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by Adair Dyer J.D. LL.M.
Although the trust concept may be an unknown legal institution
in many countries practitioners, notaries and judges in those countries may be
faced with questions involving trusts created in a jurisdiction in which trusts
form an integral part of the legal system.1
The most significant event in the development of the
international recognition of trusts is the Hague Convention of 1st July 1985 on
the Law Applicable to Trusts and on their Recognition. In connection with the
convention there are two very recent events to note. Appearing in the status
table of the signatures, ratifications and accessions to this Convention there
are two additional countries which recently have become parties. One of these,
the Netherlands, is a civil law non-trust country, which ratified the
Convention on 28th November 1995 and for which the Convention entered into
force on 1st February 1996. The second, Malta, a country which has trusts,
deposited its instrument of accession in December 1994 and, following a delay
period which ended on 31st December 1995, the Convention entered into force for
Malta on 1st March 1996. These two additions to the States which are parties to
the Convention are, of course, incremental and the number of countries which
have adopted the Convention remains relatively small at six countries. These
already include both trust and non-trust jurisdictions with, on the one hand,
the United Kingdom, and many of the jurisdictions for which it handles foreign
relations (including Jersey, Guernsey, Gibraltar, Hong Kong and the Isle of
man), the six states of Australia and in seven Canadian Provinces, and Italy on
the other. France, Luxembourg and the United States have signed the Convention
but have not yet ratified it. The crossing of the dividing line between
countries with civil law systems and countries with common law systems is a
difficult step to achieve for many of the Hague Conference's Conventions and
particularly for one involving a legal institution unknown in the civil law
countries. Viewed in the light of these difficulties, which have not been tackled
before, the progress of the Convention is already remarkable.
The
Trust Distinguished
What is it then that distinguishes the trust from
other institutions which are designed to operate for fiduciary purposes? Before
attempting to discuss this question, which is incorporated in the Hague
Convention, I would like to pick up five questions, for the purpose of analysis
of whether a particular jurisdiction operates a "trust" concept
within its borders. The questions have been suggested by Professor Waters in his
course at the Hague Academy of International Law.2
(1) Does the fiduciary have full title to the
fiduciary property, or does he merely have possession, detention, or some
lesser right of that kind?
(2) Does the beneficiary of the relationship have a real
(or in rem) interest in the trust property so
that he can trace that property into the hands of third parties and through the
third party into the hands of subsequent transferees, or has he the right only
to sue the trustee and thereby assert an in person- am interest in the
fiduciary property?
(3) Though the fiduciary has full title to the trust
property, is that property free from the claims of the trustee's personal
creditors?
(4) Is the fiduciary free of any obligation to accept
the instructions of the creator of the fiduciary relationship after the trust
has been created?
(5) Is the fiduciary free of the ability of the
beneficiary to instruct him (the fiduciary) how the fiduciary is to act,
regardless of the language of the fiduciary instrument?
As far as English law is concerned the trust has
simply grown by accretion, including the influence of occasional statutes. It
grew from the fact that at a certain time in English legal history the King's
Chancellor became willing to accept and act on pleas for relief based on the
allegation that the petitioner's remedy at law in the Royal Courts was not
adequate. When this grew into an established practice it resulted in a separate
system of courts alongside the Royal Courts known as the Courts of Equity or
Chancery, with access to these courts normally depending on a claim that the
remedy at law was not adequate.
So far as trusts are concerned the legal principles
applied by the Courts of Chancery, known as "equity", constituted a
willingness to order a person who has received property for fiduciary purposes,
that is to be held and possibly administered for the benefit of a third person
or persons, to carry out the trust which that person has accepted. The
establishing of the trust in English law therefore depended on this power of
the special Courts of Chancery to issue and enforce instructions personally
directed to a trustee that he or she shall carry out the trust. Now the
principles are applied by all English Courts, although matters concerned with equity
and trusts are concentrated in the Chancery Division of the High Court. This
means that the court applying the principles of equity may direct where it
considers it to be necessary or appropriate that the trustee should submit
accounts for property received and for the administration and revenues of that
property.
