Discretionary trusts containing AXA offshore bonds were valid even though AXA later refused to recognize them due to a string of documentation defects, the England and Wales High Court (EWHC) has ruled.

Michael and Ann Bowack paid a financial planner to establish the Isle of Man trusts in early 2014, each putting in GBP325,000 for the issue of the bond. They both executed standard form declarations of trust appointing themselves and their daughter Claire Saxton as trustees, with the latter as principal beneficiary.

However, when the documents were forwarded to AXA Isle of Man, it noted that Claire's signature on the trust forms had not been witnessed by an independent person. It also turned out that the declarations of trust as executed left the effective date blank and failed to identify the trust property as the two bonds. Even so, AXA cashed the two cheques it had received in payment for the bonds, and duly issued the bonds, which were subject to Manx law and only assignable with the company's agreement.

A long correspondence ensued to try to set matters right. Ultimately, in the face of AXA's resistance, the Bowacks resorted to the courts, formally suing their own daughter to establish the validity of their estate plan. The case was heard by Matthews J, who, although criticising the handling of the paperwork, decided that none of the defects destroyed the arrangement. ...