R v Abacus (CI) Ltd ex parte Viscount Wimborne

JurisdictionJersey
CourtRoyal Court
Judge(Crill, Deputy Bailiff):
Judgment Date19 May 1983
Date19 May 1983
ROYAL COURT
(Crill, Deputy Bailiff):

B.G. Pearmain for the applicant;

J.A. Clyde-Smith for the Hon. Ivor Mervyn Vigors Guest and other beneficiaries;

T.C. Sowden for Abacus (C.I.) Ltd.

Trusts—creation—intention of donor—intention to be found from terms of trust itself, general intention prevailing over grammatical sense, provisions interpreted in context of document as a whole

Trusts—creation—law applicable—English cases may be used for guidance if no specific Jersey authority

Trusts—creation—validity in Jersey—nothing in Jersey law to prohibit declarations of trusts of property—intention of donor to be found from terms of purported trust itself, applying usual canons of interpretation—court may look at English cases for guidance

Trusts—discretionary trust—beneficial interest—beneficiary has no fixed interest in income or capital of trust fund until trustees have exercised their discretionary powers

Trusts—donor's residuary rights—"donner et retenir ne vaut"—maxim may apply to trust of personalty in Jersey if interpretation of trust deed permits—not infringed by discretionary trust giving powers to trustee exercisable without consent of donor

Courts—Royal Court—jurisdiction—general equitable jurisdiction—general equitable jurisdiction to provide remedy for wrong done or threatened corresponds more closely to French "equité" than to English equity

CRILL, DEPUTY BAILIFF: There are before me in this case two documents. One is a Representation by Viscount Wimborne and the other is a Declaration of Trust of the 27th December, 1978, by Abacus (C.I.) Limited which settled a trust fund upon certain beneficiaries including Viscount Wimborne, and was made with his authority. Paragraph 9 of the Representation is as follows:—

"9. That since the execution of the Declaration of Trust (which was prepared by a legal adviser who no longer acts for the Applicant) a question of doubt has arisen as to the true construction of the Declaration of Trust.

The question is whether the Applicant is entitled as of right to the income of the trust fund as it arises, unless and until the trustee exercises some discretion so as to curtail the Applicant's right to future income; or whether any of the provisions of the Declaration of Trust (and in particular, Clause 3(i) of the Declaration of Trust) gives the trustee the right to withhold current income of the trust fund from the Applicant."

The applicant claims that he has what is termed in the Finance Act 1975 an "interest in possession" in the trust fund. If he does not, then, I was told, certain provisions of that Act may bite through Capital Transfer Tax. Let me say at once that the Court is concerned only with the proper construction of the trust deed according to the law of Jersey and not with any problems with the United Kingdom Tax Authorities that may ensue from a particular interpretation.

Mr. Pearmain, who appeared for the applicant, gave a most helpful resume of the background. He accepted, quite properly, that the Court was not being asked either to interpret the relevant sections of the Finance Act 1975, still less to apply it. Mr. Clyde-Smith, who appeared for the applicant's son and the other potential beneficiaries, agreed that paragraph 9 of the Representation contained the question that had to be answered by the Court. Advocate T.C. Sowden, who appeared for Abacus (C.I.) Limited, having satisfied himself that all the proper parties were represented, was content to abide by the decision of the Court.

In the course of the main arguments, apart from one citation from Pothier, I was referred exclusively to English cases as if this application were being heard in the Chancery Division of the High Court. I do not object to that but a word of caution is necessary. That the Royal Court is a Court of equity in the widest sense is clear; see, for example, Felard Invs. v. Trustees of the Church of Our Lady Queen of the Universe, 1979 J.J. 19, at pages 18 and 23; the reply of Mr. (as he was then) Jean Hammond, the Bailiff, to the Commissioners of 1861 at Answer 103; and the opinion of the then President of the Jersey Law Society in Re Windeatt's Wills Trust ([1969] 2 All E.R. 324). See also Latter v. Doyen de L'Isle de Jersey ((1948), 50 H. 305, 311 (N.S.); 1941-50 T.D. 51, unreported). But that does not mean that the Royal Court has any wider powers than the former Chancellors of the Court of Chancery. Their position is referred to in paragraph 1204 of Volume 16 of Halsbury's Laws of England (Fourth Edition) as follows:

"1204. Relationship of equity to common law. Early authorities refer to 'conscience', 'reason' and 'good faith' as the principles which guided the Court of Chancery, and the term 'equity' implies a system of law which is more consonant than the ordinary law with opinions current for the time being as to a just regulation of the mutual rights and duties of men living in a civilised society. Yet there was never a time in the history of the Court when the Chancellor was at liberty to follow generally either his own, or professional or common opinions as to what was right and convenient. Law and administration of law are, in all systems, intended as a means of attaining justice, but the means are imperfect. The special imperfections of mediaeval common law were, as to the law itself, that its rules were too strict, and that it did not cover the whole field of obligations; as to its administration, that it had no effectual means of extracting truth from the parties, that its judgments were not capable of being adapted to meet special circumstances, and that they were often unenforceable through the opposition of the defendant, or were turned into means of oppression. Insofar as it remedied these defects, the Court of Chancery afforded an improved system of attaining justice, but this was the extent of the difference between law and equity. Each had the same object; each attained it only imperfectly—equity somewhat less imperfectly than law. Both, moreover, were developed in the same way, by decisions given in accordance with precedents and subject to professional criticism. From the beginning the Court of Chancery acted on the maxim that equity follows the law, and, in cases where the legal analogy clearly applied, the rule of law was adopted, however harsh it might be".

Moreover, the conditions in the English Courts which gave rise to the system of law known as equity were not mirrored in the history of the Royal Court. It may well be that "equity" in Jersey inclines more to the French "equité" than its English counterpart. I have not been able to find the word "equité" in the Ancienne Coutume de Normandie, or in the Commentators, but I note that in the Dictionnaire de Droit et de Pratique (of France it is true and not only of Normandy) by De Férrière, published in 1771, there appears the following under the title of Equité:—

"EQUITÉ, est un juste tempérament de la Loi, que en adoucit la rigeur, en considération de quelques circonstances particulières du fait.

Ainsi cette équité est un juste retour au droit naturel, en retranchant les fausses & rigoureuses conséquences qu'on veut tirer de la disposition de quelque Loi, par une trop regoureuse explication des termes dans...

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