Trust - privacy judgment

[2024]JRC299

Royal Court

(Samedi)

31 July 2024

Before     :

M. J. Thompson Esq., Commissioner, sitting alone

 

IN THE MATTER OF THE P TRUST

AND IN THE MATTER OF ARTICLE OF 51 OF THE TRUSTS (JERSEY) LAW 1984 (AS AMENDED)

Advocates S. M. Baker and  S. C, Thomas for the Representor.

Advocate J-M. Renouf for the First Respondent.

Advocate F. B. Robertson for the Second Respondent.

The remaining Respondents not appearing.

judgment

the COMMISSIONER:

Introduction

1.        This judgment contains my reasons for refusing to hold the present proceedings in public, for also refusing to vary the terms of a confidentiality club, the terms of which are recorded in an Act of Court dated 6 August 2021 for the reasons set out in a judgment of Commissioner Clyde-Smith of the same date Representation of C re P Trust [2021] JRC 205 (“the August 2021 Judgment”), and for permitting evidence in reply to be filed by F.  F is the son of the Representor and the brother of the Second Respondent.

2.         The general background to the present dispute is set out by Commissioner Clyde-Smith in the August 2021 Judgment at paragraphs 2 to 11 as follows:

“2.      The general background is not in dispute.  By her Representation dated 13th October 2020, the Representor seeks the removal of Fenlight as trustee of the P Trust, a Jersey proper law discretionary trust, of which she is a beneficiary and a settlor.

3.        The P Trust owns 50% of a Jersey holding company that through a wholly owned Country 1 company ultimately owns a successful Country 2 trading company called (“Company 1”). The other half of the Jersey holding company is owned by another Jersey proper law discretionary trust known as the N Trust of which (“Company 2”) is trustee.

4.        Representor has two sons, (“F”) and the Second Respondent, (“D”).  For many years, the Representor’s two sons and her former husband (“B”) were involved in Company 1.  The Representor says she was also involved in Company 1 retiring in 1998. In 2006 B was bought out of the business.  D and F continued working together until 2012, when F reduced his involvement to the point where he is no longer now involved in the day-to-day business of Company 1.  D is chairman of Company 1 and remains closely involved in its operation.

5.        The P and N Trusts were established in January 2006, funded from an earlier trust. The Representor was the only named beneficiary of each (but with each trust being a beneficiary of the other), and it was the intention that D and his family would ultimately benefit from the P Trust and F and his family from the N Trust.  It is not in dispute that the Representor is a settlor of both trusts, but in its answer to the Representation, Fenlight asserts that whilst the Representor is a settlor of the P and N trusts, the economic settlor is in fact her former husband, B.

6.        In April 2012 Baccata Trustees Limited became trustee of the N Trust and Fenlight (part of the Baccata group of companies) became trustee of the P Trust. The same individuals, and in particular Baccata’s chief executive officer [K], were involved in the administration of both trusts.

7.        In June 2019, Company 2 became trustee of the N Trust at the request of the Representor and F. Following the appointment of Company 2, K remained heavily involved in the administration of the P Trust and of the underlying companies in Jersey and Country 1, of which he is a director. 

8.        In June 2019 the trustee of the N Trust was removed as a beneficiary of the P Trust and it is understood that the trustee of the P Trust was removed as a beneficiary of the N Trust.

9.        In November 2019, Fenlight appointed D and his issue as beneficiaries of the P Trust.  He has one adult child, the Third Respondent (“G”), and one minor child represented by Advocate Swart.  As far as the Court is aware, F has not been appointed a beneficiary of the N Trust. The beneficiaries of the P Trust therefore now comprise the Representor and D and his issue.

10.      The First Respondent and the Second Respondent assert that at the heart of this matter is a breakdown in the relationship between D and F. Furthermore:

(i)        The Representor claims a complete breakdown in the relationship between her on the one hand and Fenlight and K on the other, something the latter do not accept.

(ii)       The working relationship between Fenlight and Company 2 has been strained.

(iii)      The relationship between D and the Representor is also strained, in that he is opposing the Representor’s application for the removal of Fenlight.

11.      The Representor lives in Country 3, with her second husband.  She is in her mid-seventies and not in good health.  She says she has a modest lifestyle and has limited expectation of personal benefit out of the P Trust.

3.        In a judgment dated 23 December 2021 (unpublished), Sir William Bailhache, Commissioner (“the December 2021 Judgment”), following on from the background set out by Commissioner Clyde-Smith in the August 2021 Judgment, stated the following at paragraphs 4, 5 and 6:

“4. I was informed by Advocate Renouf at the hearing that K and a R of Company 2 are directors of both Company 8 and Company 6, two of the intermediate companies between the trusts and Company 1. I was similarly informed that a Q, resident in Country 1, is also a director of Company 6 and that his firm provides professional registered office services to that company. The trusts have no direct representation on the board of Company 1, of which D is chairman. When the draft judgment was circulated, Advocate Renouf commented that this summary was not entirely correct. The directors of [Company 9] are S and K of Baccata, and IQEQ Corporate Services (Jersey) Limited and Winter Hill Financial Services Limited, corporate vehicles part of the IQEQ group of companies. The directors of Company 6 are said to be R of IQEQ, K of Baccata and a Q, who is not attached to either trust company and is directly engaged by Company 6. The trusts have no direct representation on the board of Company 1, of which D is chairman.

5. Before turning to the prospective costs order application, I review briefly the pleadings. After setting out the structure, the Representor asserts that there has been a breakdown in her relationship with the Baccata Group, of which the First Respondent forms a part. In particular, there has been a breakdown with K, the Chief Executive of the First Respondent. It is, however, noteworthy that there is no explicit claim in the Representation that the First Respondent has acted in breach of trust. The premise for the argument that the Court should dismiss the First Respondent as a trustee and appoint a new trustee in place is the alleged breakdown in relationship between the Representor as settlor and principal beneficiary, as she contends, and the First Respondent as trustee. It is something of a surprise therefore to find that the prayer also includes an application for an account to be taken of the First Respondent's trusteeship of the P Trust and an order that the First Respondent pay the costs of and incidental to the Representation as incurred by all parties on an indemnity basis.

 6. Neither the Third Respondent nor the Fourth Respondent has filed an answer. However, both the First and Second Respondents in their answers to the Representation contend that it is not in the interests of all the beneficiaries that the First Respondent resign as trustee, although it is noted by both that the Representor appears to have lost confidence in the First Respondent. There is no counterclaim and no claim for costs contained in either answer. What is apparent is that the matters which are pleaded by the Representor as the basis for her loss of confidence and trust in the First Respondent as trustee raise a number of factual issues about which there is likely to be dispute both as to the relevant facts and as to the conclusions or inferences which might be drawn from them.”

4.        At paragraph 22, he also stated the following:

“22. The Representor also raises the issue as to whether or not the current proceedings should be heard in private. It is described as a residual matter, and at the hearing before me, all parties accepted that no decision on this was necessary at the present time although it was one which might have to be addressed in due course. I have understood these submissions to have been made by Advocate Speck for the purpose of supporting his contention that these are hostile proceedings and not administrative proceedings, and therefore on principle the case should be heard in public rather than in private. Although I do touch on the nature of these proceedings in this judgment I do not resolve the public/private issue because it is unnecessary to do so.”

The Pleadings

5.        In addition to the matters referred at paragraph 10 of the August 2021 Judgment, the Representor complained about the following at paragraph 20 of her Representation prior to any amendments as follows:

“20. The Representor's personal relationship with Fenlight (and Baccata, since the same individuals were involved in the administration of [N] prior to Baccata's retirement as trustee in June 2019) has completely and irretrievably broken down. The disintegration of the relationship happened over an extended period of time, and has been precipitated by a number of issues, including:-

(a) Questions being raised by Fenlight and Baccata with third parties about the Representor's capacity in circumstances where those same issues and concerns had not been first raised with the Representor, and which have now been accepted to be entirely without foundation;

(b) The recent appointments by Fenlight of [D] and his family as-beneficiaries of [P] in direct contradiction of the Representor's stated wishes, and without any prior notice to or discussion with the Representor;

(c) The marginalisation of the Representor in relation to the administration of [P], and Fenlight's refusal to provide information to the Representor about [P] when requested;

(d) The preference and prioritisation of the wishes and instructions of [D] at the expense and to the detriment of the Representor;

(e) Fenlight raising invoices for [P] and its underlying companies and seeking [D’s] approval of fees incurred without any reference to the Representor;

(f) Removal of fees from the bank accounts of [P] and its underlying companies without approval or without any reference to the Representor;

(g) Fenlight withholding bank account details and other financial information relating to [P] and its underlying companies from the Representor unless it received a written undertaking from the Representor not to disclose information to any other person (including her advisors);

(h) Fenlight refusing a request for a distribution by the Representor without proper explanation;

(i) [K] (1) claiming first in May 2019 to have not spoken to [B] for many years in refusing to provide his 'know your client" (KYC) information to IQEQ; but (2) confirming in August 2020 that [B] is a client of Baccata (despite the clear conflict of interest), and that he has provided [B’s] KYC to a corporate service provider in [Country 1]; and

(j) Fenlight, Baccata and [K’s] generally poor and discourteous treatment of the Representor.”

6.        The allegations were expanded at paragraph 21 as follows:

“21. Additionally, the Representor has become increasingly concerned about the motives underpinning and competency of Fenlight's administration of [P] (as she had been about Baccata's administration of [N] before its retirement), for reasons including:-

(a) The entrenchment of Fenlight's officers in positions at all levels of the structure, but the obstruction and delay of the mirror appointment of IQEQ's officers;

(b) Shareholder decisions being taken by Fenlight without the involvement or knowledge of IQEQ as trustee of [N];

(c) The approach being taken by Fenlight to the negotiation of a shareholders' agreement between the trustees of [P] and [N] in relation to the structure's assets;

(d) The obstruction by Fenlight of the flow of information up and within the structure;

(e) Fenlight's refusal to retire as trustee of [P] despite the Representor's express request, her obvious dissatisfaction with its conduct and performance, and her stated desire that it be replaced;

(f) The tactical appointment of [D] and his family as beneficiaries of [P] (which appointment was directly contrary to the purpose of the trust and the express wishes of the Representor and made without her knowledge), in order to preserve Fenlight's involvement in the structure;

(g) The taking of material decisions relating to the administration of [P] without any consultation with or notice to the Representor;

(h) Fenlight's and [K’s] failure to provide accurate information when instructing third party advisors and financial institutions;

(i) The creation of unnecessary work for the purposes of Fenlight's own fee generation;

(j) Fenlight sharing the Representor's correspondence with it, with [D];

(k) [K] taking undue tax risks by making key management decisions in Jersey on behalf of non-Jersey resident companies; and

(l) Fenlight's generally poor and professionally discourteous interaction with IQEQ and the Representor's advisors.”

