Guernsey: Court of Appeal Upholds Informal Trust Declaration (Ashdown v Fraser)

The Guernsey Court of Appeal has handed down a unanimous judgment in Ashdown v Fraser and APIC Trustees Limited, delivering an authoritative precedent on the construction and validity of informal trust documentation.

The appeal concerned the beneficial ownership of shares in Sylvan Holdings Limited following the discovery of an informal, handwritten note executed by the settlor stating: "THE SHARES IN SYLVAN HOLDINGS LTD ARE NOW TO BE HELD IN MARKS AND JANES TRUST". The appellant contended the document was void for uncertainty because it failed to specify the precise percentage division of shares between two distinct family settlements.

Delivering the leading judgment, Roddy Dunlop KC (with Jonathan Crow KC and Robert MacRae KC agreeing) dismissed the appeal. The Court of Appeal established that:

• The phrase "ARE NOW TO BE HELD" demonstrated an unequivocal, immediately effective intention to create a trust.
• Where no unequal division is specified, equity applies the maxim "equality is equity", holding the assets in equal 50/50 shares between the beneficiary trusts.
• Guernsey courts will adopt a pragmatic, purposive approach to construction to preserve private wealth arrangements rather than allowing technical drafting flaws to defeat settlor intent.

Key Takeaways for Fiduciaries:

• Validation of Informal Instruments: Trustees and estate planners should note that Guernsey law will enforce informal or historical trust notes provided the "three certainties" (intention, subject matter, and object) can be objectively deduced.
• Non-Financial Trust Benefit: This works alongside the Royal Court's ruling in In the matter of the X Trusts [2026] GRC 034, which blessed a £192m trust "onshoring" to the UK tax regime based purely on the ethical and moral desires of beneficiaries to pay UK tax.
• Sources: Access Ogier’s case commentary on the Guernsey Court of Appeal Trust Declaration Judgment and Bedell Cristin's review of Royal Court of Guernsey Blesses Onshoring of Trusts.