Nautilus Trustee Ltd v Zedra Trustees (Jersey) Ltd

CourtRoyal Court
JudgeMatthew John Thompson
Judgment Date01 December 2016
Neutral Citation[2016] JRC 223
Date01 December 2016

[2016] JRC 223




Advocate Matthew John Thompson, Master of the Royal Court.

Nautilus Trustee Limited
Zedra Trustees (Jersey) Limited

Advocate P. C. Sinel for the Plaintiff.

Advocate J. P. Speck for the Defendant.


Fox v Wood (Harrow) Ltd [1963] 2 QB 601 .

El-Ajou v Dollar Land Holdings plc & Anor [1994] B.C.C. 143 .

Armitage v Nurse [1998] Ch 241 .

Three Rivers DC v Bank of England (No.3) [2003] 2 AC 1 .

Nolan v Minerva [2014] 2 JLR 117 .

In the matter of II [2016] JRC 116 .

Iiyama (UK) Ltd v Samsung Electronics Co Ltd [2016] EWHC 1980 (Ch) .

Meridian Global Funds Management Agent Limited v Securities Commission [1995] 2 A.C. 500 .

AIB Group (UK) Plc v Redler & Co Solicitors [2015] A.C. 1503 .

Re Esteem Settlement [2000] JLR Note 41a .

Re Esteem Settlement 2000/150 .

Graiseley Properties Limited & Ors v Barclays Bank Plc [2012] EWHC 3093 .

Graiseley Properties Limited & Ors v Barclays Bank Plc [2013] EWHC 67 .

Home Farm Developments v Le Sueur [2015] JCA 242 .

Farah v British Airways and Ors CCRTI 1999/0917/BI .

Barrett v Enfield [2001] 2 AC 500 .

Makarenko v CIS Emerging Growth Ltd [2001] JLR 348 .

Royal Court Rules 2004, as amended.

Re Esteem [2003] JLR 188 .

Hitch v Stone [2001] STC 214 .

Trusts (Jersey) Law 1984, as amended.

Graiseley Properties Limited v Barclays Bank Plc [2013] EWCA Civ 1372 .

Trust — application by the defendant to strike out plaintiff's order of justice.










The parties



The proceedings



The defendant's contentions



The plaintiff's contentions





Applicable legal principles


The function of pleadings


The order of justice







The way forward



This judgment represents my decision in respect of an application by the defendant to strike out certain paragraphs of the plaintiff's order of justice.


In summary the allegations the defendant seeks to strike out concern the alleged manipulation of the London Interbank Offer Rate (“LIBOR”) and manipulation of foreign exchange markets by Barclays Bank Plc. These allegations are based on notices issued respectively by the Financial Services Authority (‘FSA’) in respect of LIBOR in 2012 and by the Financial Conduct Authority (‘FCA’) in respect of foreign exchange in 2015. It is the parts of the order of justice that contain these allegations that the defendant seeks to strike out.

The parties

The plaintiff is the present trustee of a trust established by Mr Richard Grenville Russell Evans (“Mr Evans”) on 10 th August, 1982, (‘the Trust’). The defendant, then known as Walbrook Trustees (Jersey) Limited (“Walbrook”), was appointed trustee of the Trust. In May 2007 Walbrook was acquired by the Barclays Group at which point it was renamed Barclays Wealth Trustees (Jersey) Limited and was wholly owned by Barclays Bank Plc through a series of intermediary holding companies which it is not necessary to describe for the purposes of this judgment.


In January 2016, Barclays Wealth Trustees (Jersey) Limited was acquired by an independent investment group with the result that Barclays Wealth (Trustees) Limited changed its name to Zedra Trustees (Jersey) Limited the present name of the defendant. The defendant therefore no longer forms part of Barclays Bank Plc or the Barclays Group.


While the name of the defendant was formerly known as Barclays Wealth Trustees (Jersey) Limited, there is also an issue between the plaintiff and the defendant as to what role was played by Barclays Bank Plc in relation to investments made by the Trust. I address later in this decision the rival contentions of the parties. It is right to record however that both the plaintiff and the defendant in their written and oral submissions referred to “Barclays Wealth” as a division or trade name of Barclays Bank Plc. For the purposes of this judgment I have adopted this terminology. Any reference to Barclays Wealth is not therefore a reference to the defendant or Barclays Wealth Trustees (Jersey) Limited, but to the private banking division of Barclays Bank Plc.

The proceedings

The present claim was commenced by an order of justice served on the 1 st July, 2016, alleging breach of trust in relation to certain investments made by the defendant as trustee.


