Case summarIES
The
following key indicates the court to which the case reference refers:
JRC Royal Court of Jersey
GRC Royal
Court of Guernsey
JCA Jersey
Court of Appeal
GCA Guernsey
Court of Appeal
JPC Privy
Council, on appeal from Jersey
GPC Privy Council, on appeal from Guernsey
ADVOCATES AND SOLICITORS
Disciplinary
proceedings—sanctions
Att Gen v Harrigan
[2022] JRC 064 (Royal Ct: Le Cocq, Bailiff, and Jurats Ronge, Averty
and Hughes).
The Attorney General; RCL Morley-Kirk for the
respondent.
The court
acceded to an application by the Attorney General for an order that a solicitor
be struck from the roll of solicitors of the court. The solicitor had
appropriated £28,250 for her own purposes from the account of a vulnerable lady
who she was looking after as a client of the firm and in respect of whom she
had been appointed the curator. She was serving a sentence of imprisonment
having pleaded guilty to one count of fraudulent conversion.
Held, striking off the solicitor:
(1) Seriousness of case. It was difficult
for the court to identify a more egregious breach of fiduciary duty and trust
than a breach not only of the oath of office of solicitor of the court but of
the oath of curator.
(2) Need for complete trust in legal
profession. Members of the public must be able to trust members of the
legal profession totally to act with honesty and probity. In Att Gen v Michel,[1] the court adopted, in explaining its
approach to striking off, the decision in the case of Bolton v The Law Society.[2] The
Master of the Rolls, Lord Bingham, gave a full explanation as to the importance
of trust in the legal profession. The most fundamental purpose of disciplinary
sanctions was
“to maintain the
reputation of the solicitors’ profession as one in which every member, of
whatever standing, may be trusted to the ends of the earth. To maintain this
reputation and sustain public confidence in the integrity of the profession it
is often necessary that those guilty of serious lapses are not only expelled
but denied re-admission.
This was echoed in the case of the Att Gen v Manning.[3]
BANKRUPTCY
Appeals against decision of Viscount—assignment of
claims
Booth v Viscount [2022]
JRC 062 (Royal Ct: JA Clyde-Smith, Commr, and Jurats Blampied and Austin-Vautier).
DR Wilson for the first defendant; SA Hurry for the
second defendant.
The appellant,
now discharged from his désastre bankruptcy,
sought a reassignment by the Viscount of a claim in negligence that he
considered he had against a firm of surveyors. The Viscount had declined to
pursue this claim during the bankruptcy and now declined to re-assign the
benefit to him. He appealed against the decision.
Held:
(1) Test for appeal of decision of Viscount.
The test on an appeal against a decision of a public authority vested with
discretion, such as the Viscount, had been refined in an earlier 2016 judgment
in relation to the appellant’s désastre (Booth v Viscount[4]):
(a) A decision
is open to appeal: (i) if it does not fall within the
range of reasonable responses open to the decision-maker; (ii) if the decision
maker has acted illegally in that the decision is beyond the limits of their
power; (iii) if the decision maker has acted illegally in taking account of
irrelevant considerations or failing to take account of relevant ones; (iv) if
there has been procedural impropriety.
(b) In
addition, where a public authority is exercising a discretion to which the
Human Rights (Jersey) Law 2000 applies, a rationality review is likely to be
insufficient. While the standard of scrutiny will depend on the circumstances,
the law generally speaking requires an exacting analysis of the factual case
advanced in defence of the measure, in order to
determine (i) whether its objective is sufficiently
important to justify the limitation of a fundamental right; (ii) whether it is
rationally connected to the objective; (iii) whether a less intrusive measure
could have been used; and (iv) whether, having regard to these matters and to
the severity of the consequences, a fair balance has been struck between the
rights of the individual and the interests of the community.
(2) Assignment back to debtor of alleged cause
of action not pursued. The role of the Viscount in a désastre is similar to that the
Official Receiver in England. The Official Receiver Guidance advises that,
while a cause of action may be re-assigned if the Official Receiver has decided
not to pursue it, this is not automatic. The rights of the potential defendant
also come into play if, for example, they would be exposed to vexatious
litigation. This was consistent with English case law.