7.        Paragraphs 25 to 27 talk about the breakdown in the relationship between the First Respondent and IQEQ.  IQEQ became trustee of the N Trust (“N”) following the removal of the First Respondent as trustee of that trust.  I was also informed that recently IQEQ has been replaced as trustee of N by a special purpose vehicle operating out of the British Virgin Islands, where F, E and one other are the directors.  The concerns of the Representor about IQEQ arose out of a letter dated 23 April 2020 from IQEQ’s then advocates, Carey Olsen, which was summarised at paragraph 27:

“From Carey Olsen's letter, the Representor was very concerned to learn that:-

(a)      IQEQ considers that Fenlight is allowing [D] to direct and dictate its administration of [P], and in doing so it is sharing in [D’s] apparent disregard for the purposes and parameters of the wider structure;

(b)      IQEQ infers that Fenlight's primary focus is to advance the interests of [D], who it considers Fenlight has identified as its principal "client";

(c)      IQEQ considers that Fenlight has ignored and disregarded corporate governance protocols for the purposes of furthering the interests of [D];

(d)      Fenlight has routinely and consistently withheld information and obstructed IQEQ's enquiries concerning the administration of the wider structure, and in particular the operation of [Company 1];

(e)      IQEQ believes that Fenlight's objective is to force a fundamental change in the dynamic of the structure, principally through the [Company 9] shareholders' agreement, to further the interests of [D];

(f)       IQEQ considers that much greater transparency and cooperation at all levels is required, with much greater emphasis on corporate governance, independent management of [Company 1], and proper (and equal) shareholder oversight; and

(g)      IQEQ believes that the removal of Fenlight is necessary to ensure the proper steps are taken to allow the structure to operate efficiently and for the benefit of the beneficiaries of both [P] and [N].”

8.        As a result of all these matters, the Representor sought the removal of Fenlight for the reasons set out at paragraphs 30 to 32:

“30. As a result of the breakdown of the relationship between (1) the Representor and Fenlight; and (2) IQEQ and Fenlight, the structure over which [P] and [N] sit has ceased to operate in the manner intended. Fenlight's conduct has been destructive and destabilising as it has actively sought to unbalance and distort a structure reliant on symmetry and transparency.

31. The impact has been severe. Even ignoring the personal impact that Fenlight's disregard and contempt for the Representor has had on the Representor herself (which in and of itself is sufficient to warrant its removal), the systemic implications of the approach Fenlight has adopted to its administration of [P] since Baccata's removal as trustee of [N] have been far reaching. Previously, the equilibrium brought by the coincidence in the Representor of the benefit of both trusts (as well as the singular voice of direction her dual role as settlor of both trusts provided) allowed a structure that might otherwise have been susceptible to dispute, and to the potential paralysis arising from an even and equal shareholding in [Company 9], to operate efficiently, effectively, and for a common purpose. Now, however, dispute and paralysis have infected all levels of the structure, to the ultimate cost and detriment of the beneficiaries of [P] and [N].

32. Fenlight's shifted agenda and new-found disregard for the wishes and direction of the Representor have been designed to disrupt the dynamic of the structure and cause exactly the divergence of benefit, and therefore purpose, the structure was set up to avoid. Fenlight's conduct, and the decisions it has recently taken, have not only caused damaging divisions to emerge between [Company 9]'s shareholders where there were previously none, but have also precipitated a deterioration in the relationships within the Representor's family. Fenlight is therefore responsible for causing both commercial and personal damage to exactly those beneficiaries whose interests it is duty-bound to protect and advance.”

9.        Paragraph 34 also pleaded that the appointment of D and his family was “directly contrary to her express wishes and therefore inappropriate, poorly handled and effected for the improper purpose of advancing Fenlight’s interests rather than the beneficiaries”.

10.     The amendments to the Representation were made on 22 August 2022.  Sir William Bailhache noted in the judgment of 23 December 2021 (unpublished) at paragraph 5 that there was no explicit claim for breach of trust.  That position changed by virtue of the amendments made to the representation.  The breach of trust complained about, as pleaded at paragraphs 18(c) to 18(e) of the Amended Representation, concerned the purported addition of the Second Respondent and his issue to the P’s class of beneficiaries.

11.     The Representor also complained about a distribution of £[redacted] made to D which occurred in September 2020.  The amendments therefore sought both the setting aside of the appointment of D and his issue, and the distribution made to D, as well as re-constitution of the trust assets. 

12.     Paragraph 20 of the Amended Representation was also amended to claim that the Representor had also lost confidence in the First Respondent by virtue of the addition of D and his issue as beneficiaries, the appointment to D and the failure to consult with the Representor before the First Respondent took these steps.  She also complained about that the First Respondent had considered removing the Representor as a beneficiary.

13.     The prayer of the substantive orders in the Amended Representation were also amended to set aside the addition of D and his issue, as well as the distribution to D. 

14.     The First Respondent’s Answer was filed in January 2022, and then amended in September 2022.  Generally, the allegations were disputed.  The Amended Answer included the following statements:

“4) With regard to paragraph 6, it is admitted that Fenlight is a subsidiary of Baccata, and that for the period that Baccata was the trustee of [N], [K] was central to the administration of both trusts. It is admitted that [K] was the Representor's principal point of contact but asserted that [K] much more commonly dealt with [D] (on an approximately weekly basis) and [F] (though less frequently than [D]) so far as concerned the administration of the trusts and the underlying business. [K’s] direct interactions with the Representor were restricted to a few occasions a year only. They were primarily concerned with her position as the sole individual beneficiary for the time being (not the sole beneficiary) of [P] and [N] and to a very limited extent to her status as co-settlor. Any intended implication that the appointment of [K] as director of underlying companies was irregular or improper is denied. It is denied that [K] appointed himself to any of the relevant directorships; those appointments were made by the relevant boards in each case, typically pursuant to requests by [D] and [F], and in accordance with extensive legal and tax advice. So far as the allegation in the Amended Representation that he procured such appointments, if by that it is intended to allege that he acted improperly or in his own interest, or otherwise than in accordance with entirely routine procedures and administration, the same is denied.

….

7) With regard to paragraphs 9 and 10:- a) It is denied that [P] and [N] were established for the sole benefit of the Representor during her lifetime. The trusts were established with the intention that they were for the respective benefit of D and [F] specifically in the long-term. The position of the Representor as sole individual beneficiary was always intended to be subject to review and change in pursuit of that end, as and when it seemed appropriate to the trustee, as indeed it was by her removal between 2007 and 2011, a removal which was entirely inconsistent with the allegation that [P] was for the Representor's sole benefit. A significant factor in the way [P] and [N] both operated for many years was that Fenlight understood (and understands) that the funds paid to the Representor from the trusts, or at least the majority thereof, were in fact passed on by her to [D] and [F] respectively and therefore, the clearly did not consider that those funds were required for her own benefit.

…..

10) The principal economic settlor of [P] was thus the Trustee of [T], which is understood to have been Hillgrove Trust Limited. [T] had one beneficiary, [B], and the settlor of which was [U]. To the best of Fenlight's knowledge and belief the then trustee of [T], when making its decision to make the appointments out in 2006, acted in accordance with the expressed wish of its then sole beneficiary, [B], having taken into account other relevant matters, including the expressed wishes of the settlor thereof, and its intention in doing so was to further the wishes of [B]. Ultimately and effectively, therefore, the economic settlor of the funds decanted from [T] to [P] was [B]. The wishes of the Representor, being neither a settlor nor a beneficiary of [T], would have been an irrelevant matter for the trustee of [T] when formulating that decision, and Fenlight therefore assumes that, even if they were expressed, no weight was placed upon them.

11) With regard to paragraph 13;

           a) it is admitted that the Representor has been acknowledged as a settlor of [P] and [N], as indeed Fenlight believes she was. If the relevance of this paragraph of the Representation is that the Representor avers that she is in fact the sole or major economic settlor of [P], that is denied. The vast majority of the assets came from [T] in accordance with the wishes of [B] as sole beneficiary of [T], as pleaded above.

b) It is admitted that in correspondence over the years Fenlight has referred to the Representor as 'settlor' in respect of the trusts. This was in accordance with the express wishes, and firm requests, of the family, due to the tensions concerning [B] at the time, and the preference to avoid mention of involvement of him at all. As regulatory requirements have changed over time, Fenlight has made further disclosures where necessary, including as regards the economic origins of [P], and the significance of [B] as a settlor of the same. The identity of the settlors is a question of fact, regardless of how things may have been portrayed in the past.

c) So far as "principal beneficiary" is concerned, it is admitted that the term has consistently been used by the Representor in her letters of wishes. The term does not appear in the [P] Declaration of Trust (the "Declaration"). From the time of the Declaration to 8th November 2019 the Representor was the only individual beneficiary of [P], save that she was removed as such from 13th September 2006 to 6th April 2011. The only other beneficiary, who was (until recently) at all times a beneficiary, was the trustee of [N], of which trust the only beneficiaries from time to time were the Representor and/or the trustee of [N] (i.e. Fenlight). In those circumstances the concept of a 'principal beneficiary' did not arise. The Representor was simply, effectively, 'the beneficiary', with the long-term intention that [D] should benefit always in mind. On 8th November 2019 [D] was added as beneficiary and on 18th November 2019 his issue were also added. Fenlight has from those dates considered those thus added as equal beneficiaries with the Representor, and consequently does not consider her to be in any sense a "principal" beneficiary, or to have ever been so.

d) The persons and institutions to whom any representations were made that the Representor was settlor and/or sole or principal beneficiary of [P] (or [N]) are not parties to this claim and are strangers to the trust, and their interests are unaffected by any difference between what they may have understood to be the position and the actual facts. That they were left under any misapprehension, still less any relevant misapprehension, is not admitted. The Representor herself must be presumed to have been fully aware of what her contribution to the trusts actually was.”