The English law of trusts grew by accretion and,
following the industrial revolution, it became a useful vehicle for the
carrying out of many diverse purposes. These included charitable and family
purposes, the creation of a business entity (the so-called
"Massachusetts" trust in the United States, developed in the
nineteenth century), the formation of holding companies to concentrate the
control of the stock of several corporations (the source of the so-called
"anti-trust" laws in the United States, beginning in the late
nineteenth century), and real estate investment trusts (to avoid limitations on
ownership of land by incorporated companies). We now see, on the one hand,
massive pension funds and investment trusts and those savings schemes known in
Britain as "unit trusts", many of which are structured using the
traditional trust mechanism, whilst, on the other hand, we see large amounts of
debt structured and collateralised by "trust
indentures".
Ownership
of Property and Trusts
Outside observers, in trying to characterise
the trust, have tended to focus on the idea of "dual ownership"
following the terms, (sometimes loosely used in common law jurisdictions
themselves): "legal ownership" and "beneficial ownership".
My own view is that this analysis is deceptive - a red herring which draws the
attention away from the trust's essential characteristics. It is an analysis
which is more comfortable for civil lawyers to use than to try to grasp the
trust's characteristics detail by detail. But the problem is, as I see it, that
unlike the civil law, there is no real concept of "ownership" in
English law. Most civil law systems have a comprehensive concept of ownership,
while in Anglo-American law the bottom line in litigation over property is not
whether one party owns the property in a comprehensive and theoretical sense,
but rather which party can assert a better title in a court of law or equity.
This situation has led some analysts to view the law
of trusts as being essentially an extension of the law of remedies. To me this
also seems too much of a simplification, despite the fact that equitable
remedies are essential to the operation of the trust mechanism. Here we may
distinguish "constructive" trusts, which, in the Anglo/American view,
are largely remedial in nature but which are purely fictional and imposed by
the court, as far as any fiduciary element is concerned, from voluntary trusts
where the trustee has accepted a fiduciary relationship. This is why the
so-called "gateway" definition, used in the Hague Convention, which
applies only to voluntary trusts, talks of relationships and title rather than
ownership or remedies (see below).
The trust mechanism, therefore, does not consist of a
conscious fracturing of the total ownership between legal and equitable
ownership. It is rather a division between control of the property, normally
represented by the legal title held in the trustee, and the ultimate rights to
its fruits. These rights may be split up in time, so that they arise or cease
at some future time and, subject to various conditions, are sprinkled out
unequally amongst beneficiaries and otherwise shaped into forms which do not
seem compatible with any general theory of comprehensive ownership of property.
This division between control, or management, of property and the ultimate
right to its fruits also exists, for example, in the modern corporation in the
United States where the board of directors manages the property of the corporation
and the shareholders receive dividends, or their share upon liquidation of the
entity, but do not normally have a right to participate or interfere in the day
to day management. A major difference, of course, is that the title to the
assets being managed is in the corporate entity itself, while a trust remains a
set of relationships devoid of any requirement that an entity be involved. In
this connection it is worth noting that the responsibilities of the members of
the board of directors of a corporation in the United States have been very
consciously modelled on the fiduciary duties of a
trustee under traditional trust law.
The
Flexibility of the Trust
The flexibility of the trust device has greatly
increased the attractiveness of its utilisation on an
international scale under modern conditions where there is a relatively free
flow of capital from country to country and a greater mobility of the people
who control the capital. The reasons why the Hague Conference on Private
International Law took up work in the early 1980's on the preparation of a
Convention dealing with the law applicable to trusts and their recognition will
give a better understanding of what may reasonably be expected from the
Convention which emerged from the Conference's negotiations in 1984, and what
may not be reasonably expected of it.
Why
the Hague Conference prepared its Convention
The full legislative history of the Hague Trusts
Convention has been collected and published in a bound volume, Tome II of the
Proceedings of the Fifteenth Session held 8th-20th October 1984 edited by the
Permanent Bureau of the Conference and issued by the Government Printing Office
at The Hague in 1985.3
By the latter part of the 1970's the development of the
European Common Market revealed that civil law notaries in continental European
countries were being faced more and more with questions involving English and
American trusts. The attractiveness of the unified market meant that more and
more English or United States citizens settled in continental European
countries, such as France, and resided there for extended periods of time.
