The Wigwam Trust

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Sir Michael Birt,Jurats Christensen,Dulake
• Judgment Date: 02 December 2022
• Neutral Citation: [2022] JRC 263

In the Matter of the Wigwam Trust

And in the Matter of the Representation of HSBC Trustee (CI) Limited

And in the Matter of Article 51 of the Trust (Jersey) Law (As Amended)

[2022] JRC 263

Before:

Sir Michael Birt, Commissioner, and Jurats Christensen and Dulake

ROYAL COURT

(Samedi)

Trust — reasons for blessing the decision of the trustee

Authorities

In the matter of the Wigwam Trust [2020] JRC 228.

Kan v HSBC International Trustee Limited [2015] (1) JLR Note 31.

Kan v HSBC International Trustee Limited [2015] JCA 109.

Advocate D. Evans for the Representor.

Advocate N. M. Sanders for Mrs X..

Advocate B. J. Lincoln for the Minor and Unborn Beneficiaries.

THE COMMISSIONER:

1 On 24 October 2022, the Court blessed the decision of HSBC Trustee (CI) Limited (“the Trustee”) as trustee to distribute all the assets of the trust in question in a specified manner. We now give the reasons for our decision.

Background

2 The Trustee is the trustee of a trust which, for the purposes of this judgment, is called the Wigwam Trust and to which we shall refer simply as ‘the Trust’. There has been a previous judgment in relation to the Trust, namely In the matter of the Wigwam Trust [2020] JRC 228 (“the 2020 judgment”). The 2020 judgment sets out the factual background in considerable detail and reference may be made to that judgment for a fuller description of the background than we think necessary to give in this judgment. For ease of reference, we propose to use similar terms for the purposes of anonymisation as are used in the 2020 judgment.

3 The Trust was established on 14 June 1995 by declaration of trust by the original trustee. The assets of the Trust are derived principally from the successful business activities carried out by Mr Z and others during a 30 year period and thereafter a successful investment strategy following sale of a business.

4 The Trust is a discretionary trust governed by the law of Jersey. The beneficiaries are Mr Z, his wife Mrs Z, their children and grandchildren (of whom there are at present 8 adults (“the adult beneficiaries”) and 2 minors), their remoter issue, 4 philanthropic/charitable entities (including A Limited to which we shall refer shortly) and some dormant corporate entities.

5 A Limited is a company incorporated in the Cayman Islands but administered in Jersey. It is a grant making entity established in order to promote and support such charitable, benevolent or philanthropic objects in any part of the world as it shall consider to be for the benefit of the public in the part of the world concerned. A Limited is part of a wider group of philanthropic organisations based in various countries known as the E Foundation, which carries out the Z family's philanthropic and charitable activities.

6 The activities of the E Foundation and A Limited cover a broad range of charitable and philanthropic activities in a number of areas. The E Foundation has made grants of close to US$2 billion over the last 7 years.

The proposal

7 The Trust is one of a number of trusts which hold the wealth of the Z family (“the Family Trusts”). The family, including all the adult beneficiaries, is very supportive of philanthropic activities and the evidence satisfies us that it has long been the intention that an appropriate portion of the assets in the Family Trusts (being roughly one third of the current value of the Family Trusts) should be used for the benefit of the family including future generations and the balance of the assets in the Family Trusts (being roughly two thirds of the current value of the Family Trusts) should be made available for philanthropic purposes.

8 At present, the funds intended both for the family and for philanthropic purposes are held in the Family Trusts. Furthermore, some of the Family Trusts have provisions (for example, perpetuity periods) which are not felt to be satisfactory in the long term. Mr Z has written to the Trustee and to the Trustees of the other Family Trusts requesting various distributions with a view to simplifying matters by separating the assets intended for the benefit of the family from those intended for philanthropic purposes. A Limited has also written to request a distribution.

9 The overall proposal requested by Mr Z is explained in detail in his letter of request and in the evidence before us and we would summarise the proposal in very simple terms as follows:

• (i) Mr Z and Mrs Z would each establish a new trust (to be known as a Reserve Trust) for the benefit of their descendants.

• (ii) The Trust would make a distribution of US$750m to Mr Z who would intend to settle it on one of the Reserve Trusts.

• (iii) One of the Family Trusts established under the law of the Cayman Islands (“the M Trust”) would make a similar distribution to Mrs Z who would in turn intend to settle that sum on the second Reserve Trust.

• (iv) On their deaths, Mr and Mrs Z intend to leave their personal assets, which are substantial, to certain trusts known as...