Re H Trust

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Birt, Deputy Bailiff and Jurats Tibbo and Le Cornu
• Judgment Date: 12 April 2006
• Date: 12 April 2006

ROYAL COURT

Birt, Deputy Bailiff and Jurats Tibbo and Le Cornu

G. Robinson for the representor;

J. Michel for the second respondent;

The first, third, fourth, fifth and sixth respondents were not represented;

The seventh respondent appeared in person.

Trustspowers and duties of trusteessubmission to foreign courtnot generally in interests of all beneficiaries for trustee to submit to foreign court in matrimonial proceedings of beneficiariesif does so, order of foreign court automatically enforceable without consideration by Jersey courtif does not, foreign order not binding in Jersey but not ignored by Jersey court considering interests of beneficiariescomity and interests of beneficiaries may often require court to give effect to it

A trustee applied for directions concerning matrimonial proceedings in England between two of the beneficiaries of a Jersey trust.

The first respondent (the husband) and the second respondent (the wife) were beneficiaries of a trust governed by Jersey law. The trust held their matrimonial assets, worth approximately 2.6m., which had been used solely for their benefit. The other beneficiaries were the husband's children, their spouses and his grandchildren. The wife instituted divorce proceedings in the Family Division of the English High Court in 2005, having been married to the husband since 1983. The trustee decided not to submit to the jurisdiction of the English court in those proceedings. It did, however, provide the wife with financial information concerning the trust.

The trustee also refused to agree to provide the funds to implement a settlement proposed by the husband, which the wife did not in fact accept, on the grounds that it did not take account of the limited trust funds nor the interests of the other beneficiaries.

The trustee sought the court's approval, inter alia, of its decision not to submit to the jurisdiction of the English High Court.

Held, approving the trustee's decision not to submit to the jurisdiction of the English court:

(1) The court approved the trustee's decision not to submit to the jurisdiction of the English High Court. It would not generally be in the interests of the beneficiaries of a Jersey trust for the trustee to submit to the jurisdiction of a foreign court in matrimonial proceedings in which one or both spouses were beneficiaries under the trust. If it were to do so, a variation of the trust ordered by the foreign court, which might not be in the interests of the beneficiaries, would be enforceable in Jersey without being reconsidered by this court. In making that order, the foreign court would have been concerned primarily with a fair division of the matrimonial assets and not with the interests of the beneficiaries of the trust. On the other hand, if the trustee were not to submit to the jurisdiction, any order made would not be enforceable and, on a subsequent application to the supervisory jurisdiction of this court to give effect to the variation ordered, the court would therefore have discretion to act in the best interests of the beneficiaries. The foreign court's order would not, however, be ignored as it would have been intended to effect a fair outcome between the spouses after full investigation. It would often be in the interests of comity and the beneficiaries for this court to make an order which would achieve the variation of a trust ordered by a foreign court. In certain circumstances, it might be desirable for a trustee to appear in foreign matrimonial proceedings, e.g. if the trust assets were located in that jurisdiction so that any variation could be enforced there (paras. 12-16).

(2) Even...