PART VIII - Special Provisions
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Determination of proper law of trust |
80. |
(1) |
The proper law of a trust or a particular aspect of a trust is |
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(a) |
the law of the jurisdiction expressly designated by the terms of the trust
as being the law that is to govern the trust or the particular aspect of the
trust, as the case may be; |
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(b) |
if the terms of the trust do not expressly designate the governing law for
the trust or the particular aspect of the trust, then the law of the
jurisdiction that may reasonably be inferred from the terms of the trust as
being the aw that is to govern the trust or the particular aspect of the
trust, as the case may be; or |
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(c) |
if the terms of the trust do not expressly designate the governing law for
the trust or the particular aspect of the trust and no reasonable inference
may be drawn from the terms of the trust as to the governing law, then the
law of the jurisdiction with which the trust at the time it was created had
the closest connection. |
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(2) |
For the purposes of paragraph (c) of subsection (1) in ascertaining the law
with which a trust is most closely connected at the time it was created
reference shall be made in particular to |
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(a) |
the place of administration of the trust designated by the settlor; |
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(b) |
the situs of the assets of the
trust; |
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(c) |
the place of residence or business of the trustee; and |
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(d) |
the objects of the trust and the places where they are to be fulfilled. |
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Change of proper law |
81. |
(1) |
If the terms of the instrument creating a trust so provide, the proper law
of the trust may be changed from the law of the Territory to the law of
another jurisdiction, or from the law of another jurisdiction to the law of
the Territory, provided that in the case of a change from the law of the
Territory the new proper law would recognize the validity of the trust and
the respective interests of the beneficiaries. |
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(2) |
A change in proper law shall not affect the legality or validity of, or
render any person liable for, anything done before the change. |
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(3) |
Without limiting or affecting subsection (2), the instrument creating a
trust may provide that |
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(a) |
the proper law be changed to that of any other jurisdiction specified in the trust; or |
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(b) |
the trust assets be transferred to a trustee in that other jurisdiction, |
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upon the occurrence of
any event, other than any of the events described in subsection (4), which
is specified in the trust instrument. |
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(4) |
The events referred to in subsection (3) are |
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(a) |
an order of the Court; |
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(b) |
the institution of criminal proceedings against the settlor, the trustees or
any of the beneficiaries; and |
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(c) |
an investigation in relation to the settlor, the trustees, any of the
beneficiaries of the trust or any part of the trust property by the
Financial Services Commission pursuant to any enactment. |
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Jurisdiction of court |
82. |
The court has jurisdiction where |
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(a) |
the proper law of a trust or a particular aspect of a trust is the law of
the Territory; |
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(b) |
the trustee of any trust is resident in the Territory; |
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(c) |
in the case of a corporate trustee of any trust, it is incorporated or
registered to do business in the Territory; |
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(d) |
any trust property is situate in the Territory but only in respect of
property so situate; |
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(e) |
the administration of any trust is carried on in the Territory; |
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(f) |
the Court is otherwise the natural forum for the litigation |
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(g) |
the parties submit to the jurisdiction of the Court; or |
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(h) |
the trust instrument contains a provision referring disputes to the
jurisdiction of the Court. |
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Proper law to determine disposition of personal property |
83. |
(1) |
If a person transfers or disposes of personal property to the trustee of a
trust |
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(a) |
he shall be deemed to have had capacity to do so if he is at the time of
such transfer or disposition of full age and of sound mind under the law of
his domicile; and |
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(b) |
no rule relating to inheritance or succession of the law of his domicile
shall affect any such transfer or disposition or otherwise affect the
validity of such trust. |
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(2) |
For the avoidance of doubt it is declared that the provisions of this
section shall apply notwithstanding any other provisions of this Part and
shall apply only to transfers or dispositions of property made to a trustee
of a trust after the commencement of this Part, but this declaration shall
be without prejudice to the validity or otherwise of transfers or
dispositions made before that time. |
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(3) |
This section shall only apply to trusts created before the date on which
section 83A comes into force. |
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Conflict of laws rules for certain trusts and dispositions.
