Representation of BNP Paribas

JurisdictionJersey
CourtRoyal Court
JudgeDeputy Bailiff
Judgment Date04 November 2010
Neutral Citation[2010] JRC 199
Date04 November 2010

[2010] JRC 199

ROYAL COURT

(Samedi Division)

Before:

W. J. Bailhache, Q.C., Deputy Bailiff, and Jurats de Veulle and Tibbo

In the Matter of the Representation of BNP Paribas Jersey Trust Corporation Limited and in the Matter of the PW Trust and
In the Matter of Article 51 of the Trust (Jersey) Law 1984.

Advocate J. P. Speck for the Representor.

Advocate N. M. Sanders for the Sixth Respondent

Authorities

Barclays Private Bank and Trust Limited v Hsu and Others [2010] JRC 003A.

Guardian Trust and Executors Company of New Zealand Limited v Public Trustee of New Zealand [1942] AC 115 at 127.

Sinel Trust Limited and Others v Rothfield Investments Limited and Others [2003] JCA 048.

Deputy Bailiff

THE

1

A hearing took place in private on 28 th September, 2010, of the representation of the Representor, which first came before the Court on 12 th March, 2010. Although the representation was heard in private, as is customary with Article 51 proceedings, this judgment is given in public.

2

When the matter first came before the Court in March, it was ordered that the representation be served on the Settlor, who is the widow of PW, (“the deceased”), and her four daughters and two sons, children of her union with the deceased. They were to be convened for a hearing before the Court on 14 th June, 2010. At that time, only the Sixth Respondent appeared, and indeed he now appears again through his counsel. The Court is informed that the position adopted by the Sixth Respondent is in fact supported by the First to Fifth Respondents, his mother and four sisters, although they have not formally entered any appearance. His position is essentially not in accord with the approach taken by the Seventh Respondent, his elder brother, who had written two detailed letters to the Court, albeit he has not appeared either personally or through counsel. The first of these letters was apparently received shortly before the Court hearing in June, although for whatever reason the letter was not before the Court at that time. Both that letter and a subsequent letter have however been placed before us for the present hearing.

3

In its representation, the Representor Trustee asked the Court to give directions and declarations as to the claims of the Seventh Respondent and the origin of the trust assets; asked that the Seventh Respondent be removed or suspended as a Protector of the Trust forthwith; asked that the Court give directions as to the role and identity of the successor or interim Protector if any, or alternatively give directions as to the extent to which the Court considered the Protector was incapable of acting as such; and asked that the Representor be indemnified out of the trust assets in respect of the legal and administration costs and expenses of and incidental to the application.

4

On 14 th June, 2010, the Court adjourned the Trustee's application until 27 th and 28 th September, 2010, and directed that all the beneficiaries be informed of the nature of the Trustee's application to the Court; suspended the powers of the Protector until further order such that the Trust should be read and have effect as though references to the Protector were omitted, with liberty to apply, and made sundry other administrative orders. The intended effect of the sum of these orders was that when the matter came to be considered by the Court again in September, the Court would have sufficient information to be able to give directions to the Trustee on the future administration of the Trust. On 28 th September, the Court was addressed by counsel for the Trustee and for the Sixth Respondent, but no other party appeared. The Court reserved its decision, and judgment is now given.

Background
5

The Court is informed that by an instrument dated 18 th December, 2003, the widow executed a trust surrounding the payment of US$100 to the Trustee. The beneficiaries were named as the Settlor, the Second to Seventh Respondents, any trust association body or other organisation the objects of which are charitable, and any person who might be the subject of an addition to the class of beneficiaries pursuant to the powers conferred on the Trustee. The First Protector was named as the Seventh Respondent, who is the elder son of the Settlor. Part D of the Trust Deed contains provisions regarding the Protector. The remainder of the trust instrument contains at different places various Protector powers including, importantly, at paragraph A16.02, the power to give directions to the Trustee as to the investment of the trust fund.

6

The Court is advised that the trust assets have a current value of approximately US$40 million, those assets comprising cash and investments.

7

The nature of the claims which the Seventh Respondent has put to the Trustee is not entirely clear, but the broad thrust of it appears to be:-

  • (i) The trust assets were not in fact the property of the Settlor, who was thus unable to give the Trustees any better title than she had herself, and the gift into trust therefore would fail, in whole or in part.

  • (ii) The funds constituting the trust fell into and belonged to the estate of the deceased.

  • (iii) Probate has never been obtained in relation to the deceased's estate, either in Indonesia where he was domiciled at the date of his death or in Singapore where the underlying funds were held.

8

As a result of being placed on notice of these claims, the Trustee has not in fact made any distributions to the beneficiaries. Informal attempts at mediation have failed. Furthermore the Trustee is concerned that the Seventh Respondent as Protector of the Trust has a clear conflict of interest in that he cannot at the same time both act as Protector and assert that the Trustee is not entitled to hold the assets on trust which it believes it does. This conflict of interest seemed to the Court in June to be self evident, which was accordingly why the Protector powers were suspended by the Court at that time with liberty to apply.

9

Advocate Speck, for the Trustee, rhetorically asks where the Trustee is supposed to go next. The Trustee is understandably anxious about making any payment out of the Trust fund where the legitimacy of the payments into trust is disputed. At the same time, the Seventh Respondent who is the only person who has disputed the legitimacy of these payments, has taken no action to pursue that claim during the last five years. The Trustee points to a number of inconsistencies in the Seventh Respondent's position, not least that whilst apparently wishing to contend that the transfers into Trust were not legitimate transfers, at the same time he wishes to maintain his position as Protector of the Trust. It would appear from the document which was forwarded to the Court in June that the Seventh Respondent also acknowledges that he attended when the Trust was set up in Jakarta, Indonesia in the sense that although he was asked to leave the room for a while when a discussion took place as to the structure of the class of beneficiaries, he was called back a few minutes later and was told that the Trust had been set up at that time on the signature of the Settlor, his mother, who had appointed him as Protector, to which he agreed. Accordingly, there might be estoppel or other arguments which might be run against him, including for that matter limitation arguments, in any claim which he wished to make as to the validity of...

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3 cases
  • Representation of BNP Paribas
    • Jersey
    • Royal Court
    • 3 November 2011
    ...Respondent F Sixth Respondent and G Seventh Respondent Advocate J. P. Speck for the Representor Authorities Representation of BNP Paribas [2010] JRC 199. The S Settlement 2001/154. Trust — further proceedings relating to the seventh respondent and the trust. THE 1 On 26 th October, 2011, th......
  • Representation of BNP Paribas
    • Jersey
    • Royal Court
    • 16 January 2012
    ...Respondent F Sixth Respondent G Seventh Respondent Advocate J. P. Speck for the Representor. Authorities Representation of BNP Paribas [2010] JRC 199. Representation of BNP Paribas [2011] JRC 213. Trust — application for a payment from the Trust. The Deputy Bailiff 1 Two matters have been r......
  • BNP Paribas Jersey Trust Corporation Ltd v A and B and C and D and E and F and G
    • Jersey
    • Royal Court
    • 12 January 2017
    ...and F Sixth Respondent and G Seventh Respondent Advocate J. P. Speck for the Representor. Authorities Representation of BNP Paribas [2010] JRC 199 . Representation of BNP Paribas [2011] JRC 213 . Representation of BNP Paribas [2012] JRC 017 . Trusts (Jersey) Law 1984. Re S Settlement [2001]......

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