B v Roker Trustees (Switzerland) Ltd and Strachans SA ((in Liquidation)) and Philip Jepson Egglishaw
| Jurisdiction | Jersey |
| Court | Royal Court |
| Judge | J. A. Clyde-Smith,Jurats Clapham,Blampied |
| Judgment Date | 05 July 2013 |
| Neutral Citation | [2013] JRC 136 |
| Date | 05 July 2013 |
[2013] JRC 136
ROYAL COURT
(Samedi)
J. A. Clyde-Smith, Commissioner, andJurats ClaphamandBlampied.
IN THE MATTER OF THE B FAMILY TRUST AND IN THE MATTER OF THE B CHILDREN'S TRUST
AND IN THE MATTER OF THE TRUSTS (JERSEY) LAW 1984 AS AMENDED
and
and
Advocate D. M. Cadin for the Representor.
Advocate A. D. Hoy for the First Respondent.
Service of Process Rules 1994.
Re B Settlement [2011] JLR 236 .
In the matter of the Rabaiotti (1989) Settlement [2000] JLR 173 .
Schmidt -v- Rosewood Trust Limited [2003] 2 AC 709 .
Spellson -v- George [1987] NSWLR 300 .
Trust — representation seeking disclosure of information in relation to two trusts.
By her representation dated 20 th March, 2013, the representor seeks disclosure of information from the respondents in relation to two trusts of which she believes she is a beneficiary, named (it is thought) the B Family Trust and the B Children's Trust (together “the Trusts).
The background (which we set out in very broad terms) is taken from the representation and supporting affidavits, the latter being the only evidence currently before the Court.
In or about 1986, offshore structures were set up for the representor's father.
The representor's father became a client of the predecessor of the second respondent Strachans SA (“Strachans”) in 1995, dealing principally with the third respondent Mr Philip Jepson Egglishaw (“Mr Egglishaw”) and Mr Philip de Figueiredo (“Mr de Figueiredo”). Strachans were at that time running their operations in Jersey. These were moved in the late 1990s early 2000s to Switzerland.
A number of trusts were established for the representor's father and his family, including on 1 st September, 1995, the C Trust, which wholly owned a BVI company called D Limited, which in turn owned certain property in London and cash.
In 1999 the representor's father wished to return to Australia. Mr Egglishaw was instructed to act exclusively on the guidance of the representor, who remained in London and was not subject to any attribution laws.
E-mail correspondence between the representor, her Australian tax adviser and Mr Egglishaw in 2009 shows that assets associated with the representor's family were to be placed into two new trusts, to be established by Mr Egglishaw. The first would hold primarily the available funds and the second to hold the shares in D Limited. The representor was to be a beneficiary of both trusts and at the suggestion of Mr Egglishaw, they were to be called the B Family Trust and the B Children's Trust. All of the trust documentation was retained by Strachans in Switzerland.
The representor and her advisers have assumed that the trustee of the Trusts is the first respondent, Roker Trustees (Switzerland) Limited (“Roker”). It was known that Roker was used as a corporate trustee by Mr Egglishaw and Strachans when setting up trusts and it had been trustee of the C Trust. Despite its name, it is incorporated in Nevis with two corporate directors, which are also Nevis companies. They have also assumed that the Trusts are governed by Jersey law and that belief is supported by the correspondence between Bedell Cristin and Mr Egglishaw's Swiss legal advisors Schellenberg Wittmer in 2013 which we refer to later.
Subsequent e-mails during 2010, 2011, 2012 and 2013 passing between the representor and Strachans evidence the representor's beneficial interest, for example her forwarding bills to Strachans to pay for work carried out to the London properties and requesting funds to be paid to her bank account in Australia.
In the meantime in 2005, the Australian Crime Commission had started an investigation into the misuse of tax havens by Strachans and its clients, including the representor's father. However, in late 2010, the Australian Crime Commission abandoned its investigation into the affairs of the representor's father, and he reached a “without admission” settlement over the government's civil claims.
In 2009, Mr de Figueiredo was arrested in Jersey and extradition proceedings commenced against him. He was extradited to Australia in December 2010, and pleaded guilty to conspiracy to defraud in October 2012, for which he was sentenced to 6 years' imprisonment. An Interpol warrant for the arrest of Mr Egglishaw has been issued and remains current.