15.     Paragraph 14(e) also pleads as follows:

“e) It is admitted that the Representor was for many years the sole individual beneficiary of the trusts and that there was a structural reason for this.

i) That reason was the application of a "tax cap" arrangement in the Country 3 jurisdiction, which resulted in beneficial tax treatment for the income of [P] and [N].

ii) At all times from the creation of [P] and [N] it was the consistent practice of the Representor to then pass on that income to [D] and [F] respectively.

 

iii) In light of that consistent practice Fenlight, when considering from time to time whether it should exercise its power to add further beneficiaries in favour of [D] and his family, that is, those for whom it was always intended [P] should ultimately be held, saw no reason to do so until recently.

iv) The allegation that the Representor was intended to remain the sole beneficiary of [P] during her lifetime fails to specify whose intention that is said to have been. For the reasons set out above, in particular in paragraph 7(a), it is denied that this was the settled intention of [B] or of the trustees from time to time or indeed the Representor's own understanding at the time [P] was created.”

16.     Paragraph 43(a) of the Answer contained the following averment:

“43) With regard to paragraph 30;- a) Fenlight considers that notwithstanding the ongoing issues, the operating performance of [Company 1], as the principal asset and income generator of the trusts, has in fact been comparatively strong, particularly in a time of significant economic stress due to the global pandemic, and more recently the Russian invasion of Ukraine and resulting energy crisis.”

17.     The Second Respondent’s Amended Answer was also filed on 16 September 2022.  Paragraphs 8.2 and 8.3 are pertinent to the submissions made and state as follows:

“8.2 As the Representor well knows, the trusts were set up for the specific benefit of [D] and [F] respectively and not for the sole benefit of the Representor for her life, nor after her death were they intended to be for the benefit of the wider "family" of the Representor.

8.3 During the lifetime of the trust and until 2021 the Representor only requested distributions from the trusts when told to do so by either [D] or [F]. The Representor would be informed by [D] or [F] that [Company 1] was preparing to pay dividends to the trusts as shareholders, and the Representor would request a distribution from each trust to enable the funds to be invested as [D] and [F] thought fit. Until 2019 the Representor (who from 2014 had the benefit of a single 5-year tax cap agreed with the relevant authorities on [Country 3] which was then extended in 2017 to 5 April 2022), consistently made onward gifts of virtually the whole of the trust distributions to her sons directly or else invested them for their benefit and at their direction.”

18.     Paragraph 11A.2 and 11A.3 also state as follows:

“11A.2 The Representor took no active role in the running of the trusts or of the underlying companies, she took no material decisions in relation to the trusts or the underlying companies, and insofar as she communicated wishes to the trustee from time to time these were the wishes expressed to her by [D] and [F].

11A.3 This informal position was expressed more formally as far as dealings with the trustee were concerned in the April 2019 LOW. Fenlight made distributions from [P] to the Representor whenever she asked for them, and until 2020 she only ever asked for them at the instigation of [D].”

Procedural history subsequent to the filing of the amended pleadings

19.     On 25 November 2022, Sir William Bailhache, Commissioner, approved directions agreed by consent relating to discovery.  This order was made in private, following on from the privacy orders made when proceedings were commenced in 2020.

20.     The agreed deadlines were modified by further Act of Court in private dated 15 June 2023, which varied the time for evidence each party was going to rely on to 23 June 2023, with evidence in reply by 14 July 2023.  At this stage trial dates were fixed for 18 September 2023 but these were vacated by consent.

21.     Following a hearing before Commissioner Binnington, the timetable for the exchange of evidence upon which any party intended to rely was extended to 5pm 22 December 2023, with evidence in reply to be filed by 9 February 2024.  These time frames were set following argument, leading Commissioner Binnington to state the following at paragraph 22 of his judgment dated 2 November 2023

“22. In relation to timing, the Court is of the view that the Representor's advisers have had a significant period of time in which to prepare the affidavit evidence. Without any medical evidence before the Court as to the challenges that they are allegedly facing, the Court is however prepared to make a slight adjustment to the timing but not to the extent sought by the Representor.”

22.     Affidavits were produced by the Representor, K and the Second Respondent, which affidavits were all sworn and exchanged on 19 January 2024.

23.     Following the hearing before Commissioner Binnington, trial dates had been refixed for 13 May 2024.

24.     However, on 9 February 2024, the Plaintiff issued a summons seeking to vary the Act of Court dated 6 August 2021 to share all pleadings and discovery with E, F and Harneys.  The application also sought a variation of Order A(4) as follows:

“1.3. Order A(4) shall read: "In considering any further application by the Representor for further leave to share documents with either the persons stated at Order A(2) above or any other person, the Court shall balance the principles of "natural justice" and the parties' rights to "fair trial" against the parties' rights to confidentiality and privacy".”

25.     The application also sought an extension of time for the filing of evidence in reply. 

26.     On 14 February 2024, the Representor issued a summons seeking that the proceedings be heard in public and permission to share documents with such third parties as may reasonably be required by the parties to facilitate their conduct of the proceedings.  The documents the Representor wished to share were described in the summons as follows:

“1.2.1. The parties' pleadings.

1.2.2. Any affidavit or witness statement, together with any accompanying exhibit, filed and served within the course of these proceedings.

1.2.3. Any Act of Court or Judgment made in these proceedings.

1.2.4. Any application issued by a summons in these proceedings.

1.2.5. Any bundle of documents or skeleton filed with the Court in these proceedings.

1.2.6. Any correspondence by any party (or non-party) concerning or referring to these proceedings.

1.2.7. Any drafts of the documents listed at paragraphs 1.2.1-1.2.6 above which a party wishes to share with a third party.”

27.     I add for the sake of completeness that on 19 April 2024 the Representor also issued a request for further information and a summons for specific discovery, which applications were heard separately from the summonses referred to, and which application as at the date of this judgment remains to be determined pending an application by the Representor to further amend its Amended Representation.

28.     Following exchanges of correspondence between the parties about when the summonses could be heard, through the Bailiff’s Judicial Secretary I raised with the parties that the Representor’s applications meant that an adjournment and the re-fixing of trial dates seemed to be highly likely, if not inevitable, and I invited the parties to grasp the issue and set a realistic timetable to determine the Representor’s applications.  Following further emails from the parties, on 26 April 2024, I directed that the trial dates listed for May 2023 be vacated and re-fixed for the first available date after 16 September.  I also set a timetable for the filing of evidence in relation to applications issued by the Representor.

Submissions

The Representor

29.     The Representor, through Advocate Baker, made the following written and oral submissions. 

30.     In relation to privacy, by reference to C Trust Company Limited [2010] JCA 017, open justice forms part of the law of Jersey.  Justice therefore not only had to be done, but had to be seen to be done.

31.     Proceedings should only be in private where it was strictly necessary to ensure the proper administration of justice (see Re Delphi Trust [2014] 16 ITELR).  The burden of proof was on the Respondents to adduce clear and cogent evidence that the trial should be conducted in private.  The Respondents’ assertions that the airing of commercially sensitive information about Company 1 in a public hearing did not meet the standard.

32.     In relation to the applicable principles on public and private hearings, these were set out in Jersey Evening Post Limited v Al Thani [2002] JLR 542 at paragraphs 14, 15 and 16.  The allegations of breach of trust should therefore be heard in open court.  This was not therefore a case of a trustee surrendering its discretion, but rather the action of the trustees being attacked as an improper exercise of their powers.  It therefore fell within the fourth limb of categories of application by a trustee referred to in Re S Settlement [2001] JLR Note 37.

33.     The fact that the proceedings had so far been held in private did not matter.  The test was one of whether it was necessary for proceedings to be in private.  There was a responsibility on the Court to make that decision, and it did not matter if the parties had not raised the issue earlier. 

34.     To the extent that any party needed to hear any genuinely sensitive matters in private, a party could make an application.

35.     The other benefit of a public hearing was that if a party did not want to make statements in public which could lead to adverse consequences, that was a matter for a party to reflect on in deciding whether or not to continue its opposition to the Representor’s application.

36.     Advocate Baker contended that the proceedings no longer solely concerned a removal claim, but emphasised that there were now additional claims for breach of trust.  This required determination of a number of facts to be proved by witness evidence heard in open court in the ordinary way. 

37.     In addition, the affidavits filed by the Second Respondent and K for the First Respondent went beyond the pleadings filed by the First and Second Respondents and made a number of allegations which only F and E could speak to.  The Representor therefore had a right to call evidence to respond to that which required the Representor being permitted to share the First and Second Respondents’ discovery with F and E.  This was to ensure that relevant evidence was before the Court.  It did not therefore matter that neither F nor E had provided any evidence in chief.

38.     The Representor was in any event willing not to share any commercially sensitive documents with F or E and had identified some 1600 documents out of approximately 10,000 documents disclosed by the First and Second Respondents which she would not share.

39.     The variation to privacy orders were also sought to enable the Representor to talk to IQEQ, because IQEQ would not disclose any information to the Representor in light of the privacy order.  Advocate Baker complained that the privacy order should not prevent a party from speaking to witnesses with relevant evidence.

40.     The holding of proceedings in private also led to the concern that a party or witness might skew their evidence if that evidence was not being given in public. 