(3) Merits of the claim were a relevant factor
in this case. The Royal Court distinguished the Court of Appeal’s view in Booth v Viscount[5] that the merits of a claim purported to
be held by the bankrupt are irrelevant to a decision of the Viscount whether or
not to assign the claim back to the bankrupt in the event that it is not pursued
by the Viscount for the benefit of creditors. The circumstances of the present
claim were now different, and in particular it could not be right for the
Viscount, as an executive officer of the court, to agree to assign back to a
former bankrupt a cause of action that was frivolous in the sense of being
hopeless, futile or misconceived.
(4) Decision. In the court’s view the
alleged claim against the form of surveyors was indeed hopeless or futile. The
decision of the Viscount accordingly fell within the range of reasonable
responses and the appeal was accordingly dismissed.
CIVIL PROCEDURE
Order of
justice—amendment—leave to amend—requirements for pleading fraud
Cook v Clapham [2022]
JRC 091 (Clarke, Judicial Greffier)
The plaintiff
appeared for himself; D Evans for the first and second defendant; A Kistler for the third defendant; DP Le Maistre
as amicus curiae
The plaintiff, acting in person, sought
leave to amend his order of justice, including the addition of an allegation of
fraud.
Held,
refusing leave to amend:
(1) Approach of court. Whether to grant leave to amend is a matter of
discretion guided by where justice lies (Blenheim
Trust Co Ltd v Morgan[6]).
The purpose of pleadings is to give a party fair notice of the case it has to
meet and to clarify the issues (In re
Esteem Settlement[7]).
An allegation of fraud must be distinctly and sufficiently particularised
(Makarenko v CIS Emerging Growth Ltd[8]).
(2) Pleading fraud. As regards the
circumstances and manner in which fraud may be pleaded, the Judicial Greffer referred further to Brakspear v Nedbank Trust (Jersey) Ltd[9]
in which the court quoted with approval from the judgment of Flaux, J in JSC Bank
of Moscow v Kekhman:[10]
(a) The
claimant does not have to plead primary facts which are consistent with
dishonesty. The correct test is whether or not, on the basis of the primary
facts pleaded, an inference of dishonesty is more likely than one of innocence
or negligence.
(b) At the
interlocutory stage, when the court is considering whether the plea of fraud is
a proper one or whether to strike it out, the court is not concerned with
whether the evidence at trial will or will not establish fraud but only with
whether facts are pleaded which would justify the plea of fraud. If the plea of
fraud is justified, the case must go forward to trial and assessment of whether
the evidence justifies the inference is a matter for the trial judge.
This did not diminish the fundamental principles that
an allegation of fraud must be distinctly and sufficiently particularised
(so that the defendants may know exactly what it is that they are accused of
doing fraudulently) and that it will not be sufficiently particularised
where the facts are consistent with innocence.
(3) Disposal. In the present case, the
plaintiff had failed to satisfy these principles and leave to amend was
refused.
CRIMINAL LAW
Drugs—importation—sentence
Barras v Law Officers [2021] GCA045 (GCA:
Perry, Crow and Storey, JJA)
C Tee for the first appellant; S Steel for the second
and third appellants; C Dunford for the Law Officers.
The appellants
sought leave to appeal their drug trafficking sentences. All had been sentenced
to periods of imprisonment. In each case the appellants raised a point of
principle, namely that the sentencing guidelines set out in the decision of the
Court of Appeal in Richards v Law Officers (“the Richards guidelines”) were out of date,
resulted in manifestly excessive sentences and needed to be reviewed, at least
in cases where the amount of drugs imported was very small and were intended
for personal consumption. The appellants also contended that the sentences
imposed in their respective cases should be reviewed on certain other grounds
(which were not of wider interest).
Held: leave to appeal refused.
(1) For the
following reasons, the decision in Richards
was not out of date, did not need to be revised, and did not lead to sentences
that were generally manifestly excessive.