These expatriates acquired property in civil law countries and, when they die,
the property might fall into a trust created under the will of the deceased
person or pass by will into an inter vivos
trust created by the same person. The ownership categories and the land
registration systems of the civil law countries were not adapted to this
unknown form of property holding.
Conversely, with the expansion of the Common Market,
an increased number of citizens of civil law countries moved abroad to England
or the United States and settled there for extended periods of time. These
persons when they had acquired property in the territory of those common law
countries might make a will containing trust provisions in order to deal with
their properties in England or the United States and these trusts might
inadvertently apply to property owned or subsequently acquired by inheritance
in the civil law country of origin. The Hague Convention, therefore, was first
conceived as an instrument which would build a bridge between the common law
and the civil law countries, providing uniform rules as to the law which
applied to a trust and providing, for the civil law countries in particular,
rules for recognition of this unknown form of property holding and for giving
effect to the intent of the settlor of the trust, in
so far as was possible given the conceptual and technical differences between the
property systems of the different countries.
The Hague Conference's procedures for preparing an
international treaty, once the decision has been made to go forward with a
specific topic, is that the members of the Permanent Bureau prepare an
extensive research report on the comparative law aspects and on the conflict of
laws rules being used. The document mentioned above (footnote1),
The Report on Trusts and Analogous Institutions, is the first document in the
bound volume on this topic. Not only did this Report endeavour
to analyse the differences in the property systems,
it also developed a catalogue of the functional uses being made of the trust
mechanism in different countries, including those civil law countries which had
adopted the trust mechanism for certain limited purposes. Although, in the
beginning, it seemed that trusts created for the operation of a business, or
trusts created for charitable purposes, or especially trusts used to create
collateral security for a loan, might not fall easily within a convention
designed primarily for personal and family trusts, in the end the delegations
decided that all of these categories of trusts should, in principle, be
included since the trust institution under which they were all created involves
essentially the same elements. Only involuntary trusts, in particular those
known as "constructive" trusts, usually created by court order, were
expressly excluded from the scope of the Convention.4 The trusts
known as "asset protection" trusts were not a primary factor in the
minds of most of the participating delegations, yet, as will be seen from the
definition of a trust included in the Convention, this is flexible enough so
that asset protection trusts may benefit from the recognition provided for in
the Convention if they meet the characteristics set out in the five questions
posed by Professor Waters in his Hague Academy Course.
Let us then turn to the definition which appears in
Article 2 of the Hague Convention. As I indicated before, this has been referred
to as a "gateway" definition which means that it does not undertake
to provide a comprehensive definition of a trust, but rather to describe the
salient characteristics of a trust in order that the person using the
Convention - lawyer, judge or notary - may determine whether a specific set of
relationships is a trust for purposes of the Convention by comparing the
relationships with the characteristics described or set out in Article 2.
Definition
of Trusts in the Convention
Article 2 of the Convention states:
'For the purposes of this Convention, the term
"trust" refers to the legal relationships created - inter vivos
or on death - by a person, the settlor, when assets
have been placed under the control of a trustee for the benefit of a
beneficiary or for a specified purpose.
A trust has the following characteristics:
a) the assets constitute a separate
fund and are not a part of the trustee's own estate
b) title to the trust assets stands
in the name of the trustee or in the name of another person on behalf of
the trustee
c) the trustee has the power and the
duty, in respect of which he is accountable, to manage, employ or dispose
of the assets in accordance with the terms of the trust and the special duties
imposed upon him by law.
The reservation by the settlor
of certain rights and powers, and the fact that the trustee may himself have
rights as a beneficiary, are not necessarily inconsistent with the existence of
a trust.'
This definition, descriptive rather than
comprehensive, is suited to aid in the identification of an "unknown"
institution. The first paragraph refers to "legal relationships",
carefully avoiding any suggestion of division of ownership, focusing rather on
the factual element that "assets have been placed under the control of a
trustee for the benefit of a beneficiary or for a specified purpose". The
two key words here are "assets" and "control" since there
is no trust without assets and those assets must have been placed under the
control of a trustee.
