Caversham Trustees Ltd v Patel and Six Others

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: (Le Cras, Commr.)
• Judgment Date: 21 March 2007
• Date: 21 March 2007

ROYAL COURT

(Le Cras, Commr.)

Truststerminationtermination at beneficiaries' request

The respondents, the beneficiaries of certain trusts, had requested that the representor (the trustee) terminate the trusts and distribute the assets. Although willing to do so, the trustee considered that the assets and liabilities of the trusts were not fully ascertained and sought the directions of the court. The beneficiaries submitted that the trustee should have terminated the trusts and distributed the property under art. 43(3) of the Trusts (Jersey) Law 1984.

The respondents questioned the trustee's claim to fees and costs and, in the absence of agreement, the issue was referred to arbitration. The arbitrator awarded the trustee approximately two-thirds of its costs and fees but the beneficiaries applied to the court for the award to be reduced, submitting that the trustee should only have been allowed one-third of the sum claimed. The trustee had provided the beneficiaries with statements and explanations of its costs and fees at an early stage in the negotiations but it did not initially agree to their offer of arbitration, as they had not specified what fees they disputed or why. The beneficiaries submitted in reply that they did not have to specify why they requested an account and had an absolute right to demand it. The arbitrator considered the lack of certainty as to the trust assets to be a sufficient reason for the trustee's refusal to terminate the trusts and distribute the assets at the beneficiaries' request under art. 43(3).

Held: (1) As there was uncertainty concerning the assets of the trusts, an application by the trustee to the court had been inevitable and it could not be said that the trustee should have terminated the trusts and distributed the assets under art. 43(3) of the 1984 Law merely because the beneficiaries requested it. Furthermore, as the trustee had...