<i>Re Esteem</i> : not the last word on whether the test for sham in trusts is bilateral or unilateral

Abstract In Re Esteem, the Royal Court of Jersey appeared to answer the question whether the test for sham in trusts is bilaterial or unilateral. This decision has been followed in various cases. However, in Taylor v Savik HHJ Matthews questions the bilateral conception of sham. Upon closer inspection, the more principled position is that only the settlor’s intentions are relevant. HHJ Matthews shows that the engine of sham is a pretence; misleading third parties is the consequence of this. Therefore we share HHJ Matthews' doubt whether dishonesty is an essential ingredient. If it is then we suggest this can and should be assessed objectively, in line with other developments in relation to dishonesty.