Two factors helped to distinguish this institution
generally described from a contract of mandate or an agency relationship, for
example. The first is that there must be assets and not merely the power to
enter into contracts. The second is that the title to the trust assets stands
in the name of the trustee or in the name of another person on behalf of the
trustee. In countries which have the English-type trust a trusteeship relation
is easily distinguishable from an agency relationship. The first, a trust, depends
on the existence of assets and the holding of title or the right to take title
to the assets. The second, an agency, is a contractual relationship normally
terminable at will by the principal. If the agent acquires assets in his own
name, he does so on behalf of the principal and has a duty to transfer title to
those assets to the principal. If the agent does not perform this duty, a court
of equity may impose a "constructive trust" on the assets as a remedy
in order to ensure that the principal's interest in the assets is protected.
The "constructive" trustee has no right to manage the assets but
rather is under a duty to transfer title to the assets to the principal.
Before the preparation of the Hague Convention, courts
sometimes used the analogy of a contract in determining what rules applied to a
trust coming from another jurisdiction. The Hague Convention tries to
distinguish contracts carefully. Article 4, for example, states:
'The Convention does not apply to preliminary issues
relating to the validity of wills or of other acts by virtue of which assets
are transferred to the trustee.'
This provision makes it clear that although assets may
be transferred to a trustee by virtue of a contract, the contract itself is not
a trust and its validity is to be determined under the rules applicable to the
validity of a contract. In this connection the image which was used during the
negotiation was that the will or contract or deed under which a trust is set up
is the "launcher" while the trust itself is the "rocket"
which becomes separated from the launcher and takes on a life of its own. Thus
the conflict rules determining which law governs the validity of a trust may be
different from the conflict rules governing the validity of the will, contract
or deed under which the trust has been created.
Article 5 of the Convention provides as follows:
'The Convention does not apply to the extent that the
law specified by Chapter II does not provide for trusts or the category of
trusts involved.'
This provision makes it clear that, although a person
may theoretically try to draw up a trust governed by the law of France or the
Netherlands, the legal situation resulting from such an effort will not be a
trust within the scope of the Hague Convention. This is implicit in Chapter II
of the Convention on the law applicable to the trust, since Article 8 of that
chapter presents a "laundry list" of the types of issues which are
covered by the law applicable to a trust and it would be quite clear that the
law of France or the Netherlands would have no rules governing any of these
issues, in the absence of the Convention.
The conflict of laws rules applicable to trusts are
set out in Articles 6 and 7. Article 6 states the rule of party autonomy: the settlor may choose the law by which the trust is to be
governed but the article makes explicit the obvious limitation that if the settlor should choose a law which does provide for trusts
or the category of trusts involved, the choice shall not be effective. Article
7 states the broad principle that where no applicable law has been chosen, a
trust shall be governed by the law with which it is most closely connected. To
apply this rule for the "objective connecting factor" to ascertain
the law with which a trust is most closely connected, reference shall be made
in particular to:
(a) the place of administration of
the trust designated by the settlor,
(b) the situs
of the assets of the trust,
(c) the place of residence or
business of the trustee, and
(d) the objects of the trust and the
places where they are to be fulfilled.
This list of references is not intended to be
hierarchical nor is it intended to be exhaustive.
The flexibility provided for the courts to deal with
the objective connecting factor leaves a measure of uncertainty although the
nature of the trust, its assets and purposes will frequently easily show which
of these elements should be given the most weight. None the less, certainty can
be obtained by an express choice of the governing law by the settlor and, in cases where the choice is not express but
is obvious, it may be found to be "implied in the terms of the instrument
creating or the writing evidencing the trust, interpreted, if necessary, in the
light of the circumstances of the case." Articles 9 and 10 of the
Convention provide for splitting of a "severable aspect" of the
trust, for example, "matters of administration", to be governed by a
different law from that governing the validity, construction and effects of the
trust. Moreover, Article 10 provides for the possibility of replacing the
applicable law by another law.
Certain protective provisions were included in
Articles 13 and 15 in order to make sure that a contracting state would not
have to apply the provisions of the Convention in circumstances which would
cause complete disruption of the legal system of such a state. Nonetheless, the
second paragraph of Article 15 provides:
'If recognition of a trust is prevented by application
of the preceding paragraph, the court shall try to give effect to the objects
of the trust by other means.'
