XN000022-1989-11-15 — Page 6

T

WEDNESDAY, NOVEMBER 15, 1989

'IT WAS TO AVOID THIS AND OTHER DIFFICULTIES THAT THE UNITED KINGDOM PROMOTED THE NEGOTIATION BY THE HAGUE CONFERENCE OF A CONVENTION WHICH. IN EFFECT, ALLOWS US TO EXPORT TO CIVIL LAW COUNTRIES. FIRST THE CONCEPT OF A TRUST; SECONDLY, OUR RULES LAYING DOWN THE LAW WHICH GOVERNS SUCH A TRUST, AND THIRDLY, THE CIRCUMSTANCES IN WHICH IT SHOULD BE RECOGNISED. THE CONVENTION WILL THUS PRINCIPALLY BE OF BENEFIT TO THE COMMON LAW COUNTRIES SUCH AS ENGLAND AND WALES.'

OBVIOUSLY, FOR ENGLAND AND WALES WE SUBSTITUTED FOR THE PRESENT PURPOSES HONG KONG, MR STOCK SAID.

OF

"PERHAPS WE MIGHT PAUSE TO REFLECT THAT IF WE HAVE IT AS WRONG AS IS SUGGESTED, BY REFERENCE TO THE SPEECH OF THE LORD CHANCELLOR THE DAY, WE ARE IN ILLUSTRIOUS COMPANY INDEED," HE NOTED.

FOR

MR STOCK SAID THIS EXPLAINED THE UTILITY OF THE CONVENTION COMMON LAW COUNTRIES. FURTHERMORE, THE COURTS OF THOSE CIVIL LAW COUNTRIES WITHOUT COURTS OF EQUITY WHO WERE PARTIES TO THE CONVENTION WOULD BY VIRTUE OF THE CONVENTION

AND ENFORCE TRUSTS TO WHICH THE CONVENTION APPLIED, HE SAID.

RECOGNISE

IT HAD BEEN SAID THAT A TRUST WAS INAPPROPRIATELY DEFINED IN THE CONVENTION AND THE EXAMPLE WAS GIVEN OF A CUSTOMER ENTRUSTING HIS SUITS TO A DRY CLEARNER.

"BUT IN SO DOING, TITLE TO THE SUITS DOES NOT STAND IN THE NAME OF THE DRY CLEANER AND THE RELATIONSHIP DOES NOT THEREFORE HAVE THE CHARACTERISTICS OF A TRUST UNDER ARTICLE 2 OF THE CONVENTION,"

MR STOCK SAID.

THE NEXT CRITICISM WAS THAT THE EXISTING TRUST LAW WAS REPLACED BY THE CONVENTION.

"I GATHER THAT THIS ARGUMENT PROCEEDS UPON THE PREMISE THAT THE ENACTMENT OF THE BILL WILL SIGNIFICANTLY AFFECT SUBSTANTIVE DOMESTIC HONG KONG LAW BY PROVIDING A COMPREHENSIVE CODIFICATION OF THE LAN OF TRUSTS WHICH WILL REPLACE ALL EXISTING TRUST LAW,' MR STOCK SAID.

*

"BUT THAT ARGUMENT IGNORES THE PROVISIONS OF CHAPTER II OF THE CONVENTION TO WHICH THIS BILL GIVES THE FORCE OF LAW,

"WHILST IT COULD BE ARGUED THAT ARTICLE 1 OF THE CONVENTION AMBIGUOUS IF READ IN ISOLATION, CHAPTER II OF THE CONVENTION MAKES QUITE CLEAR THAT THE PHRASE 'THE LAW APPLICABLE TO TRUSTS' MEANS LAW BY WHICH THE TRUST IS GOVERNED, AND THAT THE CONVENTION PURPORT TO BE AN EXHAUSTIVE STATMENT OF THE LAW ITSELF.

IS

IT

THE DOES NOT

"THE CONVENTION SPECIFIES UNDER ARTICLE 6 THAT A TRUST SHALL BE GOVERNED BY THE LAW CHOSEN BY THE SETTLOR SO THAT, FOR EXAMPLE, IF A SETTLOR EXPRESSES A TRUST TO BE GOVERNED BY ENGLISH LAW THEN IN ANY CONVENTION COUNTRY, THE APPLICABLE LAW OF THAT TRUST WILL BE ENGLISH

LAW.

/IN THE