The Court of Appeal has handed down a landmark judgment in M v. St Anne’s Trustees Limited, in which Carey Olsen acted for the trustee. Setting aside the first instance decision, the Court of Appeal has provided welcome clarification of the application of the so-called rule in Hastings-Bass in Guernsey law.
The decision is important as it is the first time that the Guernsey Court of Appeal has considered the scope of the rule under Guernsey law, and the extent to which it will follow the English law position as established by the UK Supreme Court in Pitt v. Holt. Notably the Court of Appeal has departed from the strict requirement set out in Pitt v. Holt for there to be a breach of fiduciary duty, finding that a breach of duty, whether fiduciary or not, will suffice as long as it is of sufficient seriousness for the Court to exercise its discretion. Whilst the Court of Appeal considered that the scope of the rule in Hastings Bass applies in Guernsey to “like effect” as in England, the door remains open to further adaptation of the rule by the Guernsey Courts.