(a) There was
no good reason to justify a relaxation of the policy which in 2002 motivated
the Court of Appeal to formulate the Richards
guidelines. At that time, the president’s preliminary conclusion was that the
level of drug trafficking had not abated and there were signs of a growth in
activity. In the present case, the appellants did not dispute that drug
trafficking remained a serious problem in Guernsey and to the contrary sought
to rely on increased importation activity since 2002. Relying upon a report
detailing the marketplace in Guernsey, the panel did not accept that the current
levels of sentencing were ineffective as a deterrent nor that lowering
sentencing levels would not increase offending.
(b) The Richards guidelines contained sufficient
flexibility to accommodate mitigating circumstances such that it was not
appropriate to set a lower starting point for very small quantities of drugs
nor to have an exception applicable to drugs imported solely for personal use.
(c) Evidence in
relation to the sentencing regimes in other jurisdictions was not of assistance
on the point of principle. The starting point was that the Guernsey courts must
determine the appropriate sentencing levels for offences committed in Guernsey
and that, in doing so, they may or may not derive assistance from what is done
in England & Wales or in any other jurisdiction (Wicks v Law Officers).
(d) There are
some offences where the social conditions in the Bailiwick call for a different
approach to that taken in England & Wales, and a well-established example
is drug importation, which has for many years been visited with much heavier
sentences in this jurisdiction than in England (Forno v Att Gen).
(e) The
appellants’ criticisms of the Richards
guidelines were overstated for a number of reasons, including that sentencing
is always a matter of the court’s discretion and the starting points in the Richards guidelines are just the
beginning of the sentencing exercise. The constitutional role played by the Jurats in the sentencing process reflected and gave
expression to the values of the wider Guernsey community. Also, unlike in
England & Wales, in Guernsey one court (the Royal Court) dealt with
sentencing of serious offences which was conducive to consistency of approach
and fairness.
(2) The
appellants’ sentences were not excessive on the various other grounds they put
forward.
CRIMINAL
PROCEDURE
Fitness to
plead—applicable test
Att Gen v
Taylor [2022] JRC 334 (Royal Ct: Clyde-Smith, Commr,
and Jurats Christensen and Cornish)
SC Brown,
Crown Advocate for the Attorney General; RCL Morley-Kirk for the defendant.
The defendant was charged with indecent
assault. The question was raised as to whether the defendant had capacity to
participate effectively in the proceedings.
Held:
(1) Fitness
to plead. The issue of a defendant’s capacity to participate effectively in
the proceedings is governed by the Mental Health (Jersey) 2016 and in
particular arts 55 and 57. Article 57 enshrines the principles enunciated by
the Royal Court in Att Gen v O’Driscoll.[14] They differ from those which apply in
England (derived from R v Pritchard[15]) in requiring that the defendant should
have been capable of making rational decisions in relation to his participation
in the proceedings. But as the Court of Appeal said in Harding v Att Gen,[16] the test under Jersey law is not any
different in principle from that which applies in England.
(2) Relevant
English decisions followed. In R v
Marcantonio,[17] the English Court of Appeal set out
definitively how the test under English law is to be applied in a 21st century
medico-legal context. Assistance in applying the Jersey test could be found in
part of the judgment of Lloyd Jones, LJ:
(a) The court is required to undertake an
assessment of the defendant’s capabilities in context. This should be addressed
not in the abstract but in the context of the particular case.
(b) The degree of complexity of different legal
proceedings may vary considerably. Thus the court should consider, for example,
the nature and complexity of the issues arising, the likely duration of the
proceedings and the number of parties.
(c) It is in the interests of all concerned that
the criminal process should proceed in the normal way where this is possible
without injustice to the defendant.
(d) Moreover, such an approach is essential, given
the emphasis which is now placed on the necessity of considering the special
measures that may assist an accused at trial; see R v Walls[18]; and in Jersey, art 57(4) of the 2016 Law.
Presumption
of capacity; disposal. As stated in O’Driscoll, there is a presumption of sanity or capacity.
Neither party in the present case sought to displace that presumption nor did
either expert advise to the
contrary. The presumption therefore remained in place. In any event, the court found on
the balance of probabilities that the defendant was capable of participating
effectively in the proceedings.