This provision preserves the option which has been
followed by some courts in the past of making an analogy or adaptation of a
trust in order to carry out its purposes. Thus the Convention gives priority to
recognition of the trust as a "sui generis" institution but
allows analogy of the trust to a contract of mandate or agency, for example if
its recognition as a trust is not feasible.
Article 18 includes the traditional provisions in
Hague Conventions which allow the Convention to be disregarded when its
application would be manifestly incompatible with public policy and Article 19
assures the tax authorities in the various states: "Nothing in the Convention
shall prejudice the powers of states in fiscal matters."
Article 24 of the Convention provides as follows:
'A State within which different territorial units have
their own rules of law in respect of trusts is not bound to apply the
Convention to conflicts solely between the laws of such units.'
This provision is intended to prevent the binding
application of the Convention's rules as to trusts which only involve different
states or provinces of a federation. However, in one federation which has
ratified the Convention, Australia, both the Law Reform Commission and the
leading expert on conflict of laws agree that the law as between the States of
the federation should be interpreted in conformity with the provisions of the
Convention.5 Thus the application of the Convention’s principles is
not necessarily limited to trust relationships actually covered by the treaty
but may well be applied by analogy in situations not covered by the binding
rules of the treaty.
Universality
of the Convention
The Convention's rules are universal and therefore in
principle cover all trusts which can be identified as trusts using the gateway
definition set out in Article 2, and which are governed under the Convention’s
rules by a law which provides for trusts or at least the category of trusts
involved. Thus the trust to be recognised under this
Convention does not have to come from a state which is a contracting state
under the convention, but may come from any state which has trusts.
This principle of universality is subject to two
exceptions. One is that under Article 21 of the Convention a contracting state
may reserve the right to apply the provisions of the Convention on recognition
only to trusts, the validity of which is governed by the law of a Contracting
State. Thus far no contracting state has made this reservation.
The other limitation is provided by Article 13 which
is a safeguard for countries which do not have trusts against having to recognise a trust created abroad where the beneficiaries
reside and the assets are located in that state. Article 13 states:
'No State shall be bound to recognise
a trust the significant elements of which, except for the choice of the
applicable law, the place of administration and the habitual residence of the
trustee, are more closely connected with States which do not have the
institution of the trust or the category of trust involved.'
This provision is not intended to apply to the basic
situations referred to earlier in this article as having given rise to the
project for drawing up a Hague Convention, these being situations in which the settlor of the trust resides in a jurisdiction which has
trusts but has property interests also in a country which does not have trusts
or the situation where a settlor resides in a country
which does not have trusts but is a citizen of and also owns property in a
country which does have trusts. The type of example given as justification for
the inclusion of Article 13 was, for example, a Frenchman living in France
having all of his property in France but attempting to set up a trust in that
property under the laws of another country with the trustee based in such other
country. No contracting state is bound to apply this provision. It is only an
option to be applied when the settlor, beneficiaries
and property are seen to have no real connection with the jurisdiction where
the trust is set up. It suggests that a significant part of the assets should
be located, or relocated, in the jurisdiction where the trust is to be
administered and where neither the settlor nor the
beneficiary resides.
The
Present Scope and the Future Utilisation of the
Convention
Aside from the factors mentioned above which involve
the growing overlap between the scope of trusts created by individuals and the
territory of jurisdictions which do not have trusts in their law, there was
another factor which encouraged the Hague Conference to undertake the
preparation of rules on the law applicable to trusts. This was the fact that,
following the entry of the United Kingdom, Denmark and Ireland into the
European Economic Community, a Convention was drawn up for the new members to
accede to the Convention of 27th September 1968 on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters (the
"Brussels Convention"). The Convention of 9th October 1978, which did
this, contained, among other changes, an amendment to Article 5 of the Brussels
Convention by adding para 6 on trusts. The Brussels
Convention was further amended when Greece entered the EEC and again, when
Spain and Portugal became members, (the "San Sebastian Convention").
