Mubarak v Mubarik

JurisdictionJersey
CourtCourt of Appeal
JudgeMcNeill JA,Beloff JA,Montgomery JA
Judgment Date19 November 2008
Neutral Citation[2008] JCA 196
Date19 November 2008

[2008] JCA 196

COURT OF APPEAL

Before:

The Hon. Michael Beloff, Q.C., President;

J. W. McNeill, Esq., Q.C., and;

Miss C. Montgomery, Q.C..

Between
Aaliya Mubarak
Representor/ First Respondent
and
Iqbal Mubarik
First Respondent/Appellant
The Craven Trust Company Limited
Second Respondent
Salem Mubarak and Noor Mubarak
Third Respondent
Advocate M. P. Renouf (as guardian ad litem of the minor beneficiairies Osman Mubarak and Hamza Mubarak and representative of the unborn or unascertained beneficiaries)
Fourth Respondent

Advocate A. P. Begg for the Appellant.

Advocate C. G. P. Lakeman for the First Respondent.

Advocate J. M. P. Gleeson for the Second Respondent.

Advocate M. P. Renouf in person.

Authorities

Trusts (Jersey) Law 1984.

Matrimonial Causes Act 1973.

In Re Fountain Trust [2005] JLR 359 .

In re B Trust [2006] JLR 562 .

In re H Trust [2007] JRC 187 .

Thoday v. Thoday [1964] P. 181, 198 .

AG v Barker [2000] 1 FLR 759 .

Saunders v Vautier (1841) 4 Beav. 115 .

In re Christie-Miller's Marriage Settlement [1961] 1 WLR 462 .

In Re Courtauld's Settlement [1965] 1 WLR 1385 .

Colville, Petitioner 1962 SLT 45 .

Law and Others, Petitioners , 1962 SLT 377.

Lewin on Trusts (18th Edn).

Changing the Terms of Trusts, Emily Campbell.

In re Gulbenkian's Settlement [1970] AC 508 .

Re Ball's Settlement Trusts [1968] 1 WLR 899 .

Re T's Settlement Trust [1964] 1 Ch. 158 .

IRC v. Holmden [1968] AC 685 .

In Re Osias Settlements [1987-88] JLR 389 .

Trusts (Scotland) Act 1961.

In re Steed's Will Trusts [1960] 1 All ER at 492 .

In re Seale's Marriage Settlement [1961] Ch 574 .

In re Holt's Settlement [1969] 1 Ch 100 .

In Re N [1999] JLR 86 .

In Re Sangle-Ferriere Children's Settlement [2007] JLR N 8 .

In Re Douglas [2000] JLR 73 .

In Re T's Settlement [2002] JLR 204 .

In Re Druce's Settlement [1962] 1 WLR 363 .

Court of Appeal (Jersey) Law 1961.

Court of Appeal (Civil) Rules 1964.

Schmidt v Rosewood Trust Ltd [2003] 2 AC 709 .

Mourant & Co. Trustees Limited v. Magnus [2004] JRC 056 .

Phillips and others, Petitioners 1964 SC 141, 148 .

In Re Tinkers Settlement [1960] 1 WLR 1011 .

Matrimonial Causes Act 1973.

Appeal by the First Respondent/Appellant heard on 24th September, 2008, against orders of the Royal Court dated 15th and 17th April, 2008.

McNeill JA
1

Throughout this judgment Aaliya Mubarak will be referred to as the First Respondent and Iqbal Mubarik will be referred to as the Appellant.

2

The scheme of this judgment is as follows:-

Paras.

Introduction

2 - 6

Factual background

7 - 13

The Divorce proceedings

14 - 16

Issue I: whether the Appeals are an abuse of process

17 - 18

General considerations

19 - 21

The salient circumstances

22 - 29

Discussion

30 - 39

Issue II: the Second Appeal

40

The 1984 Law, Articles 47 and 51

41

The Trust Provisions

42

The Order below

43

The position of the parties below

44 - 47

The Decision below

48 - 52

The former trustee's submissions on Appeal

53 - 56

The Appellant's submissions on Appeal

57 - 62

Submissions on the general ambit of the use of Article 47

63 - 65

Discussion on the general ambit of the use of Article 47

66 - 84

The status of the First Respondent an Excluded Person

85 - 87

Approval on behalf of unascertained beneficiaries: below

88 - 96

Approval on behalf of unascertained beneficiaries: Clauses 8 and 9?

97 - 103

Approval on behalf of unascertained beneficiaries: an unreleased power?

104 - 115

The Appellant's letter of 25 August 2006

116 - 124

Unborn Beneficiaries

125 - 127

Removal of trustee

128

Appointment of Receivers and Ancillary Orders

129 - 130

Conclusion

131

Respondent's Notice

132 - 133

Conduct of Litigation

134 - 137

Determination

138

Introduction
3

There are two Appeals and a Respondent's Notice before this court. The proceedings in the Royal Court (Samedi Division) below arose as a by-product much litigation following the divorce in England of the Appellant and First Respondent. They concern a Jersey Trust.

