Guernsey: I have the power: Saunders versus Vautier in the context of massively discretionary trusts
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In two judgments in 2019 and 2020, the Guernsey Court of Appeal upheld the judgment of the Royal Court of Guernsey in Rusnano Capital AG (in liquidation) v Molard International (PTC) Limited and Pullborough International Corp.  GRC 011 in relation to the “Saunders v Vautier” statutory provisions under the Trusts (Guernsey) Act 2007. The position, therefore, in Guernsey at least, remains that beneficiaries of a discretionary trust can require trustees that ‘they terminate a trust and distribute the trust property, even in circumstances where there is broad power to add other (unspecified) beneficiaries. This article examines the position, regardless of opinion, in England and Wales (as well as other jurisdictions which still rely on the common law interpretation) of the so-called rule in Saunders against Vautier in light of somewhat conflicting case law and authorities, particularly in the context of trusts where operative discretionary powers effectively displace beneficial interests.
This article, written by Rupert Morris of Walkers’ Guernsey Private Capital & Trusts Practice Group, and Jessica Clark-Jones of XXIV Old Buildings, is published by Trusts & Trustees.
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