleva

On 26 April 2012 the highest court in Switzerland handed down judgment in Rybolovlev v Rybolovleva. This was one of the first since Switzerland’s ratification on 1 July 2007 of the Hague Convention on the Law Applicable to Trusts and on their Recognition to consider foreign trusts in the context of its matrimonial property regime. It serves as an important signal of the country’s willingness to respect the settlor’s chosen law. It is likely that the judgment will be viewed as a disappointment. Whilst the Swiss Courts considered the trusts were valid, they concluded that the husband was the sole beneficial owner or in a position of control. The reason for these conclusions is not properly explained, making it impossible to divine whether these conclusions are confined to the facts of the case, or might be of wider application. Cypriot trusts law, which is supposed to determine questions over the nature and extent of a beneficiary’s interest under a trust, was overlooked. Basic consideration of Cypriot trust concepts suggest that the husband did not own or control trust property. The Federal Court invoked Article 15 of the Hague Trusts Convention when there must be some basis for doubting whether this article was engaged. The Federal Court applied concepts of Swiss law that relate to companies, but the Royal Court’s decision in Re Esteem suggests that these have no application to trusts. The Federal Court paid little or no regard to the interest of third parties, such the trustees or the other beneficiaries of the trusts. Swiss Courts have moved—from ‘fortress Switzerland’—onto the other end of the spectrum, assuming exorbitant jurisdiction, and disregarding norms of comity.

The recognition of tracing under the Hague Trusts Convention: an analysis of article 11 para 3 lit d from the perspective of Swiss law

The recognition of tracing under the Hague Trusts Convention: an analysis of article 11 para 3 lit d from the perspective of Swiss law

TRUSTS IN THE DRAFT COMMON FRAME OF REFERENCE: THE “BEST SOLUTION” FOR EUROPE?

In March 2009 two international research groups produced a draft of a Common Frame of Reference (DCFR) which included among others a book, Book X, on trusts. Book X suggests a comprehensive set of model rules aimed at providing Europe with a uniform trust law. This article offers a critical evaluation of Book X of the DCFR in an attempt to ascertain not only whether it provides a desirable device, but also why there is a book on trust law at all, given that the whole purpose of the exercise was to present a draft for the establishment of common principles on contract law. In order to do so, the paper first analyses the provisions of Book X in comparison with English law, the Hague Trusts Convention and the Principles of European Trust Law, so as to establish the nature of the trust proposed. Second, it probes the internal coherence of Book X and its compatibility with existing conflict of law rules and national private laws, both as an optional instrument or a set of mandatory rules.

In re Robert Palmer's estate: X et al. v. Y, First Civil Chamber, Court of Appeal of Ticino, 19 December 2007

This is the first trust case rendered in Switzerland after the ratification of the Hague Trust Convention, which came into force on 1 July 2007 (Judgment of the Court of Appeal of Ticino of 19 December 2007 (11.2004.49)). This case deals with trust litigation in connection with the estate of Robert Palmer, the British pop singer. It examines whether there is a conflict of interest in simultaneously acting as executor of an estate and as trustee of a testamentary trust and highlights the differences between the executor of an estate and a court-appointed administrator in a civil law jurisdiction.

Luxembourg

Luxembourg's fiduciary contract—or ‘fiducie’—under the Grand-Ducal Regulation of 19 July 1983 on Fiduciary Contracts with Credit Institutions was one of the first attempts to the regulation of a fiduciary relationship in the context of a civil law system and certainly a unique move within the framework of the French Code Civil. Indeed, the definition of a ‘trust’ under Article 2 of the Hague Convention on the Law Applicable to Trusts and on their Recognition of 1 July 1985 was to some extent foreseen in Luxembourg's domestic institution which predated the Hague Convention by 2 years and provided an outstanding example of a trust-like arrangement outside of the equitable jurisprudence. Under a relatively laborious Bill that took nearly 4 years to be adopted by the ordinarily swifter Luxembourg Parliament, the Grand-Duchy ratified the Hague Trusts Convention and updated the corresponding domestic institution. As a result of the Law of 27 July 2003 relating to Trusts and Fiduciary Contracts, which came into force on 1 January 2004, the previous Grand-Ducal Regulation of 1983 was repealed and a new, strengthened notion of fiduciary contract was made available to Luxembourg practitioners. In fact, to some of them only: the Luxembourg fiduciary contract, which in this respect can be seen as a model for France's recently enacted ‘fiducie’, is restricted to banks and financial intermediaries in the context of corporate transactions (as opposed to family set-ups).