In May 2012, the representor's Australian legal advisor Mr Andrew Robinson (“Mr Robinson”) met with Mr Egglishaw and his legal advisors Schellenberg Wittmer in Geneva and during the meeting Mr Egglishaw claimed that he could not deal with the assets of the Trusts nor even provide the representor with information about them, without the risk of exposing himself to money laundering or proceeds of crime charges. We pause to comment that even if in 2012 there remained a concern over the status of the funds held by the Trusts, we struggle to see how that would exonerate Roker from its duty to account for what it was holding; and no such contention was made before us.
Bedell Cristin were instructed on behalf of the representor in this matter in October 2012 and in his affidavit of 14 th March, 2013, Mr Robinson fairly, in our view, describes the correspondence between Bedell Cristin and Schellenberg Wittmer, as demonstrating a complete lack of any constructive response from the respondents. In effect, the respondents sought an exculpation from everything they had done in relation to the Trusts prior to August 2011 as a pre-condition of allowing the representor's nominated Swiss adviser to inspect the trust documents.
In August 2011, Anthony Stewart, an Australian accountant retained on behalf of the representor's family, attended a meeting at the offices of Schellenberg Wittmer in Geneva. He was allowed to see the trust documentation on screen, but was not allowed to see or take away any hard copies or original documents. His statement of 21 st February, 2013, shows that he was concerned that the opening balance was lower than he thought it should have been. When he questioned certain legal costs that had been paid, he was told they related to the legal costs incurred by Mr de Figueiredo in his extradition proceedings which had been paid out of trust assets in order, it was said, to protect those assets.
The representor requires information on the assets contained in the Trusts, not only as a beneficiary seeking to hold her trustee to account but also to properly make her Australian tax returns and avoid being in breach of Australian law. On the case presented to us there has been a wholesale refusal by Roker to account to her.
Furthermore, the representor, having been informed that trust funds had been used to pay the legal fees of Mr de Figueiredo, has reasonable grounds for concern that misappropriation of trust funds has taken place.
On 22 nd March, 2013, the Court convened Roker, Strachans and Mr Egglishaw to the representation and gave leave to serve summonses out of the jurisdiction for their appearance before the Court on 24 th May, 2013. Roker was to be served by ordinary post and, on the advice of the representor's Swiss lawyers, Strachans and Mr Egglishaw through official channels, namely in accordance with Article 3 of the Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters (the “Hague Convention”). The transmission of documents under Article 3 of the Hague Convention is governed by Section 13 of the Service of Process Rules 1994 which provide that documents for service must be lodged with the Bailiff's office for stamping and sealing and will then be forwarded to Her Majesty's Secretary of State for the Home Department for transmission to the foreign country.
Miss Jessica Jane Bermingham, an English solicitor at Bedell Cristin, explains in her affidavit of 26 th June, 2013, how she has tried to track the progress of the documents in a route which she described as highly protracted. The documents have to pass from the Bailiff's office to the Lieutenant Governor, to the Ministry of Justice in London, to the Foreign and Commonwealth Office in London, and then, as she understands it, to the Ministry of Foreign Affairs in Switzerland (the Federal Office) possibly via the Ministry of Justice in Switzerland and then ultimately to the Ministére Publique in Geneva for service. It would appear that at least six months should be allowed for this process but it was clear that the documents had not reached the Ministére Publique in time for service to be effected for the hearing on 24 th May, 2013. Apparently the way the Hague Convention operates it will now be necessary for a new summons and Act of Court to be issued and served and, adopting a cautious approach, a new hearing date of January next year would need to be proposed in respect of these respondents.
At the request of the Court Miss Bermingham has sworn another affidavit explaining in detail why service in this way was required in this case. Time does not permit us to set out that explanation in full but suffice it to say that they were advised by their Swiss lawyers that under Swiss law service under the Hague Convention operates to the exclusion of all other methods of service of foreign proceedings in Switzerland and any attempt to do otherwise could lay the representor or her advisors open to criminal charges under Article 271 of the Swiss Criminal Code. We do not know how widespread such protective provisions are internationally but it makes convening Swiss residents to foreign proceedings very difficult and impossible in any case involving urgency.
The representor has decided at this stage not to...
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