First Schedule |
83A. |
(1) |
In this section and the First Schedule, unless the context otherwise
requires |
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"disposition", in relation to any property, includes every form of
conveyance, transfer, assignment, lease, license, mortgage, charge, pledge,
encumbrance or other transaction of that property or by which any interest
in it is created or extinguished; |
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"foreign law" means the law of any part of the world outside the Territory,
other than a provision in an Act of the Parliament of the United Kingdom, or
any enactment made under such Act, which extends to the Territory as part of
the law of the Territory; |
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"Hague Trusts Convention" means the Convention on the Law Applicable to
Trusts and on their Recognition, as applicable to the Territory by virtue of
the Recognition of Trusts Act 1987 (Overseas Territories) Order 1989; |
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"heirship rights" means any right, claim or interest in, against or to
property of a person arising, accruing or existing in consequence of, or in
anticipation of, that person's death, other than any such right, claim or
interest created by will or other voluntary disposition by such person or
resulting from an express limitation in the disposition of the property to
such person; |
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"judgement" means any judgement or award of arbitration given by a court,
tribunal or arbitrator in any part of the world, whatever the judgement or
aware may be called, including a decree, order, decision or writ of
execution, as well as the determination of costs or expenses by an officer
of the court or by a tribunal or arbitrator; |
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"personal relationship" includes every form of relationship by blood or
marriage, including former marriage, and, in particular, a personal
relationship between two persons exists if |
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(a) |
one is the child of the other, natural or adopted (whether or not the
adoption is recognised by law), legitimate or illegitimate; |
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(b) |
one is married to the other (whether or not the marriage is recognised by
law); |
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(c) |
one cohabits with the other or so conducts himself in relation to the other
as to give rise in any jurisdiction to any rights, obligations or
responsibilities analogous to those of a parent and child or husband and
wife; or |
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(d) |
personal relationship exists between each one of them and a third person; |
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"settlor", in relation to a trust, includes every person who, directly or
indirectly, on behalf of himself or on behalf of any other, as owner or as
holder of a power in that behalf, makes a disposition of property to be held
in that trust or declares or otherwise creates such trust; |
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"terms" includes express and implied terms; |
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"Virgin Islands trust" means a trust the essential validity of which is, for
the time being, governed by the law of the Territory and which is |
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(a) |
created on or after the date on which this section comes into force; or
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(b) |
created before the date on which this section comes into force, but the
proper law of which has been changed to the law of the Territory after that
date in accordance with section 81; |
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(2) |
For the purposes of this section and the First Schedule, no change in
circumstances causes a personal relationship, once established, to
terminate. |
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(3) |
In the definition of "Virgin Islands trust" in subsection (1), subsections
(9) and (12) and items 2, 3, 4(1A) and 7 of the First Schedule, "law"
excludes choice of law rules, but otherwise in this section and the First
Schedule, where the context so admits, "law" includes choice of law rules. |
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(4) |
In subsection (11), "internal law" excludes choice of law rules. |
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(5) |
For the purposes of identifying the law applicable under this section and
the First Schedule, the Territory shall be treated as a State and where a
State comprises more than one territorial unit, each of which has its own
rules of law, each territorial unit shall be treated as a State. |
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(6) |
Without prejudice to subsections (13) to (18), in ascertaining whether a
trust has been completely constituted, the preliminary issues referred to in
Article 4 of the Hague Trusts Convention shall be determined, to the extent
so provided, in accordance with subsections *7) to (11) and the First
Schedule. |
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(7) |
The formal and essential validity of a disposition, not being a testamentary
disposition, of immovable property or tangible movable property, and the
capacity to make the disposition, shall be determined according to the law
of the State in which the property is situated at the time of the
disposition. |
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(8) |
The formal and essential validity of a disposition, not being a testamentary
disposition, of tangible movable property, and the capacity to make the
disposition, shall be determined in accordance with the First Schedule, or,
in the case of intangible movable property not provided for in the First
Schedule, in accordance with the law under which the property came into
existence. |
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(9) |
The capacity to subject property to a trust, not being a testamentary trust,
as distinct from the capacity to dispose of that property, shall be
determined in accordance with the law governing the essential validity of
the trust. |
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(10) |
Where a person declares a trust of his own property, there shall be no
requirement for compliance with the rules on formal or essential validity or