EVIDENCE
Character—previous
conduct of accused
Att Gen v Baska
[2022] JRC 059 (Royal Ct: MacRae, Deputy Bailiff,
sitting alone)
RCL Morley-Kirk for the Attorney General; DA Corbel for the defendant.
The court considered in particular the position where the
admission of bad character evidence is agreed by the prosecution and defence.
Held:
(1) Agreed bad character
evidence. Bad character evidence can be admitted by way of agreement
between the parties. Bearing in mind the similarity of the relevant legislation
in England and Jersey it is appropriate, and frequently essential, to consider
English practice and procedure in relation to the statutory provisions.
(b) Role of court. The
Crown Court Compendium notes that caution is required in admitting evidence on
this basis. Adopting this approach:
(a) It is wise for the judge to seek clarification from the advocates
as to what is agreed, and for what purpose, so that the judge can consider how
best to direct the jury or Jurats.
(b) It is therefore essential in every case that advocates draw to the
attention of the judge before trial any agreed bad character evidence. The court
has a duty in relation to admissions in relation to bad character (and, indeed,
all admissions) to ensure that only relevant evidence goes to the jury or Jurats and that such evidence is presented in the shortest
and clearest way.
(c) If the parties have agreed that bad character evidence should be
adduced which is not relevant then the judge should direct that the draft
admissions be amended before they are placed before the jury or Jurats.
(d) In every case, the advocates should draw to the attention of the
trial judge the admissions that it is proposed to be adduced well before they
are read to the jury or Jurats or placed in the jury’s
or Jurat’s bundle.
Character—previous
conduct of non-defendant
Att Gen v
PMB [2022] JRC 335 (Royal Ct: MacRae, Deputy
Bailiff, sitting alone)
EL Hollywood
for the Crown; L Sette for the defendant.
The court considered the principles for the
admission of bad character evidence regarding a non-defendant, in this
case two prosecution witnesses. Article 82J(1) of the
Police Procedures and Criminal Evidence (Jersey) Law 2003 provides:
“(1) In criminal proceedings
evidence of the bad character of a person other than the defendant is
admissible if and only if—
(a) it is important explanatory evidence;
(b) it has substantial probative value in relation to a matter
which—
i(i) is a matter in issue in the proceedings, and
(ii) is of substantial importance in the context of the case as a
whole; or
(c) all parties to the proceedings agree to the evidence being
admissible.”
Held, as to the legal principles:
(1) Test for admission of bad character
evidence of non-defendant. The test under art 82E for admissibility of
evidence of a defendant’s bad character is quite different from the test for
admission under art 82J of a non-defendant’s bad character. The circumstances
in which a defendant’s bad character may be admitted as evidence under art 82E
are wider in scope than the circumstances in which the character of a
non-defendant may be admitted.
(2) Approach of court. The relevant
provision in the Jersey legislation is identical (although differently ordered)
to the provision in the Criminal Justice Act 2003. It is therefore appropriate
to have regard to the English authorities, albeit that they are not binding. The
court referred with approval to the current approach in England and Wales in
cases where the equivalent to art 82J(1)(b) is relevant.
This was settled by the English Court of Appeal in R v Brewster[19]:
(a) The trial
judge’s task is to evaluate the evidence of bad character in order to decide
whether it is reasonably capable of assisting a fair-minded jury to reach a
view whether the witness’s evidence is, or is not, worthy of belief. Only then
can it properly be said that the evidence is of substantial probative value on
the issue of creditworthiness. The question is then whether creditworthiness is
a matter in issue which is of substantial importance in the context of the case
as a whole. This is a significant hurdle. If this is shown, the next question
is whether the bad character relied upon is of substantial probative value in
relation to that issue. This will depend principally on the nature, number and
age, of the convictions.
(b) A conviction need
not, in order to qualify for admission in evidence, demonstrate any tendency
towards dishonesty or untruthfulness. The question is whether a fair-minded
tribunal would regard the conviction as affecting the worth of the witness’
evidence.
