Jasmine Trustees Ltd v M

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Sir Michael Birt,Jurats Ramsden,Olsen
• Judgment Date: 05 October 2021
• Neutral Citation: [2021] JRC 248

[2021] JRC 248

ROYAL COURT

(Samedi)

Before:

Sir Michael Birt, Commissioner, and Jurats Ramsden and Olsen

In the Matter of the Piedmont Trust & Riviera Trust

Between

(1) Jasmine Trustees Limited

(2) Lutea Trustees Limited

Representors

and

(1) M

(2) N

(3) Q

(4) O, P, V, R, S, W

(5) U

(6) Advocate Damian James as Guardian ad Litem of X

(7) Advocate Simon Franckel as Representative of the unborn and remoter issue

(8) Rysaffe Fiduciaries S.à.r.l.

Respondents

Advocate N. M. Sanders for the Representors

Advocate F. B. Robertson for the First Respondent

Advocate J. P. Speck for the Second and Third Respondents

Advocate M. P. Renouf for the Fourth Respondents

The Fifth Respondent did not appear and was not represented.

Advocate D James in person.

Advocate S. A. Franckel in person.

Advocate R. S. Christie for the Eighth Respondent

Authorities

Re Piedmont Trust [2015] (2) JLR 52.

Representation of Jasmine Trustees Limited [2015] JRC 196.

Re Piedmont Trust [2018] (2) JLR 306

Representation of Jasmine Trustees re Piedmont and Riviera Trust [2018] JRC 210.

Re Onorati Settlement [2013] (2) JLR 324.

Pitt v Holt [2012] Ch 132.

Pitt v Holt [2013] 2 AC 108.

Kan v HSBC International Trustee Limited 2015 (1) JLR N 31

Rep of Otto Poon Trust [2015] JCA 109.

Hawksford Jersey Limited v A [2018] JRC 171.

Re Esteem Settlement [2003] JLR 188.

Investec Co-Trustees (Jersey) Limited v Kidd [2012] JRC 066.

Lewin on Trusts (20th Ed).

Re Rabaiotti 1989 Settlement [2000] JLR 173.

Re A and B Trusts [2012] (2) JLR 253.

GB Trustees Limited v Stock [2021] JRC 048.

Ogier Trustee (Jersey) Limited v CI Law Trustees Limited [2006] JRC 158.

Holden on Trust Protectors.

Trusts (Jersey) Law 1984.

Rawcliffe v Steele 1993–95 MLR 426.

S v L E & Bedell Cristin Trustees Limited [2005] JRC 109.

Re The X Trusts [2021] SC (Bva) 72 Civ.

Garnham v PC [2012] (1) JLR 204.

Children's Investment Fund Foundation (UK) v Attorney General [2020] 3 WLR 461.

Trust — application for the approval of the Court to appoint all the assets of the trusts amongst the beneficiaries in specified proportions

THE COMMISSIONER:

1 This is an application by the Representors as trustees of two trusts for the approval of the Court of their decision to appoint all the assets of the trusts amongst the beneficiaries in specified proportions. Although all the beneficiaries are agreed that the trusts should be terminated, there is disagreement as to how the trust funds should be allocated as between different beneficiaries.

2 Among other matters, the application has required the Court to consider whether the Representors are disqualified from making their decision because of a conflict of interest and should therefore surrender their discretion to the Court; the role of a protector in circumstances such as these; and the significance of the letters of wishes.

3 Following the adjourned hearing on 22 July, the Court announced its decision on 26 July to the effect that the Representors did not have to surrender their discretion to the Court and that the Representors' decision was approved. What follows constitutes our reasons for reaching that conclusion.

Factual background

4 There have been previous proceedings in relation to the two trusts, two of which are reported, namely Re Piedmont Trust, [2015] (2) JLR 52, [2015] JRC 196 (“the 2015 judgment”) and Re Piedmont Trust [2018] (2) JLR 306, [2018] JRC 210 (“the 2018 judgment”). Full details of the factual background are to be found in those judgments to which recourse may be had as necessary. For present purposes, we would summarise the factual background as follows.

5 Jasmine Trustees Limited (“Jasmine”) is the sole trustee of the Piedmont Trust (“the P Trust”). Jasmine and Lutea Trustees Limited (“Lutea”) are the co-trustees of the Riviera Trust (“the R Trust”) (together “the Trusts”). Unless it is necessary to do otherwise in a specific context, we propose to refer simply to “the Trustees” to cover the trustee(s) of both Trusts or whichever Trust is relevant in context.