capacity applicable to a disposition of that property or of any interest in
it. |
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(11) |
Where, under subsections (6) to (10) and the First Schedule, an issue falls
to be determined by the law of the Territory, the choice of law rules of the
Territory shall designate the internal law of the Territory to determine the
issue. |
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(12) |
Subject to subsections (6) to (11) and the First Schedule, all questions
arising in regard to the validity, construction, effect or administration,
whether the administration is conducted in the Territory or elsewhere, of a
trust including |
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(a) |
question relating to any of the following matters, being matters specified
in Article 8 of the Hague Trusts Convention |
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(i) |
the appointment, resignation and removal of trustees, the capacity to act as
a trustee, and the devolution of the office of trustee; |
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(ii) |
the rights and duties of trustees among themselves; |
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(iii) |
the right of trustees to delegate in whole or in part the discharge of their
duties or the exercise of their powers; |
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(iv) |
the powers of trustees to administer or to dispose of trust assets, to
create security interests in the trust assets, or to acquire new assets; |
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(v) |
the powers of investment of trustees; |
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(vi) |
restrictions upon the duration of the trust, and upon the power to
accumulate the income of the trust; |
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(vii) |
the relationships between the trustees and the beneficiaries including the
personal liability of the trustees to the beneficiaries; |
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(viii) |
the variation or termination of the trust; |
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(ix) |
the distribution of trust assets; |
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(x) |
the duty of trustees to account for their administration; and |
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(b) |
the the extent that they do not fall under paragraph (a), questions as to |
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(i) |
the fiduciary or non-fiduciary powers, obligations or duties of the trustees
or to the liabilities or rights of the trustees; |
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(ii) |
the existence and extent of powers conferred or retained, including powers
to vary or revoke the trust and powers of appointment, and questions as to
the validity of any exercise of any such power; |
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are to be determined by the property law of the trust or, where there are
different proper laws for different aspects of the trust, the proper law
applicable to the area in which the question falls. |
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(13) |
Subject to any express provision to the contrary in the trust or
disposition, no Virgin Islands trust, and no disposition of property to be
held upon the trusts of such a trust, is void, voidable, liable to be set
aside or defective in any fashion, nor is the capacity of any settlor in
relation to the trust or disposition to be questions, nor is the trustee or
any beneficiary or other person to be subjected to any liability or deprived
of any right, by reason that |
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(a) |
the law of any foreign jurisdiction prohibits or does not recognise the
concept of a trust, or |
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(b) |
the Virgin Islands trust or the disposition |
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(i) |
avoids or defeats any right, claim or interest conferred by foreign law upon
any person by reason of a personal relationship to the settlor or by way of
heirship rights; or |
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(ii) |
contravenes any rule of foreign law or any foreign judicial or
administrative order or arbitration order or action intended to recognise,
protect, enforce or give effect to such a right, claim or interest. |
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(14) |
Heirship rights conferred by foreign law in relation to the property of a
living person shall be disregarded when determining rights of ownership of
property subject to, or claimed to be subject to, a Virgin Islands trust. |
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(15) |
Heirship rights conferred on persons by foreign law shall not be taken to
constitute those persons creditors for the purposes of section 81 of the
Conveyancing and Law of Property Ordinance, nor to constitute those persons
"creditors of others" for the purposes of the Act against Fraudulent Deeds,
Gifts, Alienations, etc. to the extent, if any, that that Act has any
application to the Territory. |
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(16) |
Subject to subsection (17), the law designated as applicable to succession
by virtue of the Territory's choice of law rules shall apply to a Virgin
Islands trust, not being a testamentary trust, only to the extent that it
does not contain rules conferring any right, claim or interest upon any
person by reason of a personal relationship to the settlor or by way of
heirship rights. |
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(17) |
Subsection (16) shall not apply where the law so designated is that of the
Territory. |
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(18) |
In the case of a conflict between any of the provisions of subsections (13)
to (17) and any of the provisions of subsections (6) to (11) and the First
Schedule, the provisions of subsections (13) to (17) shall prevail. |
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(19) |
To the extent that it is inconsistent with subsections (13) to (18), a
foreign judgement shall not be recognised or enforced or give rise to any
estoppel, and both its recognition and its enforcement shall be regarded as
contrary to the public policy of the Territory. |
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(20) |
Subsections (6) to (12) apply only to trusts created on or after the date on
which this section comes into force.