41.     It was also important for the proceedings to be in public because the First Respondent’s case was that the Representor was a dummy settlor.  The Representor therefore wished to cross-examine K on statements made by or for the First Respondent to third parties which were inconsistent with the First Respondent’s present case and where the Representor was alleging that the First Respondent had made false representations to third parties.  The Representor contended that the making of false statements could either amount to breaches of the Money Laundering (Jersey) Order 2008 (“the Money Laundering Order”) or regulatory sanctions. 

42.     The Representor also wished to cross-examine the Second Respondent on statements that he had made in his divorce proceedings that he had no interest in P. 

43.     It was not for the Representor to justify what documents it wished to put to witnesses.  Such an approach also imposed on privileged communications between the Representor and its legal advisers.

44.     What the Representor wished to do was to approach F so he could respond to material which was outside the Representor’s own knowledge.  While the Representor was entitled to put to F any material she possessed in her own right independent of any discovery received from the Respondents, it was wrong for the Respondents to restrict what the Representor could show to witnesses who had relevant evidence to give.  Advocate Baker then sought to extend the evidence he wished F to respond to, to the make-up of the board of Company 1, by reference to the fifth affidavit of the Representor and the matters deposed to in paragraph 11.  Advocate Baker also wished to refer F to an attendance note dated 21 June 2012 referred to in paragraph 124 of K’s affidavit.  Finally, the Representor also wanted F to give evidence to respond to criticism from the managing director of Company 1 (V) in a letter dated 24 May 2022 that F had been taking steps to damage the value of (Company 1). 

45.     Advocate Baker, during the course of his submissions, referred to a number of documents which identified various statements made by the First Respondent, or Baccata Trustees, that the Representor was settlor.  The Representor also wanted to approach F because part of the evidence of both the First and Second Respondents was that F was aware of the position the First and Second Respondents now wished to advance.

46.     F and E had not been approached earlier because neither of the answers of the First and Second Respondents were pleaded in a way that necessarily required evidence from F or E.

47.     In relation to IQEQ, Advocate Baker wished to put to them Section O of K’s affidavit and paragraphs 127 to 129.  This included an assertion that IQEQ had been poorly guided by E.

48.     Advocate Baker wanted to share material with Harneys because they were legal advisers to F and he wanted to take legal advice on any evidence he might give.  In an email dated 15 January 2024 addressed to Fenlight via Baccata, Harneys Jersey had written indicating that they were instructed on behalf of Company 8 the incoming trustee of the N.

49.     In relation to E, the Representor wished to explore the extent of his knowledge.  Advocate Baker therefore referred to a review signed by E on 23 April 2013 by Company 4 relating to the incorporation of Company 9, which was established to own Company 1.  The document stated that the Representor was the settlor and beneficiary of the two trusts. 

The First Respondent’s submissions

50.     Advocate Renouf, for the First Respondent, emphasised that all of the amended pleadings and all of the written evidence had been filed on the basis that the proceedings were in private.  All the interlocutory proceedings had also been held under the same privacy regime.

51.     Secondly, the issue of F’s understanding of whom P was held for was an issue that had been there from the outset, as could be seen from the judgment of Sir William Bailhache dated 16 March 2021 where he encouraged F and D and the respective trustees to try to mediate their differences.

52.     The present proceedings were effectively a hybrid of administrative proceedings where a beneficiary was seeking to remove a trustee and claims for breach of trust.

53.     He was also critical of the lack of any explanation from the Representor as to why the issue was being raised now when it had been referred to in the judgment of Commissioner Bailhache and when Advocate Jonathan Speck, the former legal adviser to the representor, had raised the issue in September 2022 but had not pursued the same.  The real purpose of Advocate Speck raising the issue of whether proceedings should be in public or private in his letter of 2 September 2022 to Advocates Robertson and Renouf was to stop the First Respondent from paying itself its costs of responding to the representation out of trust assets.

54.     What the Representor and F was trying to do was threaten the structure and, as part of that, wanted to obtain documents through the back door as part of that strategy.

55.     An illustration of the tactical approach of the Representor was that, once Commissioner Bailhache had made his decision in relation to whether the trustee could pay its costs out of the trust fund, only at that stage was a claim for breach of trust added in order to prevent the First Respondent from recovering its costs out of trust assets.

56.     At paragraph 44 of Commissioner Clyde-Smith’s judgment of 6 August 2021, he clearly determined that the proceedings were administrative proceedings because they were concerned with who should be the trustee of P, where the Court was concerned “with the welfare of the beneficiaries as a whole and the good administration of the trust”.

57.     This position contrasted with the position in the Isle of Man and the decision of Deemster Doyle in Re Delphi Trust [2014] MLR 51, where Deemster Doyle held that applications to remove trustees would ordinarily be public proceedings; that was not the approach of Commissioner Clyde-Smith in this case.  It was also not the approach of Commissioner Birt in HSBC Trustee CI v Kwong [2018] JRC 051A , who held that direction applications would normally be heard in private with any reasoned judgment being published subject to anonymisation “so as to protect the privacy of those involved and to ensure that full disclosure to the Court is given by the parties”.

58.     The present case was different from ordinary hostile litigation because firstly the case began as a Representation and was administrative in nature, and the entire pleadings were filed on the basis of that approach. 

59.     The reason why the proceedings were in private was to safeguard the value of the main asset, namely Company 1, from the risk of damage by F.

60.     There were also practical difficulties with the Representor’s approach.  Discovery was approached on the basis of the privacy order.

61.     To the extent that the Respondent had concerns about particular material, it was disproportionate to incur costs in advance to identify what material was confidential.

62.     In relation to concerns about the re-domiciliation of Company 6 to Country 1 and whether this gave rise to taxation issues, this was an attempt to put matters in the public domain when there was no tax problem.

63.     The concerns that the First Respondent had in 2021 as to why it wanted discovery limited were stronger now than then, that F was seeking to significantly damage Company 1.  Any evidence in reply that F was permitted to file therefore had to be strictly controlled because of F’s previous actions towards Company 1. 

64.     Any evidence F is permitted to give in reply should therefore be restricted to paragraphs of affidavits and should be carefully policed by the Court. 

65.     The need for policing was also important because otherwise further evidence might lead to a need for the First Respondent to file evidence in reply. 

66.     Advocate Renouf was also critical of the Representor for not obtaining evidence from F earlier.  This could have been provided as part of the exchange of evidence which took place in January 2024. 

67.     It was too late to talk to IQEQ because any evidence they wished to adduce should have been brought as part of the evidence in chief.  Any evidence to be permitted at this stage should therefore be in response to affidavit evidence filed already.

68.     In relation to the position of Harneys, they are advisers to the current trustee of N.  The directors of that private trust company are F, E and two others, one of whom is a colleague of E in the company he works for called Company 3.

69.     Commissioner Clyde-Smith, in his judgment of 6 August 2021 at paragraphs 42, 43 and 45(ii) was conscious of the conflict.  At paragraph 45(ii), Commissioner Clyde-Smith stated:

“(1) We cannot countenance any circumstances in which documents or information disclosed in these proceedings should be disclosed by the Representor to Company 3, irrespective of whatever undertaking may be offered, save to the extent that the Representor is in possession of such documents and information independently of these proceedings.”

70.     Privacy was also important because if there was to be any sale of Company 1, if any potential purchasers became aware of a dispute, then that would decrease the value of Company 1.

71.     Standing back, the Court should also have regard that this was a family trust, underlying which was a dispute between the Representor’s two sons.  Notwithstanding this, the Representor wanted to make this dispute public.

72.     In relation to the criticisms of K’s statements to third parties, K had dealt with this in his affidavit at paragraph 52 and could be cross-examined on statements he had made.  The focus on this part of the evidence was strategic.  The Court was entitled to evaluate these concerns when it came to the final hearing once it heard K’s evidence.

73.     In relation to the evidence that E might file, his involvement was limited.  Advocate Renouf also posed the question as to how E knew what had been said because the evidence was that he wanted to reply to K’s evidence.

74.     The amendment of pleadings did not change the entire nature of the proceedings which remained an administrative application to remove a trustee.  The grounds relied on had been there since inception.

The Second Respondent’s submissions

75.     Advocate Robertson for the Second Respondent made the following submissions.

76.     He also emphasised the lateness of the application and that the trial had to be adjourned twice.  He was therefore concerned that both the present applications and the applications for further discovery were trying to disrupt the timetable and ramp up the pressure on the Respondents to compel them to incur costs.

77.     He emphasised the observations of Sir Philip Bailhache, Bailiff, at paragraph 28 of the Al Thani decision, which stated that where the Court was “exercising a quasi-parental jurisdiction to protect the interests of all the beneficiaries of a trust, the Court should generally sit in private”.  The present application, having at its heart the removal of the First Respondent, was such an application.  That was how Commissioner Clyde-Smith had viewed the present application. 

78.     The approach generally adopted was to hold hearings in private with the judgment being published with appropriate anonymisation.  Ultimately what the Court had was a discretion where a range of options was open to it. 

79.     Advocate Robertson also emphasised that the steps taken to date in the proceedings had all been done on the basis that the proceedings were in private.  In this case, the application was made late without explanation.

80.     The breach of trust proceedings were also bolted on to the removal application and could therefore be described as consequential relief. 

81.     He also emphasised that making the proceedings public could damage any sale or buy out of the main asset.

82.     If the Court was minded to allow F to file evidence, this should be strictly limited to evidence in reply as F could have filed evidence at an earlier stage if he had wished to do so.  His right therefore to file evidence should be limited and tightly controlled.

83.     E’s evidence was of limited value and he was also in a position of clear conflict.  The remarks of Commissioner Clyde-Smith therefore applied.

84.     Harneys were also in a position of clear conflict.

85.     Advocate Robertson also referred to a letter dated 12 March 2020 from his client to the Representor before proceedings were commenced, which at that stage set out the Second Respondent’s position.  In so far as that letter referred to F, he could have responded to that evidence.

86.     Advocate Robertson also took me through the Amended Answer where there were references to F’s involvement at paragraphs 4.52, 11A2, 11A3, 13.1 and 13.2. 

87.     For IQEQ to be permitted to file evidence would be very disruptive to the timetable which also highlighted why the application was far too late.