The allegations of breach of trust include a failure to act in the best interest of the beneficiaries, a failure to preserve or enhance the value of trust property, a conflict of interest by permitting a conflict between the obligation to act in the best interest of the Trust and the defendant's interest in generating revenue for the benefit of the Barclays Group, making a secret profit for the benefit of the Barclays Group, a failure to keep accurate accounts or records, and a failure to provide complete records to the incoming trustee. It is also alleged that the breaches of trust amounted to gross negligence, wilful default, or wilful wrongdoing by the defendant.


The principal investment complained of concerns three structured loan notes purchased on or around 14 th May, 2008. The notes related to the performance of certain well known banks. The particular loan notes in which the dispute is concerned carried designations SN281-08, SN282-08 and SN289-08 for £2,000,000, £3,000,000 and £2,000,000 respectively. I will refer to these notes in this judgment as the bank notes.


In relation to issues of LIBOR manipulation, the order of justice contains the following references in addition to the paragraphs the defendant seeks to strike out:-

“57.3 By 4 September 2007 LIBOR had reached 6.7975%, in excess of the Bank of England's emergency lending threshold of 6.75%, suggesting that UK banks were reluctant to lend to each other.

57.10 On 16 April 2008 the Wall Street Journal published a report questioning the integrity of LIBOR, entitled “Bankers Cast Doubt on Key Rate Amid Crisis”. The article began “LONDON – One of the most important barometers of the world's financial health could be sending false signals.”


The losses claimed for the bank notes are said to be in the region of £6,000,000.


Losses are also claimed in respect of investments in other structured loan notes numbered SN006-08, SN015-08, SN-292-08 and SN446-08 resulting in a claim of £2,118,385.


Losses are also claimed in respect of investments in certain commodities in particular metals in the sum of £507,096 and losses in two portfolios known as the Asia ex Japan of £198,000 and the Global Equity Trading Portfolio of £334,968.


The plaintiff further claims equitable compensation to reflect the earnings that should have been generated by prudent investment of the Trust's assets in accordance with the defendant's duties as trustee (see paragraph 105 of the order of justice) and an account of any secret profit made.


The allegations the defendant seeks to strike out relate to paragraphs 65.0 to 75.0, 78.2 and 78.3 of the order of justice, paragraphs 93.0 to 102.0 and the reference to paragraphs 93.0 to 102 in paragraph 103.0. These paragraphs state as follows:

“65.0 Between January 2005 and July 2009, Barclays Bank wrongfully and / or dishonestly sought to and did in fact influence and / or manipulate the level at which the London Interbank Offer Rate (“LIBOR”) was set from time to time.

66.0 In a Final Notice issued pursuant to section 206 of the Financial Services and Markets Act 2000 on 27 June 2012, the United Kingdom Financial Services Authority (“FSA”) found that Barclays Bank had wrongfully sought to manipulate LIBOR to its own financial advantage (“the LIBOR Final Notice”).

67.0 The Plaintiff adopts the definitions of “Submitters” and “Derivatives Traders” provided by the FSA in the LIBOR Final Notice. References to Submitters or Derivatives Traders are to employees, servants or agents of Barclays Bank who occupy the positions as defined by the LIBOR Final Notice. The FSA made the following findings:

67.1 “On numerous occasions between January 2005 and June 2009, Barclays' Derivatives Traders made requests to its Submitters for submissions based on their trading positions. These included requests made on behalf of derivatives traders at other banks. The Derivatives Traders were motivated by profit and sought to benefit Barclays' trading positions. The aim of these requests was to influence the final benchmark LIBOR and EURIBOR rates published by the BBA and EBF.”

67.2 “Requests to Barclays' Submitters were made verbally and a large amount of email and instant message evidence consisting of Derivatives Traders' requests also exists. At times, requests made by email alone were sent by the Derivatives Traders nearly every day.”

67.3 “The number of requests and the period of time over which they were made indicate that the Derivatives Traders made requests on a routine basis. Specific emails also indicate the requests were made regularly.”

67.4 “The routine nature of the requests demonstrates that the Derivatives Traders considered Barclays took their requests into account when determining its submissions.”

67.5 “Evidence from certain Submitters confirms that Barclays took the Derivatives Traders' requests into account when determining its submissions.”

68.0 Between January 2005 and June 2009 Derivatives Traders wrongfully and / or dishonestly sought to influence the submissions presented by Submitters and thereby to influence and / or manipulate LIBOR for the financial benefit of Barclays Bank.

69.0 The aforementioned criminal fraud of Barclays Bank was...

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1 cases
  • Stewart Newton v Professor Howard Morris
    • Jersey
    • Royal Court
    • 19 September 2018
    ...Limited [2016] JRC 004. Home Farm Developments v Le Sueur [2015] JCA 242. Nautilus Trustee Limited v Zedra Trustees (Jersey) Limited [2016] JRC 223. Property — reasons for refusing the defendants' strike out application. CONTENTS Paras 1. Introduction 1 2. Background 2–9 3. The defendants' ......

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