The Internine and The Intertraders Trusts

CourtCourt of Appeal
JudgeBeloff, Nutting and Vaughan, JJ.A.
Judgment Date10 September 2004
Date10 September 2004
Beloff, Nutting and Vaughan, JJ.A.

P.D. James for the representor;

A.R. Binnington for the second respondent;

M.H.D. Taylor for the third to eighth respondents;

The first, ninth and tenth respondents did not appear and were not represented.

Case cited:

(1) Schmidt v. Rosewood Trust Ltd., [2003] 2 A.C. 709; [2003] 3 All E.R. 76; 2001-03 MLR 511, dicta of Lord Walker of Gestingthorpe applied.

Additional cases cited by counsel:

Broere Trusts, In re, 2004 JLR N [2].

Crowe v. Stevedoring Employees Retirement Fund Pty. Ltd., [2003] VSC 316.

Glazebrook v. Housing Cttee., 2002 JLR N [43].

Maon v. Qure (ne Colligny), 2001 JLR 187.

Mayo Associates S.A. v. Cantrade Private Bank Switzerland (C.I.) Ltd., 1998 JLR 173.

Rabaiotti 1989 Settlement, In re, 2000 JLR 173.

Text cited:

Lightman, The Trustees' Duty to Provide Information to Beneficiaries, Newsletter of Contentious Trust & Probate Specialists, Issue 58 (2004).

Trustspowers of courtdisclosure of trust documentsdiscretionary power to order disclosure of trust information to beneficiaryto be deferred if applicant's status as beneficiary uncertain unless exceptional circumstances, e.g. applicant previously uncontested beneficiary and unsatisfactory restriction on court's supervisory powers

The third to seventh respondents applied to the Royal Court for an order for disclosure of information concerning two trusts.

A dispute arose between the sibling beneficiaries of two Jersey trusts concerning the distribution of their family assets, which included those trusts and property in Saudi Arabia. They made an agreement in 2000 by which the beneficial entitlement to the trusts would be allocated to the second party (the representor and the eighth to tenth respondents) whilst the first party (the third to seventh respondents) would take the assets in Saudi Arabia.

Proceedings were subsequently instituted to determine, inter alia, whether, as a result of the agreement, the members of the first party had disclaimed their interests in the trusts or, alternatively, had come under a binding obligation under Saudi law to disclaim their interests. Those proceedings were scheduled to be tried in January 2005.

Meanwhile, in 2004 the agreement was found to be null and void in separate proceedings in Saudi Arabia. Following that decision, the first party applied to the Royal Court for an order for disclosure by the trustees (the first and second respondents) of financial information concerning the trusts for the period since the agreement. The application was opposed by the representor on the basis that the members of the first party were no longer beneficiaries and therefore not entitled to the information. The other beneficiaries and the trustees did not oppose disclosure.

The Royal Court granted the application on the grounds that (a) the Saudi decision that the agreement was null and void returned the parties to the previous position when they had all been beneficiaries; (b) only the representor opposed the application; and (c) even if the agreement were later to be upheld on appeal in Saudi Arabia, no detriment would be caused to the representor by ordering disclosure.

Although the representor's appeal was subsequently rejected by the Saudi Court of Appeal, he claimed that further remedies were available to him in that jurisdiction. He appealed against the Royal Court's order and submitted that disclosure could not be ordered until the issue of whether or not the first party were beneficiaries had been conclusively resolved in all jurisdictions.

The first party submitted in reply that the courts had supervisory power to order disclosure in these circumstances, especially since the representor's appeal had been dismissed in Saudi Arabia and only exceptional remedies remained available to him there.

Held, dismissing the appeal:

The Royal Court's order for disclosure of financial information by the trustees would be upheld. Although it was uncertain whether, in light of the agreement, the members of the first party remained beneficiaries of the trusts and as such were entitled to ask the court to exercise its supervisory jurisdiction to order disclosure of financial information concerning the trusts, their application raised exceptional circumstances which justified doing so. Those circumstances were, inter alia, that the members of the first party were not strangers to the trusts but had been undisputed beneficiaries until 2000; the agreement which purported to remove that status had been declared null and void in Saudi Arabia and therefore they reverted to their pre-agreement status as beneficiaries pending final determination of the issue; to hold otherwise would unsatisfactorily restrict the court's supervisory powers in relation to the trusts; and the representor's opposition to disclosure was merely based on pragmatic grounds. In ordinary circumstances, however, the disclosure order would have been deferred until the first party members' status as beneficiaries had been confirmed ( paras. 21-24).

1 VAUGHAN, J.A.: On April 30th, 2004, an application by the third to seventh respondents to the Samedi Division of the Royal Court asked that the first and second respondents should disclose...

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3 cases
  • Representation of U
    • Jersey
    • Royal Court
    • 6 July 2011
    ...V Seventh Respondent Advocate R MacRae for the Representor. B, the first respondent, was present. Authorities Re Internine Trust [2004] JLR 325. Schmidt v Rosewood Trust Limited (2003) 2 AC 709. Lewin on Trusts 18th Edition. Trusts (Jersey) Law 1984. In Re Rabaiotti 1989 Settlement [2000......
  • X (Trust) 01-Oct-12
    • Jersey
    • Royal Court
    • 1 October 2012
    ...-v- Rosewood Trust Limited [2003] UKPC 26 . Schmidt -v- Rosewood Trust Limited [2003] 3AER 76 . Re Internine and the Intertraders Trusts [2004] JLR 325 . Bastiaan Broere Trust and the Cornelis Broere Trust [2004] JLR N 2 . Internine Trusts [2006] JLR 195 . O'Rourke -v- Darbishire [1920] AC......
  • EE and The Royal Bank of Canada Trust Company (Jersey) Ltd
    • Jersey
    • Royal Court
    • 1 May 2014
    ...(Jersey) Limited [2007] JLR 527 . Re Rabaiotti 1989 Settlement [2000] JLR 173 . Schmidt v Rosewood [2003] 2 AC 709 . Re Internine Trust [2004] JLR 325 . Alhamrani v Morgan and Ors [2007] JRC 053 . Trusts (Jersey) Law 1984. Vieira v Kordas [2013] JRC 251 . Settlement — application for direct......

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