4

The First Notice of Appeal was withdrawn during the hearing before this court. It sought to appeal decisions made during a hearing before the Royal Court which was held on 14 to 17 April 2008, the salient parts of which, for the purposes of that Appeal, took place on 15 April 2008. The reasoning behind those decisions was issued by the Deputy Bailiff on 15 August 2008, at the same time as the judgment on the substantive issues. In that Notice the Appellant had sought, principally, declarations as to how the hearing should have been conducted. It was pointed out to the Appellant's Advocate that courts did not, in practice, give advice on academic questions and Advocate Begg for the Appellant agreed that answering the issues in the first Appeal would have no practical consequences and withdrew that Appeal. However, in so doing, Advocate Begg asked us to note, however, that his client's position was that non-attendance by Advocate Begg at the hearing from and after 15 April was as a result of those decisions.

5

The Second Notice of Appeal presents appeals in respect of substantive Orders made by the Royal Court on 17 April 2008, and on which judgment was issued by the Deputy Bailiff on 15 August 2008. By that Notice, the Appellant seeks, among other matters the dismissal of certain orders whereby the Court (a) approved, under Article 47 (1) of the Trusts (Jersey) Law 1984 ("the 1984 Law"), an arrangement varying a Jersey trust, (b) appointed receivers for the trust and (c) made certain ancillary orders.

6

The Respondent's Notice seeks to reargue an alternative line of argument rejected by the court below. The First Respondent also raised, by a separate Summons before us, an issue as to whether the Appellant should be barred from bringing his appeals by reason of lack of locus standi, estoppel or abuse of process.

Factual background
7

The hearing which took place in April 2008 was in respect of a Jersey trust known as the IMK Family Trust ("the Trust"). It proceeded upon a Representation by the First Respondent for an order enforcing or giving effect to an order made on 30 March 2007 in the Family Division of the High Court in England by Holman J. By that order, made pursuant to Section 24(1)(c) of the Matrimonial Causes Act 1973 ("the 1973 Act"), the High Court sought to vary the Trust so as to require the trustees to pay to the First Respondent all sums owing to her under an order made in the Family Division on 10 December 1999 by Bodey J., the total amount being £4,875,000 as at 1999.

8

The Appellant and First Respondent had been husband and wife, having married in 1983. Over the ensuing years, the Appellant's business interests expanded and in 1994 he caused a holding company, Twenty First Century Holdings Limited ("TFCH") to be incorporated in Bermuda; TFCH owning, directly or indirectly, shares in relevant subsidiary companies.

9

The Third Respondents are the adult children of the marriage. They did not appear in this court or at the proceedings below in the Royal Court, but wrote stating that they supported the First Respondent's application. The Fourth Respondent is the guardian ad litem for the minor children of the marriage, and they, together with the unborn and unascertained beneficiaries, were represented by him at the Hearings below and before this court. The Second Respondent was the Trustee of the Trust until the orders of April 2008 and was represented below and before us; on both occasions taking a neutral stance but seeking to assist the Court.

10

In 1997 the family moved to live in London and at that time there was a corporate re-organisation in relation to TFCH. As part of that reorganisation it was agreed that TFCH would repurchase most of the shares which had been issued to the Appellant and to the First Respondent. It did so, but the purchase price remains unpaid.

11

The Trust was created in 1997. The Deed of Trust is dated 2 September 1997 (hereinafter "the Trust Deed") The settlors were the Appellant and the First Respondent. It is a discretionary trust governed by the law of Jersey. The principal beneficiaries are described as the settlors, their children Salem, Noor and Osman together with any other children or remoter issue of the settlors born thereafter. The Appellant has power to add and exclude beneficiaries, to appoint and remove the Protector and to appoint new or additional trustees. The Protector is the Appellant's father and he has the power to remove a trustee.

12

On the same day as the trust was constituted, the Appellant and the First Respondent transferred the residue of their shareholdings in TFCH to the trustee to hold under the terms of the Trust. They did not transfer to the trust the debts owed to them by TFCH resulting from of the unpaid purchase price. In consequence the value of TFCH as at September 1997 was retained by the Appellant (and, to a limited extent, by the First Respondent). Accordingly, only the benefit of any subsequent increase in value would accrue for the benefit of the trust.

13

The parties ceased cohabitation in March 1998 and at about the same time the Appellant revocably excluded the First Respondent as a beneficiary under the trust. There were two letters of wishes in relation to the trust. One letter of wishes was dated 2 September 1997 and signed by both the Appellant and the First Respondent. A Second letter of wishes was signed by the Appellant on 8 July 1998 and was described as clarification of the earlier letter. In that same month the First Respondent had instituted divorce proceedings in England.

The Divorce Proceedings
14

Divorce Proceedings were commenced in July 1998 and decree...

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