(c) There is no residual
additional discretion (except in the exercise of case management) to refuse the
admission of the evidence. Such discretion as there is will be exercised, for
example, in the manner of presentation of the evidence and the restriction of
cross-examination to relevant matters.
LIMITATION OF ACTIONS
Prescription—personal action
Leopard v NFU Mutual Insurance Socy Ltd [2022] GRC 014 (Royal Ct: Roland, Deputy
Bailiff)
N Barnes for
the appellant; S Geall for the first respondent.
This was an appeal of the Court of Alderney’s decision concerning two preliminary issues,
that: (1) the prescription period in Alderney for
personal actions was six years not thirty years; and (2) applying the six year
period, the claim by the appellant had prescribed against the first respondent.
Held: appeal
dismissed.
(1) The prescription period in Alderney for personal actions was six years, by virtue of the
Order in Council entitled Loi relatif aux Prescriptions of 1889 which reduced the
period from ten years to six years (an earlier Order in Council having reduced
the customary law period of thirty years to ten years). Contrary to the appellant’s
suggestion, the Orders in Council applied in Alderney
even though they did not specifically state that the Island was included in
their geographical extent and Laughton v
Main was not wrongly decided to the extent that
it proceeded on the basis that the law on prescription for personal claims in Alderney and Guernsey were the same.
(2) The appellant had failed to demonstrate
that the Court of Alderney was wrong in law to
conclude that his claim was prescribed. The implied term as argued for by the
appellant that the insurer would “settle any [insurance] claim within a
reasonable time” was clearly not recognised at common
law in England & Wales (citing MacGillivray on
Insurance Law, Callaghan
v Dominion Ins Co, and Sprung
v Royal Ins (UK) Ltd) and there was no reason why this approach
would not apply in this jurisdiction. There was no proper basis to imply such a
term into the insurance contract and the appellant had failed to make out why
the contract required the term in order to give the contract business efficacy.
TRUSTS
Beneficiaries—impounding beneficial
interest
Patel v JTC Trust Co Ltd [2022] JRC 089
(Thompson, Master of the Royal Court)
The plaintiffs
were not convened and did not appear; JP Speck for the defendant; D Evans for
the first third party and the sixth to twelfth third parties; PG Nicholls for
the second to fifth third parties.
Members of a family entered into an
agreement regarding the restructuring of certain discretionary trusts. The
plaintiffs were beneficiaries but had not been parties to the agreement. Instead,
they executed certain deeds of disclaimer. They sought to set aside the deeds
of disclaimer as against the defendant trustee on the basis that the disclaimers
had been procured in the absence of informed consent or alternatively were void
by virtue of them being procured by mistake and/or under duress and/or undue
influence. The trustee joined the other beneficiaries of the discretionary
trusts as third parties, claiming relief from them if it is held liable. The
trustee claimed inter alia that all
or part of the interest of the third parties should be impounded by way of
indemnity pursuant to art 46(1) of the Trusts (Jersey) Law 1984.
Article 46 provides:
“(1) Where a trustee commits a breach of
trust at the instigation or at the request or with the consent of a
beneficiary, the court may by order impound all or part of the interest of the
beneficiary by way of indemnity to the trustee or any person claiming through
the trustee.
(2) Paragraph (1) applies whether or not such
beneficiary is a minor or an interdict.”
Held, declining to grant relief under art
46(1):
(1) No
impounding of interest of discretionary beneficiary. All the beneficiaries
were discretionary beneficiaries. The court does not possess the power under art
46 to impound the interest of a discretionary beneficiary. A discretionary
beneficiary has no right to trust assets unless or until the trustees decide in
their discretion to make an appointment to him and he then becomes beneficially
entitled only to such assets as are appointed to him; the beneficiary’s only
right is to be considered for the exercise of the trustee’s discretion and to
compel due administration of the trustee’s duties: In re Tantular[24]; Crociani v Crociani[25]; Kea Invs v Watson.[26] Accordingly, there was nothing that could
be impounded under article 46.