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Purpose trusts |
84. |
(1) |
For the purpose of this section |
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(a) |
"designated person" means |
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(i) |
a barrister or solicitor practising in the Territory, |
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(ii) |
an accountant practising in the Territory who qualifies as an "auditor" for
purposes of the Banks and Trust Companies Act, 1990, |
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(iii) |
a licensee under the Banks and Trust Companies Act, 1990, or |
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(iv) |
such other person as the Minister of Finance may by order designate; and |
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(b) |
"trust for any purpose" means a trust other than a trust |
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(i) |
that is for the benefit of particular persons whether or not immediately
ascertainable, or |
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(ii) |
that is for the benefit of some aggregate of persons ascertained by
reference to some personal relationship. |
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(2) |
A person may create a valid trust for any purpose, whether charitable or
not, if |
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(a) |
the purpose is specific, reasonable and possible; |
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(b) |
the purpose is not immoral, contrary to public policy or unlawful; |
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(c) |
at least one trustee of the trust is a designated person; |
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(d) |
the trust instrument appoints a person, who may be a protector, to enforce
the trust and provides for the appointment of a successor to such person; |
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(e) |
the person appointed to enforce the trust is a party to the trust instrument
or consents in writing, addressed to the trustee who is a designated person,
to enforce the trust; and |
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(f) |
the trust instrument specifies the event upon the happening of which the
trust terminates and provides for the disposition of surplus assets of the
trust upon its termination. |
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(3) |
The rule against perpetuities and remoteness of vesting shall not apply to a
trust to which subsection (2) applies and, for the avoidance of any doubt,
the rule against perpetuities and remoteness of vesting includes the rule
against inalienability, the rule against perpetual trusts, any rule
prohibiting a trust under which trust property would, apart from that rule,
be inalienable beyond a permissible period, and any rule prohibiting a trust
or power under which trust property would, apart from that rule, be capable
of application for a purpose beyond a permissible period. |
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(4) |
Nothing in this section shall affect the existing law with respect to trusts
established for charitable purposes. |
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(5) |
Where a trustee who is a designated person has reason to believe that a
person who is appointed to enforce the trust is dead, is unwilling, refuses
or is unfit to act or is incapable of acting, then that trustee shall as
soon as practicable inform the Attorney General in writing of the fact and
send him a copy of the instrument creating the trust. |
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(6) |
The Attorney General on being informed under subsection (5) shall within90
days apply for the appointment of a person to enforce the trust and the
court may, unless it feels that the person is not fit, by order declare that
person to be the person to enforce the trust. |
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(7) |
The order of the court under subsection (6) is conclusive evidence of the
appointment of the person to enforce the trust and the appointment takes
effect as from the date of the order. |
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(8) |
Where any costs are incurred by the Attorney General in connection with any
application under subsection (6), the court may make such order as it
considers just as to the payment of those costs out of the assets of the
trust. |
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(9) |
Where a designated person fails to comply with subsection (5), then, subject
to subsection (10), the designated person is guilty of an offence and is
liable on summary conviction to a fine of not more than $5,000. |
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(10) |
It shall be a defence to a charge of committing an offence under subsection
(9) to prove that the designated person took all reasonable steps and
exercised all due diligence to avoid committing the offence. |
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(11) |
The person appointed pursuant to paragraph (d) of subsection (1) shall be
entitled, in addition to any documents, information or other rights
specifically provided for in the trust instrument, to |
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(a) |
annual accounts of the trust; |
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(b) |
copies of the trust instrument and deeds and other written instruments
executed pursuant to the trust instrument; |
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