88.     Advocate Robertson was also concerned about F’s attempts to damage the structure by reference to paragraph 14 of his client’s fourth affidavit, filed in opposition to the Representor’s application.  In support of this, he took me through a series of WhatsApp messages and calls and emails showing the inappropriate nature of F’s communications with employees of Company 1.

89.     He also referred to me to proceedings commenced before the Business and Property Courts in Manchester by Company 1 against F concerning attempts by F to re-direct a dot.com website belonging to Company 1.  The extent of F’s wrongdoing could be seen, but ultimately the proceedings were discontinued with F agreeing to transfer the relevant domain transfer code to Company 1’s solicitors.

Reply

90.     Advocate Baker in reply emphasised the importance of public justice and hearing matters on an open basis unless there was justification. 

91.     In terms of the cost of proceedings, the Second Respondent had had a distribution of some £[redacted] and therefore could afford to defend the proceedings.

92.     He described the messages sent by F to the employees of Company 1 as being intemperate, but that did not justify excluding him from filing evidence in reply.

93.     The present proceedings were clearly hostile, including the application to remove the First Respondent as trustee, and should therefore be in public.  Commissioners Clyde-Smith and William Bailhache were not addressed on the topic at all and therefore any previous observations in the nature of the proceedings at that stage did not assist.

94.     If there was sensitive commercial material, this required the Court to sit in private to deal with that material, but otherwise to sit in public.

95.     As to the scope of reply evidence, the matter could safely be left to the judgment of experienced lawyers. 

96.     Advocate Baker was also concerned that if documents F could look at was limited then this might be used against him in cross-examination to suggest his evidence was incomplete and therefore could not be relied on.

97.     In relation to potential damage to Company 1 by a public dispute, there was no evidence that any sale was being contemplated.  In any event, the Court had to deal with whether or not the First Respondent should be allowed to remain as trustee, whatever might happen to Company 1 in the future.

98.     F wanted to instruct Harneys as his lawyers of choice because potentially he faced serious allegations of misconduct.

Discussion and Decision

99.     The starting point for whether or not hearings are to be held in public or whether this Court should sit in private is Jersey English Post v Al Thani and Others [2002] JLR 542.  In this judgment, the Court considered its practice of when it would sit in private for applications for directions by a trustee under what is now Article 51 of the Trusts (Jersey) Law 1984 (“the Trusts Law”).  At paragraph 14, the Court stated the following:

“14. The principle of open justice has not yet found statutory expression in Jersey but we have no doubt that it forms part of our law. Indeed it has been given judicial expression in numerous judgments of the court. Like most great principles, however, it is subject to qualifications. In Scott (or Morgan) v. Scott (14), Viscount Haldane, L.C. stated ([1913] A.C. at 437-438):

           "While the broad principle is that the courts of this country must, as between parties, administer justice in public, this principle is subject to apparent exceptions, such as those to which I have referred. But the exceptions are themselves the outcome of a yet more fundamental principle that the chief object of Courts of justice must be to secure that justice is done. In the two cases of wards of Court and of lunatics the court is really sitting primarily to guard the interests of the ward or the lunatic. Its jurisdiction is in this respect parental and administrative, and the disposal of controverted questions is an incident only in the jurisdiction. It may often be necessary, in order to attain its primary object, that the court should exclude the public. The broad principle which ordinarily governs it therefore yields to the paramount duty, which is the care of the ward or the lunatic. The other case referred to, that of litigation as to a secret process, where the effect of publicity would be to destroy the subject-matter, illustrates a class which stands on a different footing. There it may well be that justice could not be done at all if it had to be done in public. As the paramount object must always be to do justice, the general rule as to publicity, after all only the means to an end, must accordingly yield. But the burden lies on those seeking to displace its application in the particular case to make out that the ordinary rule must as of necessity be superseded by this paramount consideration. The question is by no means one which, consistently with the spirit of our jurisprudence, can be dealt with by the judge as resting in his mere discretion as to what is expedient. The latter must treat it as one of principle, and as turning, not on convenience, but on necessity."

100.   Paragraph 15 of the judgment then referred to G v A [2000] JLR 56 as follows:

“15. The speeches of their Lordships in Scott were considered in a recent judgment of this court in G v. A (7) where Page, Commr. usefully summarized the general principles (2000 JLR at 59-60):

"(a) The general principle, beyond doubt, is that all proceedings should take place in public in open court.

(b) The constitutional, legal and practical importance of this principle is such that it should not be displaced except for compelling reasons.

(c) Whether to order proceedings in camera is something that must be determined in accordance with principle, and not on the basis of what the judge happens to consider convenient or reasonable. Potential embarrassment on the part of those who have to give evidence is not a sufficient reason, of itself, to justify a hearing in camera.””

101.   In relation to applications by trustees who surrender their discretion to the Court, the Court noted at paragraph 25 that where a trustee “discloses sensitive or confidential information relating to the affairs of the trust, the court should sit in private to determine the application”.

102.   The Court in Al-Thani at paragraphs 26 and 27 also cited the well-known passage from Re S Settlement [2001] JLR Note 37 and the different categories of application by a trustee.  This led the Court at paragraph 28 to state as follows:

“28. We think it would be unwise to be too dogmatic as to when the court should sit in public and when it should sit in private to hear art. 47 applications. As Hart, J. rightly emphasized, the categories adopted in In re S Settlement are not watertight and some cases may even fall outside them. The jurisdiction conferred by art. 47 of the Trusts Law is a wide one. It has been employed to the great advantage of settlors, trustees and beneficiaries since the Trusts Law came into force. But we think it can be said that the courts in this jurisdiction have accorded a greater importance to the need to respect the confidentiality of private trusts than has been the case elsewhere. It has certainly been the practice in Jersey to sit in private to hear applications falling within categories (b) and (c); but it has been the practice, occasionally, to sit in private to hear cases falling in category (a). The underlying rationale is a desire not to undermine the confidence which lies at the root of the relationship between a trustee and the beneficiaries, particularly of a discretionary trust. In striking the balance between the principle of open justice and the rights of individuals to respect for the confidentiality of their private business arrangements, the court must have regard to the purpose of the art. 47 jurisdiction. Its broad purpose is to assist those concerned with the administration of trusts to resolve their differences and to seek judicial guidance or direction in an orderly context but in a relatively informal and flexible manner. When hostile litigation is being conducted, it must naturally be conducted in public in the ordinary course of events. But where the court is sitting administratively, or is exercising a quasi-parental jurisdiction to protect the interests of all the beneficiaries of a trust, the court should generally sit in private. Although the Human Rights (Jersey) Law 2000 is not yet in force, we have considered whether this approach might be in conflict with a convention right under the European Convention on Human Rights, art. 6(1) which provides:

"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice."

In our judgment, the phrase "or the protection of the private life of the parties so require[s]" is sufficient justification, absent any compelling reason to the contrary, for resolving to sit in private to hear this kind of application under art. 47 of the Trusts Law.”

103.   It is next appropriate to refer to the judgment of the Court of Appeal in the Matter of the Internine Azali Trust [2006] JLR 195.  While this judgment did not explore the question of whether the Court should sit in public or private, the relevance of this judgment to the present application is that the Court of Appeal made the following observations on confidentiality and privacy in relation to applications for directions at paragraph 36:

“36. It will therefore be seen that, with respect to the learned Commissioner, we do not agree that as a matter of law an issue as to the recoverability of trust documents is one for the balancing of (a) the trustee's obligation of confidentiality, and (b) the circumstances of a case and "equitable considerations." In our view, art. 47 proceedings should not entitle a stranger to a trust to simple pre-action discovery on such a vague basis, notwithstanding what might indeed be able to be characterized as unconscionable conduct on the part of one or two-or even all-persons presently connected with the trust's affairs. Rather, with properly authorized discovery proceedings, it is likely that the interests of justice will, at first sight, require the release of identified documents or types of document notwithstanding their being documents relating to the affairs of a trust. However, because of the interests of numerous parties in the proper governance of a trust, trustees will be expected to be vigilant in responding to discovery proceedings and raising issues of confidentiality and the court will be assiduous to take into account the views of the parties clearly interested in the trust.” [Emphasis added.]

104.   As the effect of the current application by the Representor for the hearing to be heard in public would be to make public the entirety of pleadings, affidavits and evidence filed in what to date had been private proceedings, I am required to take into account the views of the parties interested in the trust in determining whether or not the general principle that proceedings should take place in public and in open Court should be followed, or whether the principle of open justice should be displaced for compelling reasons and because it is necessary to do so in the interests of justice.

105.   In Re C Trust Limited, the Court of Appeal, at paragraph 26, approved Al Thani and stated the following:

“26. We were not minded to grant that application. The principle of open justice forms part of the Law of Jersey and is of such constitutional, legal and practical importance that the court should depart from it only if it is necessary to do so in the interests of justice. (See, generally, Jersey Evening Post -v- Al Thani [2002] JLR 542, at paragraphs 12-16, and the cases there cited.)”

106.   In relation to the facts of that appeal, the Court of Appeal sat in public although the published judgment was redacted to anonymise the names of the trustee who was the representor and all of the convened respondents who were the ascertained beneficiaries of the trusts in that case.

107.   The next relevant decision is The C Trust [2012] JRC 098.  This judgment follows on from an earlier substantive judgment which was described at paragraph 3 as follows:

“3. It was common ground that although the application was brought under Article 51 of the Trust (Jersey) Law 1984 as amended, these were hostile proceedings which came within the fourth of the categories described in Re S Settlement [2001] JLR N 37, namely hostile litigation to be heard and decided in open court. Indeed, there was no application for the matter to be heard in private and it was heard and the judgment handed down in public. It was also common ground that the judgment will need to be anonymised in order to prevent the grandchildren being identified.” 