(2) Separate
equitable power to direct that beneficiary instigating or acquiescing in breach
of trust does not benefit. The court has a separate equitable power to
direct that distributions are not made to a beneficiary who has instigated or
acquiesced in a breach of trust by a trustee which has been ordered to
reconstitute the trust fund: Crociani. If the defendant in this case were after trial
required to reconstitute any trust, it could seek directions as to who might
benefit from that trust. However, if the defendant wished to seek such relief,
that relief should be pleaded and what order the defendant is asking the court
to make should be set out and the reasons why.
Costs—allocation of costs
In re J and K Trusts [2022] GRC0013
(GRC: Collas, Lieut. Bailiff)
A Lyne for the trustee; J Le Tissier
for beneficiary A; A Davidson for beneficiary B; M Jones for the unborn and
unascertained beneficiaries; J Greenfield for the protectors
This case concerned two related family
trusts the subject of the Court of Appeal decision in In re K Trust concerning the construction of the
declaration of trust for the K Trust.
The trusts each had the same settlor and
trustee (“the trustee”). Following the Court of Appeal decision, the advocates
for the principal beneficiary of the J Trust (“beneficiary A”) requested the
resignation of the trustee on several grounds, including conflicts of interest.
Acting on advice from leading counsel, and its Guernsey advocates, the trustee sought
a declaration and orders that the trustee did not have an unauthorised
conflict of interest and/or the conflict was authorised
by the trust instruments or alternatively, proposing methods for managing any
conflicts. In response beneficiary A lodged a removal application. The trustee
later resigned and accordingly the applications became otiose, but the costs of
the applications remained to be decided. Beneficiary A’s advocate relied upon
the decision in In re E Trust as
authority for the proposition that, where a trustee was faced with a plain and
obvious conflict of interest and failed to resign but applied to the court
seeking directions, it could not be remunerated and was not entitled to an
indemnity from the trust fund.
Held:
(1) Nothing put forward by beneficiary A
justified depriving the trustee of its costs. Observed that the key aspects of
the nature of a fiduciary duty identified by Millett, LJ in Bristol & West Bldg
Socy v Mothew and applied to Jersey in In re E Trust were equally applicable in
Guernsey
(2) As to the allocation of costs between
the two trusts, the costs were to be borne out of the J Trust as the applications
were advanced for the benefit of beneficiary A and the J Trust (Re Buckto ).
Trust assets—mistake by settlor/donor
Representation of
A, re the E Settlement [2022] JRC 052 (Royal Ct: W Bailhache, Commr, and Jurats Ramsden and Cornish)
RJ McNulty for the representor;
the respondents did not appear.
The representor, as economic settlor, applied under art 11
and/or art 47E of the Trusts (Jersey) Law 1984 to have a declaration of trust
constituting the E Settlement set aside on the grounds of mistake, with further
relief. The representor argued that he had made a
mistake in failing to recognise that HMRC might be
able to reopen the question of his domicile. It remained uncertain whether HMRC
might successfully contend that the representor was
UK-domiciled but if they did a substantial inheritance tax liability would fall
on the representor or the trust.
Held:
(1) Test under art 11. The court noted that
its approach under art 11 was well settled. The court considers the facts of
the case against three questions: (a) Was there a
mistake on the part of the representor in relation to
the establishment of the trust or the transfers of assets into trust? (b) Would
the trust or transfers into trust not have been made but for the mistake? (c)
Was the mistake of so serious a character as to render it just for the court to
make declaration?
(2) Issues of domicile. Although the law of
domicile was not always straightforward, the court considered that a person in
the position of the settlor would generally be expected to have a firm grasp of
the headline issues.
(3) Mistaken tax-based decisions and mistake as
to risks. As had been said in earlier cases, there was something
fundamentally unattractive about the court being asked to come to the rescue of
those who have made arrangements with a view to saving themselves large amounts
of tax, only to find later that for other reasons those arrangements were not
as successful as had been contemplated. It was important to emphasise
that there was all the difference in the world between a settlor taking a
calculated risk in making particular arrangements and a settlor who is
genuinely mistaken about the risks which he is undertaking. In the former case,
there should be no sympathy. He gambled and lost. In the latter case, the court
looks with more sympathy on such a settlor because although his motivation—saving
tax—remains the same, he carries no personal culpability, albeit his
professional advisers probably do. The approach which the court has taken on
many occasions in the past has been to relieve the settlor in the latter case
from having to engage in risky litigation alleging negligence against
professional advisers, with all the difficulties which may be incurred either
with prescription, liability, or remoteness of damage. Often, settlors in that
position do not have deep pockets with which to fund such litigation, whereas
the defendants or their insurers do, and there is frequently, perhaps almost
invariably, the substantial stress of litigation often in the twilight years of
the settlor’s lifetime.