(i) The P Trust

6 The P Trust was established by a relative of the beneficiaries of the Trust (“the P settlor”) by deed dated 4 April 2000. Since 11 ^th February 2011, Jersey law has been the proper law of the Trust.

7 The Trust is a discretionary trust which is revocable by the P settlor. It appears to have been established at the instigation of the father (“the father”) of the First, Second and Third Respondents. The father died in April 2020. He had three children, namely the First Respondent (“the daughter”), the Second Respondent (“the elder son”) and the Third Respondent (“the younger son”) (together “the sons”). Each of the sons has three adult children and together they comprise the Fourth Respondents (“the Adult Grandchildren”). The sons and the Adult Grandchildren are resident in the US. The daughter has one child (“the daughter's child”), who is a minor aged 6, and Advocate James has been appointed as her guardian ad litem. The daughter and the daughter's child reside in the UK.

8 The class of beneficiaries was defined in the trust deed as being the father, the father's children and remoter issue, and any persons added as beneficiaries under the power conferred by the trust deed. The father was named as the original protector.

9 Shortly before the hearing, the assets of the P Trust were valued at some US$34.8m. This included a loan to the daughter of some US$1.35m (including interest) and a loan to the father of some US$1.1m, with the balance being made up of an investment portfolio.

(ii) The R Trust

10 The R Trust was established on 18 ^th June 2010 by deed between a different family relative (“the R settlor”) and Jasmine and Lutea as trustees. It is governed by the law of Jersey and is also a revocable discretionary trust. The class of beneficiaries is the same as the P Trust with the addition of the R settlor and the Fifth Respondent, who is a long-standing companion of the father. The father was named as the original protector.

11 Approximately 48% of the R Trust was contributed by the R settlor. The balance of approximately 52% was received by way of appointment in 2010 out of a further trust known as the S Trust. This had been established by the S settlor (another relative of the beneficiaries) in 2000 at the same time as the P Trust had been created. The S Trust too was a revocable discretionary trust and was in similar terms to the P Trust with similar beneficiaries.

12 Shortly before the hearing, the assets of the R Trust were valued at approximately US$7m.

(iii) Letters of Wishes

13 In relation to the P Trust, there have been three letters of wishes signed by the P settlor. In broad summary (so far as relevant) they provide as follows:

• (i) The first (LOW 1) is dated 4 ^th April 2000, i.e. the date of creation of the P Trust. In LOW 1 the P settlor states that the intention of the Trust is to provide for the great grandchildren of the father's parents. He expresses the wish that distributions should only be made during the father's lifetime at the father's request. He further expresses the wish that upon the father's death, the trust fund should be divided into three equal parts, one in respect of each of the father's children. As to the one-third part attributable to each son, he expresses the wish that that part should be distributed equally among that son's children in stages upon such children attaining specified ages, with the balance of each such child's share being distributed upon the child attaining the age of forty. The daughter had no children at the time. The letter provides that, if she should have children before 3 September 2004 (when she would be 40), the one-third share should be held for the daughter's children on broadly the same (but not identical) terms as the children of the sons. The letter further expresses the wish that if the daughter should not have children before 3 September 2004, the one-third share should be distributed to the daughter at specified ages. The letter further expresses the wish that each child of the father should be appointed as protector of the one-third share intended for that child's family.

• (ii) The second letter of wishes (LOW 2) is dated 14 ^th February 2006 and expressly cancels LOW 1. The P settlor again states that the intention of the P Trust is to provide for the great-grandchildren of the father's parents. Although not in identical language, it expresses broadly similar wishes as LOW 1. Thus, the letter requests the trustees to consider sympathetically any requests made by the father for distributions to him or other beneficiaries during his life. Following his death, the P settlor wishes the trust fund still to be divided into three equal parts, one part to be attributable to each of the father's three children, i.e. the two sons and the daughter. He wishes the elder son to be appointed protector of his family's one-third, with similar wishes in respect of the younger son and the daughter for the other thirds. The share attributable to each son is again to be held equally for the children of the relevant son with distributions at various ages including the balance at the age of forty. At this stage the daughter still had no children. The letter requests that should she have children, the one third share attributable to her should be held for her children in terms similar to those in respect of the children of the sons. There is no longer any reference to the date of 3 September 2004. The letter again expresses the wish that if the daughter should not have children, the one-third share should be distributed to her at various ages.

• (iii) The third letter of wishes (LOW 3) is dated 7 ^th July 2010. By then, as discussed later, the father and the daughter had fallen out. This letter expresses the wish that upon the death of the father, the trust fund should be divided...