03 August 2026
An unwritten rule: The Guernsey Court of Appeal on informal trust declarations and the presumption of equality
Exploring Offshore Litigation
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A handwritten note, a single sentence long, with no witness, no signature block, and no mention of how property should be divided. Can such a document constitute a valid declaration of trust? The Guernsey Court of Appeal has confirmed that it can.
In Ashdown v Fraser, the Court of Appeal dismissed an appeal against a Royal Court decision upholding the validity of a handwritten document by which a settlor declared the shares in a family company to be held for two trusts, without specifying the proportions in which each trust was to benefit. The decision offers useful clarification on the doctrine of certainty of subject matter, as well as guidance on how informal trust instruments ought to be construed, and how the venerable equitable maxim that equality is equity continues to do meaningful work in modern trust litigation.
Victor Ashdown (the Settlor) was a successful businessman who held the entire issued share capital of Sylvan Holdings Limited, comprising 100 shares. He had two children, Mark and Jane. During his lifetime he established a number of professionally drafted family trusts, including the Victor Ashdown Trust for Mark (established in 1989) and the Victor Ashdown Guernsey Settlement for Jane (established in March 1994). On 9 August 1994, the Settlor wrote the following by hand:
"TO WHOM IT MAY CONCERN THE SHARES IN SYLVAN HOLDINGS LTD ARE NOW TO BE HELD IN MARKS AND JANES TRUST [sic]" (the 1994 Document).
A contemporaneous trustees' meeting minute recorded the settlement of shares into trust on the same date, though the minute did not itself identify which trust or trusts were intended nor any proportionate division between them.
The Settlor never transferred legal title to the shares. In 2015, he executed a stock transfer form transferring them into Mark's name. The 1994 Document was not discovered until April 2022, shortly before the Settlor's death. What followed was a dispute between Mark (executor and personal beneficiary of Mark's Trust) and Jane (supported by the trustees of Jane's Trust) as to the effect, if any, of the 1994 Document.
Mark (the Appellant) argued that the document was not a valid declaration of trust; at best it was an aide-mémoire or statement of future intention. In the alternative, he argued that it was void for uncertainty of subject matter: the document said nothing about how the shares were to be divided between the two trusts, and that silence was fatal.
Jane (the First Respondent) resisted, contending that the 1994 Document constituted a valid declaration of trust over all 100 Sylvan shares in favour of both trusts, in equal proportions.
At first instance in the Royal Court, the Deputy Bailiff at first instance upheld the declaration, finding that a "reasonable person would infer" equal division. The Royal Court granted leave to appeal on three grounds:
the methodology used (the "reasonable person" formulation);
certainty of subject matter; and
the construction of the 1994 Document as a present declaration for two trusts in equal shares.
The Court of Appeal dismissed the appeal on all three grounds.
The Court rejected the argument that the 1994 Document was merely a note to self or a statement of possible future intention. The critical words, "ARE NOW TO BE HELD", were found to be strongly indicative of present intention, not aspiration. Relying on the Privy Council's decision in Choithram (T) International SA v Pagarini, the Court emphasised that informality does not negate legal effect where the intention to declare a trust is sufficiently clear: equity "will not strive officiously to defeat a gift." The contemporaneous trustees' minute further reinforced the conclusion that the Settlor intended a present settlement.
The Court also dealt squarely with the argument that the Settlor's subsequent conduct, including his failure to act on the document and his later transfer of the shares to Mark in 2015, undermined the declaration. It held that this was of "questionable relevance, an...
In Ashdown v Fraser, the Court of Appeal dismissed an appeal against a Royal Court decision upholding the validity of a handwritten document by which a settlor declared the shares in a family company to be held for two trusts, without specifying the proportions in which each trust was to benefit. The decision offers useful clarification on the doctrine of certainty of subject matter, as well as guidance on how informal trust instruments ought to be construed, and how the venerable equitable maxim that equality is equity continues to do meaningful work in modern trust litigation.
Victor Ashdown (the Settlor) was a successful businessman who held the entire issued share capital of Sylvan Holdings Limited, comprising 100 shares. He had two children, Mark and Jane. During his lifetime he established a number of professionally drafted family trusts, including the Victor Ashdown Trust for Mark (established in 1989) and the Victor Ashdown Guernsey Settlement for Jane (established in March 1994). On 9 August 1994, the Settlor wrote the following by hand:
"TO WHOM IT MAY CONCERN THE SHARES IN SYLVAN HOLDINGS LTD ARE NOW TO BE HELD IN MARKS AND JANES TRUST [sic]" (the 1994 Document).
A contemporaneous trustees' meeting minute recorded the settlement of shares into trust on the same date, though the minute did not itself identify which trust or trusts were intended nor any proportionate division between them.
The Settlor never transferred legal title to the shares. In 2015, he executed a stock transfer form transferring them into Mark's name. The 1994 Document was not discovered until April 2022, shortly before the Settlor's death. What followed was a dispute between Mark (executor and personal beneficiary of Mark's Trust) and Jane (supported by the trustees of Jane's Trust) as to the effect, if any, of the 1994 Document.
Mark (the Appellant) argued that the document was not a valid declaration of trust; at best it was an aide-mémoire or statement of future intention. In the alternative, he argued that it was void for uncertainty of subject matter: the document said nothing about how the shares were to be divided between the two trusts, and that silence was fatal.
Jane (the First Respondent) resisted, contending that the 1994 Document constituted a valid declaration of trust over all 100 Sylvan shares in favour of both trusts, in equal proportions.
At first instance in the Royal Court, the Deputy Bailiff at first instance upheld the declaration, finding that a "reasonable person would infer" equal division. The Royal Court granted leave to appeal on three grounds:
the methodology used (the "reasonable person" formulation);
certainty of subject matter; and
the construction of the 1994 Document as a present declaration for two trusts in equal shares.
The Court of Appeal dismissed the appeal on all three grounds.
The Court rejected the argument that the 1994 Document was merely a note to self or a statement of possible future intention. The critical words, "ARE NOW TO BE HELD", were found to be strongly indicative of present intention, not aspiration. Relying on the Privy Council's decision in Choithram (T) International SA v Pagarini, the Court emphasised that informality does not negate legal effect where the intention to declare a trust is sufficiently clear: equity "will not strive officiously to defeat a gift." The contemporaneous trustees' minute further reinforced the conclusion that the Settlor intended a present settlement.
The Court also dealt squarely with the argument that the Settlor's subsequent conduct, including his failure to act on the document and his later transfer of the shares to Mark in 2015, undermined the declaration. It held that this was of "questionable relevance, an...