(4) Court needs to see all relevant documents.
The representor’s affidavit exhibited an amount of
correspondence between the settlor and his lawyers at the relevant time but he
did not waive privilege. Proceeding in this way in theory allows too much
latitude to a representor to make a partial
disclosure of the true position in circumstances where experience shows the court
will not have the benefit of contested argument. It was essential that representors seeking relief of the kind requested should
provide all relevant correspondence and file notes for the court’s
consideration. This was likely to be essential in enabling the court to make a
proper assessment as to the merits of the settlor’s claim that he or she has
made a mistake.
(5) Application of test on particular facts.
As to the three questions, the court was in this case nevertheless satisfied on
balance on the facts that this was an appropriate case to grant relief on the
facts under art 11.
(6) Jurisdiction to make consequential orders
in relation to art 11. Where a trust is set aside, certain supplemental
orders are invariably needed. The power to make any necessary supplemental
orders is specific and statutory in relation to applications under art 47E and
related provisions (art 47I). There is no specific power in relation to art 11.
The court confirmed that it had jurisdiction both under art 51 (its general
power to make orders concerning administration of a trust) and under its
inherent jurisdiction to make supplemental orders in a case where a trust is
set aside under art 11. Accordingly the court made the common supplemental
orders protecting the trustee’s reasonable remuneration and rights of
reimbursement for expenses and relieving it from any past liability for its
administration of the trust arising only as a result the fact that the trust
had been void from the start and the assets strictly held on a bare trust for
the settlor.
Costs—trustee
indemnity
Powers of
court—disclosure of trust documents
Fort Trustees Ltd
and Balchan Management Ltd v ITG Ltd and Bayeux Ltd
[2022] GRC 015 (Royal Ct: McMahon, Bailiff)
P Richardson for the applicants; J Wessels
for the respondents.
This was a
judgment in the long-running litigation concerning the Tchenguiz
Discretionary Trust (“the TDT”). The respondents were the original trustees of
the TDT (“the original trustees) until they were removed in 2010. Since that
time, there had been a considerable amount of litigation arising from this and
subsequent changes of office-holders and other issues arising from the
administration of the TDT.
The applicants
(“the current trustees”) applied for an order that the original trustees file
copies of documents that had been withheld by them on the basis of privilege,
so that the court could determine whether each claim to privilege was justified
and an order that any document where the claim to privilege was found to be unjustified
be disclosed to the applicant.
The
application for disclosure was made under ss 68 and
69 of the Trusts (Guernsey) Law 2007, however the court had regard to the Royal
Court Civil Rules 2007 in deciding what type of information would need to be
provided in relation to documents withheld.
The parties
agreed that the burden was on the person asserting privilege to establish it.
It was also common ground that a new trustee is entitled to require the former
trustee to deliver up all records, books and other papers belonging to the
trust and the Royal Court has a wide discretion in making an order for
disclosure under ss 68 and 69 of the Trusts
(Guernsey) Law 2007.
Held:
(1) Based on a
review of the lists of documents provided by the original trustees, the
original trustees had ultimately complied with the terms of the order for
disclosure meaning that there was no basis for the court or a third party to
conduct a review of the documents.
(2) Certain
documents did not fall within the terms of the disclosure order because they
were advice obtained personally by the original trustees, which did not belong
to the trust.
(3) No order
was made concerning the question of whether the current trustees should be
deprived of their indemnity for their costs of the proceedings concerning
disclosure of the documents (as submitted by the original trustees). This would
be dealt with in other proceedings, currently ongoing, concerning the priority of
creditors of the TDT.