THE C TRUST [Royal Ct]

JurisdictionJersey
CourtRoyal Court
Judge(Clyde-Smith, Commr. and Jurats Kerley and Nicolle)
Judgment Date25 April 2012
Date25 April 2012
ROYAL COURT
(Clyde-Smith, Commr. and Jurats Kerley and Nicolle)

Trusts—powers and duties of trustees—power to exclude beneficiary

The representors ("the grandchildren") were seven and five years old. Following the breakdown of their parents' marriage in 2007, they had moved with their mother from England to Peru (where the mother's family lived). The father and the grandchildren were beneficiaries of a Jersey trust of which the father's father (i.e. the grandfather) was the settlor (the trust had assets of approximately £4.8m.). The settlor had died in 2004. According to his letter of wishes, his widow was to be the main beneficiary of the trust during her lifetime and, after her death, one half of the trust was to held for the father and the other half for the grandchildren. He expressed the hope that the trustees would assist any of his grandchildren if they were in financial need, including in respect of their education.

The grandchildren's mother commenced ancillary relief proceedings against the father in England. The widow was opposed to the trust fund being used to benefit the grandchildren and, indirectly, their mother. The trustee loaned the father £295,000 to enable him to pay a lump sum awarded to the mother by the English High Court. Separately, the grandchildren asked the trustee for financial assistance in respect of their general welfare and education, which was not provided. To protect the trust from claims by the grandchildren (and, indirectly, their mother), the trustee executed an irrevocable instrument of appointment under which the widow was to be the sole beneficiary of the trust during her lifetime. The grandchildren, who were effectively excluded from the beneficial class of the trust during the widow's lifetime, sought to set that instrument aside.

Held: In the exercise of its supervisory jurisdiction over trusts, the court could only set aside an exercise of discretion by a trustee if it was perverse, i.e. if no reasonable trustee could have made it (In re H Trust, 2007 JLR 569, applied; S v. L, 2005 JLR N [34], applied; Lewin on Trusts, 18th ed., para. 29-143, at 1036-1037...

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