Barclays v Hsu and Others

JurisdictionJersey
CourtRoyal Court
JudgeDeputy Bailiff
Judgment Date06 January 2010
Neutral Citation[2010] JRC 3A
Date06 January 2010

[2010] JRC 3A

ROYAL COURT

(Samedi Division)

Before:

W. J. Bailhache, Q.C., Deputy Bailiff, and Jurats Clapham and Kerley.

Between
Barclays Private Bank & Trust Limited
Representor
and
(1) Cheng-Pei Hsu, on his own behalf and on the behalf of any unascertained or future issue of his
(2) The adult issue of Cheng-Pei Hsu, if any
(3) John-Ping Hsu, on his own behalf and on the behalf of any unascertained or future issue of his.
(4) Benjamin Jen-Bin Hsu
(5) Daniel Jen-Dee
(6) Ju-Tung Hsu, on his own behalf and on the behalf of an unascertained or future issue of his.
(7) Jovan Gene Hsu
(8) Joey Concord Hsu
(9) Shining Jessica Hsu
(10) Keng-Nan Hsu, on his own behalf and on the behalf of any unascertained or future issue of his
(11) Christopher Jenwen Hsu
(12) Nien-Hsi Hsu, on behalf of his minor issue, if any, and unascertained or future issue of his, and in his capacity as Executor of the Estate of his mother Nai-Cheng Hu Hsu
(13) The adult issue of Nien-His Hsu if any
(14) Tsi-Yun Hsu
Parties convened

and

Nien-Hsi Hsu (on his own behalf and on behalf of his adult and minor issue, if any, and unascertained or future issue, and in his capacity as Executor of the Estate of Nai-Cheng Hu Hsu)
Plaintiff

and

(1) Barclays Private Bank & Trust Limited
(2) Cheng-Pei Hsu (on his own behalf and on behalf of any unascertained or future issue)
(3) The adult issue of Cheng-Pei Hsu if any
(4) John-Ping Hsu
(5) Benjamin Jen-Bin Hsu
(6) Daniel Jen-Dee Hsu
(7) Ju-Tung Hsu (on his own behalf and on behalf of any unascertained or future issue)
(8) Jovan Gene Hsu
(9) Joey Concord Hsu
(11) Keng-Nan Hsu
(12) Christopher Jenwen Hsu
(13) Calvin Jennan Hsu
(14) Meghan Jenyi Hsu
(15) Jen-Jeih Hsu (known as Jerry Hsu)
(16) Tsi-Yun Hsu
Defendants

Advocate K. J. Lawrence for the Representor and Defendant.

Advocate F. B. Robertson for 6–11 Parties convened and 7–14 Defendants.

Parties convened 1–5 and 12–14 not present and not represented.

Defendants 1–6 and 15–16 not present and not represented.

Authorities

Trusts (Jersey) Law 1984, as amended.

Re Fountain Trust [2005] JLR 359.

The H Trust [2007] JRC 187.

IMK Family Trust [2008] JLR 250.

IMK Family Trust [2008] JLR 430.

Re B [2006] JRC 185.

Royal Court Rules 2004.

Deputy Bailiff

THE

1

This case has had a complicated procedural history, resulting in the matters before the Court which were heard on 25 th November.

2

These matters arise out of two sets of proceedings. The first set of proceedings is under Court File Ref: 2005/182, which are proceedings commenced by Barclays Private Bank and Trust Limited (the “Trustee”) as Trustee of the Tyzee Trust. I will refer to these as the “Trust Proceedings”. The second set of proceedings comes under File Ref: 2005/396, commenced by Nien-Hsi Hsu on his own behalf and in other capacities against the Trustee and Others, seeking various relief. I refer to these as the “OJ Proceedings”.

The Trust Proceedings
3

The Court was convened to determine a summons issued by Nien-Hsi Hsu, the 12 th party convened, seeking an Order pursuant to Article 51 of the Trusts (Jersey) Law 1984 (the “Trust Law”) without reconsideration of the merits:-

“(1) That the judgment of the Massachusetts Court dated 10th August, 2000, between Nai-Cheng Hu Hsu and Tsi-Yun Hsu, and judgments incidental thereto, should be recognised and/or enforced against the assets presently held in the Tyzee Trust and paid to Nien-His Hsu in his capacity as Executor of the estate of his mother Nai-Cheng Hu Hsu in the following sums:-

(a) pursuant to the judgment dated 10th August, 2000, the sum of US$1,000,000 (one million United States dollars); and

(b) interest at the higher of the Royal Court rate or applicable United States Court rate from 10th August, 2000, to date of payment;

(c) further or alternatively to (b), the sum of US10,000 per week pursuant to the judgement of the Massachusetts Court dated 8th November, 2000, from 10th August, 2000, to date of payment;

(2) That the Restraining Orders of the Massachusetts Court be recognised and given effect to, including but not limited to the Restraining Order dated 24th February, 2000, preventing the first, third, sixth and 10th parties convened from inter alia in any way disposing of any assets of and/or proceeds from the Tyzee Trust;

(3) That costs be paid either out of the assets of the Tyzee Trust and/or by such parties as the Court shall deem fit.”