Moreover, the Convention of Lugano, drawn up in 1988
to extend essentially the same system to link EEC countries with EFTA
countries, also contains the provision on trusts which was added by the
accession Convention of 1978.
Neither the Brussels nor the Lugano
Convention contains any definition of a trust, nor any restriction on the type
of trust to which its jurisdictional rules refer. Its language only implies
that the type of trust referred to involves settlors,
trustees and beneficiaries.
The Hague Conference concentrated on the distinctive
legal mechanism involved in the trusts and found that wherever this mechanism
occurred, it could and should, fall within the scope of the Convention. The
definition in Article 2 of the Convention makes it clear why this is so. It is
not intended to be a comprehensive definition, but rather to be a definition
which channels the user of the Convention in the direction of the essential
elements of a trust. It is a definition which applies without distinction to
family trusts, business and charitable trusts, trusts creating security
interests, pension trusts, unit trusts, real estate investment trusts, and
other forms of trusts not yet dreamed up by ingenious lawyers. It is this
universality of the trust mechanism which distinguishes it from the analogous
institutions such as foundations, which are utilised
in various countries to carry out the functions which may be carried out under
a trust in a trust jurisdiction. Generally speaking most of these institutions
are legal entities. Trusts, on the other hand, even though they are sometimes
referred to as if they were legal entities, are not such in law, but rather
consist of a set of legal relationships. This central point is reflected in
Article 5, para 6, of the Brussels and Lugano Conventions, which provides that a person domiciled
in a contracting state may in another Contracting state be sued:
'In his capacity as settlor,
trustee or beneficiary of a trust created by the operation of a Statute, or by
a written instrument, or created orally and evidenced in writing, in the courts
of the Contracting State in which the trust is domiciled ...'
As can be seen, there is no reference to suing the
"trust", but rather to suing one of the parties to the relationships
which constitute a trust.
The Brussels and Lugano
Conventions do not define what is the domicile of a trust. However, the Civil
Jurisdiction and Judgments Act 1982, by which the Convention was implemented in
the United Kingdom, includes a S 45(3), which defines the "domicile of a
trust" as follows:
'A trust is domiciled in a part of the United Kingdom
if, and only if, the system of law of that part is the system of law with which
the trust has its closest and most real connection.'
As can be seen, the terminology used in Article 5, para 6, of the Brussels/Lugano
Conventions and the terminology used in S 45, para
(3), of the Civil Jurisdiction and Judgments Act 1982 should mean that the
special jurisdiction as to trusts conferred by the Brussels and Lugano Conventions will, in the absence of a choice of law
by the settlor designating another state's law as
applicable, coincide with the state whose law will be applicable under the
objective connecting factor indicated by Article 7 of the Hague Trusts
Convention.
It should be remembered that the jurisdiction
permitted at the domicile of a trust under Article 5 of the Brussels, Lugano Conventions, co-exists with the provisions of
Article 17, which permit a trust instrument to confer jurisdiction on the
courts of a particular state (subject to an exclusive jurisdiction which might
exist under Article 16 of those Conventions). Also the general rule of the
Brussels Convention under Article 2 permits "persons domiciled in a
contracting state" to "be sued in the courts of that state".
Since the trust is not a legal entity, therefore, trustees, beneficiaries, and,
as the case may be, settlors may also be sued at
their respective domiciles.
The Brussels/Lugano system
will now be extended to all of the Member States of the European Union, as well
as to the remaining members of the European Free Trade Area (EFTA). The fact
that Article 5, para 6, implies that parties will
have private international law rules dealing with the law applicable to a
trust, or at least indicating the "domicile" of a trust, will be an
encouragement to these states to ratify the Hague Convention.
Moreover, as Professor David Hayton
stated at the ESC Conference on trusts held in Geneva on 15th November 1994:
'.. courts in civil law jurisdictions, whether or not
their governments have signed the Convention, are likely to rely heavily on the
collective wisdom embodied in the Convention for guidance when trying to
understand the essential characteristics of a trust when concerned with the
rights or powers within their jurisdictions of trustees, beneficiaries or settlors.'
Conclusion
The influence of the Hague Trusts Convention is not
limited to its concrete application in the countries which are parties to it.