108.   The issue for the Court in The C Trust matter was whether the Court should publish its judgement in full or with redactions.  At paragraph 13 of the judgment, Commissioner Clyde-Smith referred to In the Matter of Sanne Trust Company Limited [2009] JRC 025B which dealt with whether applications for rectifications should be heard in public or private, leading to the following statement at paragraph 6 of the Sanne decision:

“6. The reconciliation of the requirement for public justice and the need to respect the confidentiality of private trusts is achieved by sitting in public but by redacting the Court's judgment so as to excise any reference to the name of a beneficiary and/or a settlor or protector. But for the error of a professional adviser, there would be no application to the court. The nature of confidential family arrangements embodied in a private trust would not ordinarily see the light of day. There seems to us no compelling reason why the mistakes of professional advisers should involve the public exposure of family arrangements which would otherwise have remained entirely private.”

109.   In the C Trust matter, Commissioner Clyde-Smith reached the following conclusion at paragraph 16:

“16. The practice of anonymising judgments in order to protect the privacy of the family involved with the trust in accordance with the principles laid down in Re Sanne is now well established but in our view, the Court should be resistant to any extension of the process. Mr MacRae submitted that this case was fact dependent and no points of law arose which would be of any interest to the public, none of whom (apart from the mother) attended the hearing. We agree that the case was fact dependent but we do not agree that the judgment would be of no interest to the public. Just as errors made by professional advisers in rectification cases were said in Re Sanne to be of public interest, so it seems to us that the conduct of trustees and protectors carrying on trust company business in the Island is just as much of public interest.”

110.   The Court also refused to redact information that would otherwise be confidential because it was now in the public domain to the extent referred to in the substantive judgment.  At paragraph 19, the Court described that as an “inevitable consequence of proceedings conducted in public”.  The Court therefore published the substantive judgment in full, apart from anonymisation required to protect the grandchildren from being identified and to protect the privacy of certain family members.

111.   In the M Trust [2012] (2) JLR 51 which was also an application for directions under Article 51 of the Trusts Law, the Court reviewed the nature of applications by trustees for directions and stated the following at paragraphs 13 to 15:

“13. It is common for trustees in Jersey to seek the directions of the court in relation to matters concerning the administration of trusts. These are brought under art. 51 of the 1984 Law. Usually, the trustee will have reached a decision itself but will seek the court's blessing on the grounds that the decision is of a "momentous" nature (see In re S Settlement (4)). In other cases, the trustee will surrender its discretion to the court. Some applications are Beddoe applications properly so called, in the sense that they seek directions as to whether the trustee should institute or defend legal proceedings. Others concern decisions in relation to a variety of matters relating to the administration of the trust, e.g. whether to sell a major trust asset. In this case, as already mentioned, the trustee's application sought approval of two "momentous" decisions, namely a decision to disclose information about the trusts to the grandfather in the knowledge that he was likely to pass this on to a non-beneficiary, the husband, and through him the information would become available to the wife and the Family Division; and, secondly, a decision not to submit to the jurisdiction of the Family Division in relation to the divorce proceedings between the husband and the wife.

14. Such applications are an important part of the supervisory jurisdiction of this court in relation to trusts. They are invariably held in private. This is because the applications will often concern legally or commercially sensitive matters and they are of course administrative rather than adversarial proceedings. They do not usually determine civil rights for the purposes of art. 6 of the European Convention on Human Rights.

15 It is of vital importance that, if such applications are to serve the purposes for which they are intended, information and documents received by those who are convened as parties to such proceedings should be held in confidence. The trustee is under a duty and must feel able to make full and frank disclosure in relation to the application. It must be able to summarize the arguments for and against the proposed course of action, including any weaknesses or possible risks in relation to what is proposed.”

112.   The Court then went on to explore whether it was a contempt of Court for a party to publish information which that party only received as part of an application for directions.  This led to the following observation at paragraph 19:

“19. The distinction drawn by the court in the foregoing passage can be simply illustrated. It may well be that a party to art. 51 proceedings is already in possession of a trust deed or trust accounts. The fact that such deed and accounts are produced and referred to by another party in the art. 51 proceedings held in private cannot possibly prohibit the first party from using those documents in other proceedings or, indeed, publicly. But, if he were not hitherto in possession of those documents and has only received them as a result of the art. 51 proceedings, then it would be a contempt for him to disclose them to any other party; hence the use of the word "only" in the first sentence of para. 18 above.”

113.   This passage is significant to the public / private debate in the sense that if proceedings are in private a party can only use material received for the purposes of those proceedings and cannot disclose it to any other party except with permission of the Court.  Such permission is not needed for any material held by that party where he is already in possession of information that is otherwise private.  The same applies to information in the hands of a third party with whom a party to private proceedings is permitted to share confidential material.  The third party is entitled to also refer to any material that such a third party already possesses.

114.   The next relevant authority is the decision of HSBC Trustee (CI) Limited v Kwong [2018] 1 JLR 051A.  The issue in this judgment was whether the Court’s substantive judgment should be published in public or private.  In this case, the matter had been heard in private and the Royal Court gave its blessing to a decision by the trustee to make certain distributions.  The Court noted that ordinarily the judgment would have been published in an anonymised form, but that anonymisation was not possible because details of the family’s status and the existence of the trusts was already in the public domain through the media in Hong Kong.  The issue therefore for the Court was whether a judgment should be published because anonymisation was not possible.

115.   The Court reviewed paragraph 28 of Al Thani which we have set out above, and then stated at paragraph 23 the following:

“23. In practice, the court proceeds as envisaged in para. 28 of Al Thani. In other words, it sits in private to hear direction applications. We are not concerned for the purposes of this case with any other instances (whether related to trusts or not) where the court may sit in private and we say nothing further about such cases.”

116.   The Court then explained its practice in relation to the publication of judgments and stated the following at paragraph 27:

“27. However, the court is conscious of the importance of public justice and accordingly its practice is that, if a written judgment is produced, it will normally arrange for the judgment to be published but in anonymized form. The judgment will, so far as possible, contain the full reasoning and factual description contained in the judgment but will simply omit names and any other matters which would permit identification. Publication of an anonymized judgment serves two important purposes:

(i) Whilst such a procedure does not fulfil the objectives of public justice (as described above) to the same full extent as would be served by a hearing in public, it is the next best thing. It enables the public to see what the court is doing and why. For example, in public law children's cases, publication of the judgment enables the public to see the sort of circumstances in which the court will remove children from the care of their parents. This enables the public to assess whether the court is being too proactive or not proactive enough in such cases. Publication of an anonymized judgment therefore serves an important purpose. As Lord Neuberger, M.R. said in H v. News Group Newspapers Ltd. (9) ([2011] 1 W.L.R. 1645, at para. 35):

           " ... More particularly, there is much in the point that the media will be generally better able to discover, and report on, what the courts are doing if they can publish (a) details of the type of case (for instance, as in this case, a sexual liaison between an unidentified well-known sportsman, in an apparently monogamous relationship, and a third party) rather than (b) the name of the individual who is seeking to protect an unspecified aspect of his or her alleged private life by means of an injunction. As Mr Tomlinson puts it, the former information would normally enable the public to have a much better idea of why the court acted as it did than the latter information."

In other words, full information about a case without names is more helpful than publication of names but with no detail.

(ii) Publication of full reasons, even in anonymized form, enables the legal profession to be aware of any developments in the law. Even in cases which do not involve new law but merely application of settled principles to the facts of a particular case, it is often helpful to the profession to see how the court applies established law to particular facts. This enables them to advise their clients with greater precision in future cases.”

117.   Birt, Commissioner, then reviewed the practice in a number of other jurisdictions, including commenting on the case of Re Delphi Trust, a decision of the Isle of Man, at paragraph 30 as follows:

“30. In his illuminating judgment in Re Delphi Trust Ltd. (6), Deemster Doyle considered the practice concerning applications by trustees for directions in a number of different jurisdictions. It would appear from his judgment that Guernsey follows a similar practice to that of Jersey in terms of hearing such applications in private but publishing anonymized judgments. The position in Bermuda appears to be similar although it may be that they publish judgments less often than we do. The position appears to be similar in the Cayman Islands. So far as the Isle of Man is concerned, the First Deemster approved the general proposition contained at para. 28 in Al Thani (10), namely that direction applications would normally be heard in private, but he made it clear that this must be judged on a case-by-case basis. On the facts of the case before him, he held that the hearing should be in public but that the judgment should be anonymized.”

118.   This led to the following conclusions:

“33. However, subject to exceptions such as these, this court's policy is clear, namely that although direction applications will normally be heard in private, any reasoned judgment should be published subject to anonymization so as to protect the privacy of those involved and to ensure that full disclosure to the court is given by the parties as described in the passages cited above from In re M Trust (12) and In re C Trust (5).”

119.   To the extent that there was a change of approach in England and Wales, this was explored by Birt, Commissioner, at paragraphs 36 to 38, leading to the following conclusion at paragraph 39:

“39. If, contrary to our understanding, there has been a change of approach in England and Wales in relation to direction applications so that these are no longer held in private or judgments are not normally anonymized, we would respectfully disagree with such change. We remain firmly of the view that, whilst ultimately each case must be considered on its own facts, the various interests and factors referred to earlier in this judgment are normally best balanced and accommodated by continuing the policy of sitting in private to hear such applications, but then issuing an anonymized judgment giving as much information as possible without negating the purpose of anonymization.”

120.   The Delphi Trust case to which Birt, Commissioner, referred to in HSBC v Kwong was also an application for directions.  In that case, the Court ordered that the matter be heard in open court, but with no references to the identity of the settlor of the trust, the beneficiaries, the size of the fund or the proposed distributions.  The headnote also contained the following observation:

“It is unwise to be dogmatic as to when the court should sit in public and when in private to hear applications by trustees for directions. The court should adopt a principled, pragmatic and flexible approach and can review the question whether to hear a matter in private in the course of the proceedings. Each claim for directions and each application to sit in private must be considered on its own facts, circumstances and merits. There is a presumption that such matters are not heard in private unless the court otherwise orders. Applicants or others seeking privacy must apply for any necessary orders and clearly specify the grounds of such applications. Applications involving contentious proceedings where trustees' actions were being challenged would very rarely be heard in private. Applications involving the interpretation of the trust deed or of a statute would usually be held in public as would applications for rectification and hostile applications for the removal of trustees or protectors. Applications where the trustees were seeking directions because there was real doubt as to the nature of the powers of the trustees and how they should be exercised or in cases of surrender of discretion properly so called involving the disclosure of sensitive information or where the trustees required directions as to the stance to be taken in proposed or existing legal proceedings might be heard in private (see [143], [144], [145], [147], [148], [149], [150], [151], [153], below).”