4

This summons was issued on 22 nd February, 2008. For reasons which appear below in relation to the procedural steps taken, this summons has only just come on before the Court for hearing. The date was fixed originally for 19 th June, 2008, but subsequently by agreement between the parties the summons was adjourned on a number of occasions and finally fixed for hearing on 24 th and 25 th November, 2009. The application was that of the 12 th party convened (to whom I shall refer in this judgment, without intending any discourtesy by such brevity as “Nien”).

5

In the event, Nien did not appear before the Court for the hearing of the application which he had made. Not only has Nien not made any appearance in relation to the hearing of his application, but he has also not complied with the Order of the Royal Court of 8 th February, 2008, which gave all parties leave to file an affidavit by 21 st March, 2008, and directed Nien to file a skeleton argument by 18 th April, 2008. This Order was subsequently varied by consent by an Act of the Royal Court dated 29 th April, 2008, which gave the parties leave to file an affidavit by 28 th April, 2008, and Nien to file a skeleton argument by 15 th May, 2008. It was further varied, again by consent, on 6 th July, 2009, when the Court ordered Nien to file his affidavit by 31 st August, 2009, and his skeleton argument by 21 st September, 2009, and to lodge bundles by 19 th October, 2009.

6

Nien not having appeared and having failed to comply with any of the Court's procedural Orders to enable the Court to deal with the summons which he has issued, the Court in its discretion dismisses that summons as requested by the Trustee and by the beneficiaries for whom Advocate Robertson acts. The Court will make some further observations below in relation to the substance of the application as disclosed by Nien's summons, but it should be emphasised that the reason for the decision dismissing his summons lies in his failure to attend Court either personally or through counsel to explain why he sought the Orders he did. That failure is, of course, compounded by the Court's inability to follow any argument he might have wished to advance as a result of his failure to comply with the procedural directions which have been made with his consent.

Background
7

The Tyzee Trust (“the Trust”) was created by a Declaration of Trust dated 17 th May, 1991, made by the Trustee. The funds were apparently provided by Mr Tsi-Yun Hsu (“Mr Hsu”) and possibly two of his sons including Nien. Mr Hsu was petitioned for divorce by his wife on 14 th December, 1993. The parties were divorced pursuant to an Order made by the Massachusetts Probate and Family Court on 10 th August, 2000. In its judgment, which is the judgment Nien seeks to have enforced, the Court held that Mr Hsu had fraudulently transferred and concealed assets from his wife in particular by the creation of the Trust. That judgment contained the following Order:-

“The Court finds that the Husband fraudulently transferred marital funds into the Tyzee Trust and accordingly declares so much of the Trust void so as to allow the Husband to pay to the Wife US$1,000,000 within 30 days from the date of the judgment. The Husband shall take all necessary steps to effectuate the transfer. The Husband shall be solely responsible for paying any taxes associated with the withdrawal of US$1,000,000 so that the Wife receives the funds tax free.”

8

The Trustee exercised a Deed of Exclusion in December 1993. It is dated 6 th December, 1993, but was purportedly sealed on 30 th December, 1993. By this Deed of Exclusion, Mr Hsu and Nien were declared to be Excluded Persons under the Settlement. It follows that by the time the Massachusetts Court made its Order in August 2000, Mr Hsu was incapable of benefit from the Tyzee Trust; and his wife was not and has never been a beneficiary of the Trust.

9

The Court is advised that the Trustee was given little information about the progress of the divorce proceedings between Mr Hsu and his wife, save for some correspondence in 1999 regarding Mr Hsu's discovery obligations and in February 2000 regarding a possible basis for settlement of the matrimonial proceedings. At no stage was the Trustee convened before the Massachusetts Court, neither did it enter any appearance in those proceedings nor did it accept the jurisdiction of that Court.

10

Following her success, the wife evidently pressed her husband for payment of the award and subsequently took contempt proceedings against him in the United States for non-payment of the award. In a separate action she filed proceedings against her four sons who were and remain beneficiaries of the Trust, obtaining a temporary restraining Order in the United States in February 2000 preventing them from dealing with the assets of the Trust in any way. The wife engaged Jersey lawyers, to whom in May 2002, the Trustee gave an assurance through Messrs. Ogier & Le Masurier that the assets and the administration of the Trust would remain within the jurisdiction pending an application being made to the Royal Court. No distributions have been made out of the Trust since that date other than with the consent of the Royal Court as set out below.

11

It is unnecessary to describe the correspondence between the various lawyers through 2003 and 2004. It appears that the wife died on 15 th February, 2003, and her son Nien was appointed as Executor of her estate with grants of...

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