Indeed, very little court practice seems to have developed in those countries
which have ratified. Yet for countries which have no private international law
rules for trusts, the Hague Convention offers the only analysis and set of
rules which have been negotiated in an international forum. Even in the common
law countries the precedents for determining the applicable law for a trust are
generally few and inconclusive.
Thus the influence of the Hague Convention upon
courts, lawyers and notaries should continue growing steadily, while its
attractiveness to legislators and governments will become more apparent as the
number of countries ratifying or acceding to it continues to increase.
Endnotes
1. See the "Report on
Trusts and Analogous Institutions", (1982) Hans van Loon, and Adair Dyer,
published in Tome II of the Proceedings of the Hague Conference's Fifteenth
Session,; October 1984, available from the Conference's Permanent Bureau.
2. For a more complete and fully
authoritative review of the historical development of trusts and their spread
around the world see the Course of Professor Donovan Waters entitled "The
Institution of the Trust in Civil and Common law", as published in Tome
252 of the Collected Courses of the Hague Academy of International Law (1995)
at pp 117-453. The appearance of this comprehensive Course by Professor Waters
is, in my opinion, one of the truly important recent events in trusts
literature.
3. The last document in this volume
is the Explanatory Report on the Convention by Professor A E von Overbeck, which has also been issued in an offprint
edition.
4. A state may, however, extend the
application of the Convention to such trusts by taking the option provided in
Article 20.
5. Australian Law Reform Commission
Report No. 58. Choice of Law, para 9.38 cited in P.E.
Nygh, Conflict of Laws in Australia, 6th Edition
1995, p518 footnote 42.
Adair Dyer
Hague Conference on Private International Law
Permanent Bureau
Scheveningseweg 6
2517 KT The Hague
Netherlands
Tel: +31 70 363 3303
Fax: +31 70 360 4867
CONVENTION ON THE LAW APPLICABLE TO
TRUSTS AND ON THEIR RECOGNITION
|
Member States |
Signature |
Ratification or Accession |
Entry into Force |
|
Australia |
17.10.91 |
17.10.91 |
01.01.92 |
|
Canada |
11.10.88 |
20.10.92 |
01.01.93 |
Upon ratification Canada declared that the Convention
shall extend to the following provinces: Alberta (with reservation under
Article 16, para 2), British Columbia, New Brunswick,
Newfoundland and Prince Edward Island and that it may modify this declaration
by submitting another declaration at any time. The Convention has been
extended to the Province of Manitoba (entry into force 1st July 1994), and the
Province of Saskatchewan (entry into force 1st September 1994). In
accordance with Article 20, the provisions of the Convention will be extended
to trusts declared by judicial decisions.
|
France |
26.11.91 |
|
|
|
Italy |
01.07.85 |
21.02.90 |
01.01.92 |
|
Luxembourg |
01.07.85 |
|
|
|
Netherlands |
01.07.85 |
28.11.95 |
01.02.96 |
|
United Kingdom |
10.01.86 |
17.11.89 |
01.01.92 |
Reservation under Article 16, para
2 (which allows a state to apply in exceptional circumstances the law of a
state other than the law of the forum which would otherwise be the applicable
law according to this Article). In accordance with Article 20, the
provisions of the Convention will be extended to trusts declared by judicial
decisions. Ratification also on behalf of: the Isle of Man, Bermuda,
British Antarctic Territory, British Virgin Islands, Falkland Islands,
Gibraltar, Saint Helena, Saint Helena Dependencies, South Georgia and the South
Sandwich Islands, United Kingdom Sovereign Base Areas of Akrotiri
and Dhekelia on the Island of Cyprus.
Extensions (subject to the reservation under Article
16 and the declaration under Article 20 made by the United Kingdom): the
Convention was extended to Hong Kong (entry into force 1st June 1990),
Montserrat (entry into force 1st April 1991), the Bailiwick of Jersey (entry
into force 1st March 1992), the Island of Guernsey (but not the Islands of Alderney and Sark) and the Turks
and Caicos Islands (entry into force 1st July 1993)
|
United States |
13.06.88 |
|
|
|
Malta |
Accession |
31.12.95 |
01.03.96 |