121.   Insofar as the above cases concern an application by a trustee for a blessing, the Royal Court’s treatment of such applications is that, while recognising the general principle that such proceedings take place in open court and that the principle of open justice should not be displaced except for compelling reasons, the previous decisions show that the Royal Court has accorded a greater importance to the need to respect the confidentiality of private trusts than may appear to have been the case elsewhere.  In particular, the practice, as explained in M Trust and Kwong, has been for the Court generally to sit in private, but to ensure its accountability by publishing a judgment setting out its reasons, albeit being anonymised.  Although the discretion to be exercised in every case is a matter for the individual judge or court, I am bound to have regard to the above statements of principle on how that discretion should be exercised. 

122.   What the above cases have not had to grapple with is how the principles that apply on applications for directions by trustees and whether they should be held in public or in private, should be applied to other applications involving trusts. At one end of the scale are purely hostile claims for breaches of trust.  However that is only one category of case as recognised in S Settlement cited in Al-Thani.  The distinctions between different categories of cases involving trusts are also not easy to draw as has also been recognised in the S Settlement and Al-Thani decisions, among others.

123.   In the present case, Commissioner Clyde-Smith, in the August 2021 Judgment which concerned whether there should be restrictions on discovery and inspection, at paragraph 16 noted that the Court had previously sat in private and continued to do so “on the basis that this is an administrative application concerning the confidential affairs of this trust”.  At paragraph 44, Commissioner Clyde-Smith therefore stated as follows:

“It needs to be remembered that these are administrative proceedings concerned with who should be trustee of the P Trust, in which the Court will be concerned with the welfare of the beneficiaries as a whole and the good administration of the trust. It seems to the Court that all those parties involved in the trust should have the same consideration foremost in their minds and should have no difficulty in accepting restrictions that are aimed at preserving the confidentiality of the affairs of the trust in the interests of the beneficiaries as a whole.”

124.   Although therefore, in one sense the proceedings were hostile because the Representor was seeking a removal of the First Respondent as trustee, the Court regarded the proceedings as administrative because the Court was concerned with the welfare of the beneficiaries as a whole. The position he took therefore appeared to be analogous with applications for a blessing or for directions by trustees

125.   In the judgment of Commissioner William Bailhache dated 23 December 2021, he noted at paragraph 9 that Commissioner Clyde-Smith had said that the proceedings were administrative.  He then reviewed the authorities upon the different types of disputes which trustees might become involved at paragraphs 11 to 18 in the context of a trustee seeking a pre-emptive costs order including setting out the well-known approach of Kekewich J in In Re Buckton [1907] 2 Ch 406.  Commissioner Bailhache then stated at paragraph 19:-

“19. It is immediately apparent that the third class of case which Kekewich J was considering looked like the second class of case insofar as the plaintiff was one of the beneficiaries and the trustee one of the respondents, but it was in substance a different kind of case because the beneficiary was making a claim adverse to the other beneficiaries, That raises obviously difficult questions in a case such as the present where the Representor contends that she is bringing the claim that the trustees should be replaced in the interest of the beneficiaries as a whole, and the trustees are asserting that whilst they will of course withdraw if the Court so orders, they consider they should stay in the interests of the beneficiaries as a whole. Which of the two contentions is correct will not be determined until the conclusion of the trial. The final outcome will depend upon an analysis of the relevant oral and documentary evidence but it would show in theory that there are four potential conclusions:

(i) the Representor has not lost trust and confidence in the First Respondent at all but has brought this Representation for other tactical reasons;

(ii) the Representor has lost trust and confidence in the First Respondent albeit there is no rational basis for her having done so;

(iii) as (ii) above but there is such a rational basis although the First Respondent has not been guilty of any misconduct; or

(iv) as (iii) above but the First Respondent has been guilty of such misconduct as amounts to a breach of trust.”

126.   This was the extent of his conclusions reached on the nature of the proceedings as they were at that time.  At that stage, the allegations of breach of trust summarised above had not been made.

127.   The issue of whether the current proceedings should be heard in public or private was also raised by the Representor as noted at paragraph 22 of the judgment, but the issue was not resolved.  Paragraph 22 states as follows:

“22. The Representor also raises the issue as to whether or not the current proceedings should be heard in private. It is described as a residual matter, and at the hearing before me, all parties accepted that no decision on this was necessary at the present time although it was one which might have to be addressed in due course. I have understood these submissions to have been made by Advocate Speck for the purpose of supporting his contention that these are hostile proceedings and not administrative proceedings, and therefore on principle the case should be heard in public rather than in private. Although I do touch on the nature of these proceedings in this judgment I do not resolve the public/private issue because it is unnecessary to do so.”

128.   Commissioner Bailhache then went on to reach the following conclusions.  At paragraph 35, he did not regard the pleading of the First Respondent at that stage to reveal any lack of neutrality.

129.   Secondly, at paragraph 36, he observed as follows:

“If one takes a step back and looks at the litigation in the round, it does have the hallmarks of a dispute between the Representor (whether in her own name or on behalf of F) and the First Respondent. The grounds for that dispute between them may lie in the conduct of the First Respondent but at this stage it is impossible to say with any conviction that the First Respondent is likely to be found guilty of misconduct.”

130.   This led to the following conclusions at paragraphs 39 to 41:

“39. Before leaving the question of neutrality. I also note that whilst it may be, and in my judgment currently it is, the case that the trustee has not abandoned its obligation of neutrality as between the beneficiaries, the conduct of proceedings from now on may come to be a relevant feature of any decision ultimately made by the Court in relation to costs. I say that because it would seem that a large proportion of the costs so far incurred by the First Respondent have been so incurred in relation to discovery. That exercise now being broadly complete, there would seem no reason why the First Respondent should take as active a role in the proceedings as the Second Respondent, albeit that it will want to defend its position and the decisions which it has taken as trustee so far. There does seem little point, however, in what is effectively an argument between the Representor and the Second Respondent resulting in additional costs, from now on, incurred by the trustee. In my judgment the First Respondent and Second Respondent will want to consider carefully the extent to which the defence of the Representation, assuming it is to be maintained, should require the active participation of them both in every respect.

40. Another way of putting this is to summarise the approach thus. The First Respondent is able to rely upon its general indemnity as to costs incurred in the administration of the trust, including the costs involved in the defence of these proceedings. At the end of the day, a Court order may require it to restore the trust fund with expenses taken, and that Court order would not likely be made if there have been sufficient findings of misconduct. There are no exceptional circumstances here which would suggest that the First Respondent cannot afford to contest and/or would not contest the Representation, and in any event that is not the evidence before me. Furthermore, the costs in relation to disclosure have been paid.

41. In summary, I take the view that without an order from me, the First Respondent can reasonably take from the trust fund the costs of acting as a trustee, albeit those costs may be liable to subsequent challenge. For the avoidance of doubt the removal of costs and expenses from the fund in the way I have described is only a potential litigation issue. Such payment at present is a trust issue and therefore includes not only the trustee's fees personally but also the trustee's legal costs incurred.”

131.   Since Commissioner Bailhache’s judgment, the preceding pleadings of the Representor were amended as set out above.  However, in my judgment, the main thrust of those amendments is to assert that the conduct previously complained of in the original Representation also amounts to a breach of trust.  In the original Representation, the Representor complained about having regard to D’s wishes and adding him as a beneficiary, and not having regard to her wishes.  The application to set aside the appointment of D and his issue was therefore foreshadowed in the original Representation.  Accordingly, it is only the declaration seeking to set aside the distribution made in September 2020 that was not expressly foreshadowed in the original Representation. Even then, however, the claim that this distribution was made in breach of trust follows on from the appointment of D and his issue said to be in breach of trust and the failure to have regard to the Representor’s wishes.

132.   I have referred to the allegations in the original Representation and the amendments because the focus of the submissions of Advocate Baker for the Representor was much more on alleged breaches of the money laundering order by K, rather than what appears to be at the heart of the Representation and the Amended Representation, namely the failure of the First Respondent to have regard to the wishes of the Representor as the alleged Settlor of P (and N), as well as being the principal beneficiary during her lifetime.  As I put to Advocate Baker during the hearing, the statements made by K, where Advocate Baker expressed his criticisms, were supportive of the Representor’s case.  This emphasis and the emphasis on whether or not the First Respondent had caused significant tax losses did not sit with the overall or main focus of the Representor when looking at her original Representation and Amended Representation.

133.   Like Commissioner Bailhache at paragraph 35 of his judgment, I do not consider, notwithstanding the amendments to the Representation, that the approach of the First Respondent has altered. The best that can be said in the Representor’s favour is that these proceedings are a combination of a claim for breach of trust for appointments made in breach of trust and an administrative action designed to determine whether the removal of the First Respondent is in the interests of the beneficiaries as a whole principally because of the alleged failure to recognise the Representor’s status as Settlor and principal beneficiary and the appointments made as a consequence of the failure to have regard to the Representor’s wishes or to consult with her. In this case the breach of trust claims came long after the removal request. The remaining complaints are all directed at the First Respondent not acting in the interest of the beneficiaries as a whole. I therefore consider that the question of what should be made public should await the outcome of any trial having regard to the different possible outcomes as set out at paragraph 19 of the judgment of Commissioner William Bailhache in December 2021 referred to at paragraph 125 above.

134.   I also consider that what remains at the heart of these proceedings is whether or not the First Respondent should be removed with the breach of trust claims being added, but being based on the same factual matters relied upon to remove the First Respondent. The question of removal, as the August 2021 judgment noted, is one that is determined by reference to the welfare of the beneficiaries.  When the Royal Court is sitting to determine such applications by reference to this test and where sensitive information about the trust or its assets is being laid before the Court, I consider that the same considerations as analysed in Kwong should ordinarily apply to such applications so that the same policy referred to at paragraph 39 of Kwong also applies to removal applications.

135.   However, as emphasized in Delphi, each case must be considered on its own facts and therefore what is stated in paragraph 39 of Kwong and this judgment is only a policy.  The starting point still remains open justice with  the discretion having to be exercised for each case.  The starting point of open justice does not however prevent this court from formulating a policy as to when it might depart from that principle. In that regard although in the Isle Of Man removal cases are ordinarily held in public, the following observations forming part of the extract from Delphi cited above are pertinent and bear repetition:

 “It is unwise to be dogmatic as to when the court should sit in public and when in private to hear applications by trustees for directions. The court should adopt a principled, pragmatic and flexible approach and can review the question whether to hear a matter in private in the course of the proceedings. Each claim for directions and each application to sit in private must be considered on its own facts, circumstances and merits.”

136.   Paragraph 39 of Kwong is also significant because the Court also recognised the importance of publishing judgments and explaining its decisions so it could be held to account in that way.  That can include naming trustees and describing any breaches of duty even if the identity of beneficiaries or trust assets is anonymised.  This allows for findings of misconduct to be put into the public domain.

137.   In paragraph 19 of his December 2021 Judgment, to which I have already referred, Commissioner Bailhache also noted the possibility of the Representor’s complaint being found to be tactical.  I share that concern in relation to the present application which is to determine that the entire proceedings should be public when this would have the consequence of all the information being put in the public domain unless the Court made different orders.  In my judgment it is significant that there was no explanation from Advocate Baker as to why the application was being made at this stage, when it had been referred to by Commissioner Bailhache in December 2021 and was raised by Advocate Speck, as the then advocate for the Representor, in September 2022 but was not pursued further.  While Al Thani suggests that the burden is on those seeking to displace an application of a privacy order in a particular case, that principle focuses on an application at the outset to determine proceedings in private.  The authorities do not address how the Court should approach applications to hear proceedings in public where the Court has previously ordered that matters should be heard in private and no party has challenged that decision; notwithstanding indicating it might.  When an application comes late in the day, for a Court being asked to re-consider previous decisions on whether or not proceedings should be in public or in private, the Court should at least have an explanation as to why the proceedings, having previously been determined to be in private, should henceforth be held in public.  In this case, no explanation was forthcoming, which I concluded I was entitled to take into account as part of deciding whether or not these proceedings should continue to be held in private, or whether they should now be heard in public.

138.   The material relied upon by Advocate Baker concerning the conduct of the First Respondent and statements made to third parties was also not sufficient to persuade me that the current privacy order should be varied.  It is not at the heart of the Representor’s case, but only part of its attack on the First Respondent.  The Representor also has the benefit of material to conduct that cross-examination which does not require the current privacy order to be varied.  In addition, having heard all the evidence, if the Jurats conclude that a breach of the Money Laundering Order may have occurred, this Court has power to refer any material it wishes and any findings it has made to the Attorney General or to the Jersey Financial Services Commission.  Whether that will be the outcome in this case is very much an open question.

139.   The holding of proceedings in public would also make the running of the trial practically more difficult because, on the Representor’s own case at least, sixteen hundred documents contain confidential information.  No doubt the First Respondent and the Second Respondent will contend that there is more material that is confidential which should not be put in the public domain because it has been referred to in a public hearing, in particular, because of possible damage to Company 1.  Whether or not there are plans to sell that company, which is itself disputed, the existence of a bitter family dispute is unlikely to do anything other than damage a significant asset.  The Representor’s approach in this case therefore gives rise to real practical difficulties of the Court potentially on a frequent basis having to switch between public and private hearings. This is an additional factor against granting the Representor’s application.

140.   In this case, N is a stranger to the present dispute, but is the ultimate co-owner of Company 1.  The effect of making the proceedings public would also be to make public the entirety of the pleadings and any evidence referred to in previous hearings which were held in private, as well as this hearing.  Commissioner Clyde-Smith in August 2021 was very concerned about information being shared with N.  Yet the order now sought by Advocate Baker would have that precise effect.  The amendments to the Representation since the August 2021 judgment do not alter those concerns.  If anything, they have increased by virtue of the application to share all the discovery with F, E and Harneys.

141.   The order sought by Advocate Baker is also not necessary for the parties to file evidence in reply. The evidence that the Representor wishes to seek from F is summarised in her third affidavit sworn on 9 February 2024, and focuses on specific criticisms of F.  In relation to these criticisms, in my judgment they were for the most part foreshadowed in the pleadings filed by the First and Second Respondents.  Accordingly, this application could have been brought earlier to permit F to give evidence-in-chief, rather than evidence in reply.  Notwithstanding this I accept the Representor’s submission that it would be wrong to prevent the Representor from calling evidence in reply from F in relation to matters not within her knowledge.  The requirement of evidence in reply, however, does not require proceedings to be heard in public.  Instead that can be dealt with by varying current orders to permit particular paragraphs of affidavits and related documents to be put to F.  As part of his response, F is also entitled to refer to any documents in his possession which he holds, independent of the discovery provided by the First and Second Respondents – see paragraph 112 above.

142.   The reference to the First Respondent providing inaccurate information to third party advisers only forms a small part of the pleading at paragraph 13b and one line of the pleading at paragraph 21(h).  The latter has been there since the original Representation.  The same applies to criticisms of whether or not K has caused a significant tax liability.  The only complaint is that he took undue risks by taking decisions in relation to Company 6 outside Country 1 and therefore creating an alleged tax risk.  This is referred to at paragraph 21(k) and forms a small part of the Amended Representation.  These are only part of the Representor’s complaints.

143.   The evidence that F was permitted to file in reply was therefore in respect of the following paragraphs:

(i)        The specific paragraphs of the Second Respondent’s affidavit referred to at paragraph 14 of the Representor’s third affidavit;

(ii)       Paragraphs 8(c) and 11 of B’s affidavit as referred to at paragraph 16 of the Representor’s third affidavit, and

(iii)      the paragraphs of the K affidavit referred to at paragraph 17 of the Representor’s third affidavit.

144.   In each case, the Representor was permitted to share with F any documents referred to in the relevant paragraphs of the affidavit where F was permitted to file evidence in reply, together with the documents referred to at paragraph 15 of the Representor’s third affidavit.

145.   I also gave IQEQ permission to file affidavit evidence in reply to paragraphs 127 to 129 of K’s affidavit of 19 January 2024.  As paragraph 128(iv) refers to a failure to agree the terms of a shareholders agreement, the matters referred to at 136 and 137 of the affidavit of K contain more detail about the failure to agree a shareholders agreement referred to at paragraph 128(iv) and accordingly, as part of discussing matters with IQEQ paragraphs 136 and 137 may also be referred to IQEQ.

146.   Both F and IQEQ are also free to refer in their evidence in reply to any other material they already possess even if it is also material that has been disclosed in these proceedings and is otherwise subject to the privacy orders made in these proceedings (see paragraph 19 of Al-Thani referred to above) 

147.   The Representor’s wish to discuss paragraphs 159 to 160 with IQEQ is not however relevant to the issues raised by the Representation and the Amended Representation.  This dispute is not a forum in which to air areas of disagreement between N and P generally.  Rather, the issue is the First Respondent’s approach to IQEQ and the allegation that the First Respondent failed to establish any kind of cooperative and effective relationship with IQEQ.

148.   The requests to adduce evidence from E were refused.  The two issues where he was referred to was that firstly he had poorly advised IQEQ.  This is not an issue that requires determination in these proceedings.  Secondly, E was a witness to a document signed in 2012 which recorded the Representor as being the principal beneficiary.  That document is supportive of the Representor’s case.  It is not therefore clear why E is required to give evidence in respect of such a document. In addition, the conflict issues identified by Commissioner Clyde-Smith in August 2021 have increased because E is now a director of the private trust company that is trustee of N, along with one of his colleagues, F and one other individual.  This conflict outweighs the Representor being permitted to adduce evidence from E on the very limited issues where he is referred to.

149.   In relation to Harneys, they are also conflicted because they act for the new trustee of N.  If F wishes to obtain his own advice from Jersey lawyers on any evidence he is asked to give as permitted by this judgment, there are plenty of other lawyers who are not conflicted who he is free to consult.  The Representor can make such an application if F wishes to seek such legal advice. 

150.   To address Advocate Baker’s concern that by only allowing F or IQEQ to see certain documents and certain paragraphs of the evidence to file evidence in reply, they might be unfairly attacked when cross examined as they had not seen all the material before the Court, I also ordered the First and Second Respondents to disclose no later than twenty-eight days prior to the commencement of the trial any other documents they wished to refer to as part of cross-examination of F or IQEQ.  The documents could then be shown to the witness concerned. This was to address the concern that F or IQEQ may be criticised unfairly because they would have not had a chance to review all the documentation in giving their evidence.  This order struck the appropriate balance between not preventing the Representor from exploring issues with witnesses where the Representor wished to file evidence in reply and maintaining the confidentiality of the current privacy regime.

151.   For all these reasons, the application to make these proceedings public was refused; the applications for F and IQEQ to file evidence in reply were granted in part.  The applications for Eto file evidence in reply and for the discovery to be shared generally including with Harneys were refused.  

Authorities

Representation of C re P Trust [2021] JRC 205. 

C Trust Company Limited [2010] JCA 017. 

Re Delphi Trust [2014] 16 ITELR. 

Jersey Evening Post Limited v Al Thani [2002] JLR 542. 

Re S Settlement [2001] JLR Note 37. 

Money Laundering (Jersey) Order 2008. 

HSBC Trustee CI v Kwong [2018] JRC 051A. 

Trusts (Jersey) Law 1984. 

G v A [2000] JLR 56. 

Internine Azali Trust [2006] JLR 195. 

The C Trust [2012] JRC 098. 

In the Matter of Sanne Trust Company Limited [2009] JRC 025B. 

M Trust [2012] (2) JLR 51. 

In Re Buckton [1907] 2 Ch 406