Foundations And Grounds For Mistake: Significant New Judgment For The Channel Islands

Summary

In its recent decision in the case of B and C v D, E, F and others [2020] JRC 169, the Royal Court of Jersey (the Court) has considered whether a Jersey law foundation and endowments made to such a foundation can be set aside ab initio on the grounds of mistake. The Court concluded that the although the endowments made to the foundation could be set aside, the foundation itself could not be set aside ab initio.

Background

The foundation was established by founders (the Founders) on 2 October 2012 (the Foundation) under the Foundations (Jersey) Law 2009 (the Foundations Law). Prior to the establishment of the Foundation the Founders had sought tax advice on the implications of establishing the Foundation (the Tax Advice). In brief summary, the Tax Advice proposed that the following steps would be taken: