West v Lazard Bros and Company (Jersey) Ltd

JurisdictionJersey
CourtRoyal Court
JudgeHamon, Commissioner and Jurats Coutanche and Vibert:
Judgment Date18 October 1993
Date18 October 1993
ROYAL COURT
Hamon, Commissioner and Jurats Coutanche and Vibert:

P.C. Sinel for the plaintiffs;

J.G. White for the defendants.

Cases cited:

(1) Abdel Rahman v. Chase Bank (C.I.) Trust Co. Ltd., 1991 JLR 103, considered.

(2) Amalgamated Inv. & Property Co. Ltd. v. Texas Commerce Intl. Bank Ltd., [1982] Q.B. 84; [1981] 1 All E.R. 923; [1981] Com. L.R. 37; (1981), 125 Sol. Jo. 133; on appeal, [1982] Q.B. 84; [1981] 3 All E.R. 577; [1982] 1 Lloyd's Rep. 27; [1981] Com. L.R. 236; (1981), 125 Sol. Jo. 623, dicta of Goff, J. and Lord Denning, M.R. considered.

(3) Att. Gen. v. Foster, 1989 JLR 70; on appeal, sub nom. Foster v. Att. Gen., 1992 JLR 6, distinguished.

(4) Bartlett v. Barclays Bank Trust Co. Ltd., [1980] Ch. 515; [1980] 1 All E.R. 139; (1979), 124 Sol. Jo. 85, considered.

(5) Beaman v. A.R.T.S. Ltd., [1949] 1 K.B. 550; [1949] 1 All E.R. 465; (1949), 65 T.L.R. 389; 93 Sol. Jo. 236, applied.

(6) Behrens v. Bertram Mills Circus Ltd., [1957] 2 Q.B. 1; [1957] 1 All E.R. 583; (1957), 101 Sol. Jo. 208, dicta of Devlin, J. considered.

(7) Channel Islands & Intl. Law Trust Co. Ltd. v. Pike, 1990 JLR 27, considered.

(8) Chaplin v. Hicks, [1911] 2 K.B. 786; [1911-13] All E.R. Rep. 224; (1911), 105 L.T. 285; 27 T.L.R. 458; 80 L.J.K.B. 1292; 55 Sol. Jo. 580.

(9) Colquhoun of Luss v. Pirunica Trustees (Jersey) Ltd., Royal Ct., October 6th, 1986, unreported.

(10) Cutner v. Green, 1980 J.J. 269, applied.

(11) Dawson, Re, Union Fidelity Trustee Co. Ltd. v. Perpetual Trustee Co. Ltd., [1966] 2 N.S.W.R. 211; (1966), 84 W.N. (Pt. 1) (N.S.W.) 399.

(12) Denney v. Hodge, 1973 J.J. 2389, considered.

(13) Derry v. Peek (1889), 14 App. Cas. 337; [1889-90] All E.R. Rep. 1; 61 L.T. 265; 5 T.L.R. 625; 58 L.J. Ch. 864; 38 W.R. 33; 54 J.P. 148; 1 Meg. 292, considered.

(14) Dormy Hotels Ltd. v. Stewart, 1969 J.J. 1247.

(15) Dune v. Cross, English Court of Appeal, 1990, unreported, dictum of Dillon, L.J. applied.

(16) Glasson (John) Plumbling & Heating Engrs. Ltd. v. Select Hotels (Jersey) Ltd., 1987-88 JLR 434, dicta of Tomes, Deputy Bailiff considered.

(17) Godfray v. Godfray (1865), 3 Moo. P.C.C.N.S. 316; 16 E.R. 120, dicta of Turner, L.J. considered.

(18) Golder v. Peak, 1966 J.J. 619.

(19) Guerin v. R., [1984] 2 S. Ct. Rep. 335, considered.

(20) Hadley v. Baxendale, [1843-60] All E.R. Rep. 461; (1854), 9 Exch. 341; 156 E.R. 145; 23 L.T.O.S. 69; 18 Jur. 358.

(21) Hayes v. James & Charles Dodd, [1990] 2 All E.R. 815; [1988] BTLC 380, applied.

(22) Johnson Matthey Bankers Ltd. v. Shamji, 1985-86 JLR N-26.

(23) Kententertainments Ltd. v. Great Yarmouth B.C., High Court, Queen's Bench Division, 1983, unreported, dicta of Cantley, J. applied.

(24) Kitchen v. Royal Air Force Assn., [1958] 1 W.L.R. 563; [1958] 2 All E.R. 241; (1958), 102 Sol. Jo. 363, dicta of Lord Evershed, M.R. applied.

(25) Knox v. MacKinnon (1888), 13 App. Cas. 753, dicta of Lord Watson applied.

(26) Lane v. Lane, 1985-86 JLR 48, dictum of Crill, Deputy Bailiff considered.

(27) Liverpool C.C. v. Irwin, [1977] A.C. 239; [1976] 2 All E.R. 39; (1976), 74(1) L.G.R. 392; 13 H.L.R. 38; 32 P. & C.R. 43; 238 E.G. 879; 120 Sol. Jo. 267, considered.

(28) Lloyds Bank Ltd. v. Bundy, [1975] Q.B. 326; [1974] 3 All E.R. 757; [1974] 2 Lloyd's Rep. 366; (1974), 118 Sol. Jo. 714, distinguished.

(29) McPhail v. Doulton, [1971] A.C. 424; [1970] 2 All E.R. 228; (1970), 114 Sol. Jo. 375.

(30) Olley v. Marlborough Court Ltd., [1949] 1 K.B. 532; [1949] 1 All E.R. 127; [1949] L.J.R. 360; (1948), 65 T.L.R. 95; 93 Sol. Jo. 40.

(31) Osmond v. McColl-Frontenac Oil Co. Ltd., [1939] 2 W.W.R. 387; [1939] 3 D.L.R. 260; (1939), 47 Man. L.R. 176, dicta of Dysart, J. considered.

(32) O'Sullivan v. Management Agency & Music Ltd., [1985] Q.B. 428; [1985] 3 All E.R. 351; (1984), 128 Sol. Jo. 548, dicta of Waller, L.J. considered.

(33) Pass v. Dundas (1880), 43 L.T. 665; 29 W.R. 332, considered.

(34) Pirouet v. Pirouet, 1985-86 JLR 151, dicta of Dorey, Commr. applied.

(35) Rae v. Meek (1889), 14 App. Cas. 558, dicta of Lord Herschell considered.

(36) Rookes v. Barnard, [1964] A.C. 1129; [1964] 1 All E.R. 367; [1964] 1 Lloyd's Rep. 28; (1964), 108 Sol. Jo. 93, dictum of Lord Devlin considered.

(37) Tucker, In re, 1987-88 JLR 473, considered.

(38) Wallis v. Taylor, 1965 J.J. 455, considered.

(39) Wilkins v. Hogg (1861), 3 Giff. 116; 66 E.R. 346; on appeal (1861), 5 L.T. 467; 31 L.J. Ch. 41; 10 W.R. 47; 8 Jur. N.S. 25.

(40) Wimborne (Viscount), Ex p., 1983 J.J. 17, dictum of Crill, Deputy Bailiff considered.

Additional cases cited by counsel:

A.B. v. South W. Water Servs. Ltd., [1993] Q.B. 507.

Baker (G.I.) Ltd. v. Medway Bldg. & Supplies Ltd., [1958] 3 All E.R. 540.

Cassell & Co. Ltd. v. Broome, [1972] 1 All E.R. 801.

Ferbrache v. Bisson, 1981 J.J. 103.

Hurst, Re, Addison v. Topp (1892), 8 T.L.R. 528

Jones (née Ludlow) v. Jones (No. 2), 1985-86 JLR 40.

Knights (Jersey) Ltd., Re, Madok Ltd. v. George Butler (Dudley) Ltd., 1962 J.J. 207.

Lonrho PLC v. Fayed, [1991] 3 All E.R. 303.

Loutfi v. C. Czarnikow Ltd., [1952] 2 All E.R. 823.

Lucking's Will Trusts, Re, Renwick v. Lucking, [1967] 3 All ER 726.

National Westminster Bank PLC v. Morgan, [1985] 1 All E.R. 821.

Rebours v. Jersey Electric Co. Ltd., 1984 J.J. 67.

Snook v. London & W. Riding Invs. Ltd., [1967] 1 All E.R. 518.

Steamship Enterprises Inc., Liverpool (Owners) v. Ousel (Owners), The Liverpool (No. 2), [1963] P. 64.

Stoneleigh Fin. Ltd. v. Phillips, [1965] 1 All E.R. 513.

Waterman's Will Trusts, Re, Lloyds Bank Ltd. v. Sutton, [1952] 2 All E.R. 1054.

Yorkshire Ry. Wagon Co. v. Maclure (1882), 21 Ch. D. 309.

Legislation construed:

Royal Court Rules 1992 (R. & O. 8509), r.4/6: The relevant terms of this rule are set out at page 296, lines 20-33.

Trusts (Jersey) Law 1984, art. 1(1): The relevant terms of this paragraph are set out at page 178, line 44 - page 179, line 2.

art. 9(1): The relevant terms of this paragraph are set out at page 179, lines 9-17.

art. 26(1): The relevant terms of this paragraph are set out at page 323, lines 13-18.

(9), as amended: The relevant terms of this paragraph are set out at page 290, lines 2-5.

art. 53: The relevant terms of this article are set out at page 293, lines 7-27.

art. 54: The relevant terms of this article are set out at page 204, lines 38-40.

art. 55: The relevant terms of this article are set out at page 204, lines 41-45.

Code Civil (France), art. 1116: The relevant terms of this article are set out at page 300, lines 22-25.

Texts cited:

Bosquet, Dictionnaire de Droit, at 549 (1847).

Cross on Evidence, 7th ed., at 294-295 (1990).

De Férrière, Dictionnaire de Droit et de Pratique, at 21 (1771).

Gazzaniga, Introduction Historique au droit des obligations, para. 197, at 225 (1992).

Halsbury's Laws of England, 3rd ed., vol. 24, para. 552, at 280; 4th ed., vol. 12, para. 1486, at 620; vol. 16, para. 663, at 615-616; vol. 28, paras. 833-835, at 371-372.

Hayton & Marshall, Cases & Commentary on the Law of Trusts, 8th ed., at 737 (1986).

Houard, Dictionnaire Analytique, Historique, Étymologique, Critique et Interprétif de la Coutume de Normandie, at 549 (1780).

Howard & Ashworth, Some Problems of Evidence Obtained by Hypnosis, Criminal Law Review, at 478 (1981).

Le Geyt, Manuscrits sur la Constitution, les Lois, & les Usages de Jersey, vol. 1, at 297 (1846).

McGregor on Damages, 14th ed., para. 309, at 226 (1980).

Matthews, The Efficacy of Trustee Exemption Clauses in English Law, The Conveyancer & Property Lawyer, at 42 (1989).

Matthews & Sowden, The Jersey Law of Trusts, 2nd ed., paras. 14.8-14.9, at 82 (1990).

Phipson on Evidence, 14th ed., para. 4-10, at 57-58 (1990).

Poingdestre, Les Lois et Coutûmes de Jersey, at 205; at 206; at 206-207 (1928).

Pothier, Traité des Obligations, vol. 1, para. 15, at 20 (1821 ed.); at 20 (1827 ed.).

Report of the Commissioners appointed to inquire into the Civil, Municipal & Ecclesiastical Laws of the Island of Jersey, together with Minutes of Evidence (Command Papers, First Series, No. 2761), Report, at xxv (1861).

Spencer Bower & Turner, Estoppel by Representation, 3rd ed., at 157 (1977).

Trusts—powers and duties of trustees—trust company—trust company using standard form trust has duty to explain terms to settlor—if has no knowledge of terms, settlor may not be bound

Trusts—law applicable—retrospective application of Trusts (Jersey) Law 1984—by 1984 Law, arts. 54 and 55, Law does not affect legality of pre-1984 acts under pre-1984 trusts, or validity of such trusts—to avoid confusion, Law assumed to govern all trusts equally, whenever created

Trusts—fraud—equitable fraud—"fraud" in Trusts (Jersey) Law 1984 is equitable fraud (dol), i.e. civil wrong, not criminal fraud (fraude)—Law gives equitable jurisdiction to Royal Court

Trusts—liability of trustees—restoration of loss—by Trusts (Jersey) Law 1984, art. 26(1), trustee in breach of trust liable for loss of value of trust assets and lost profits—test is whether loss caused by breach—contract and tort principles of remoteness inapplicable

Trusts—liability of trustees—restoration of loss—compound interest—monetary reparation by trustee for lost trust assets to be calculated at date of restitution, not date of loss—original value of loss to be compounded to achieve full restitution

The plaintiffs brought two actions against the defendants for alleged breaches of trust and fraudulent mismanagement in connection with various transactions in which they were interested.

The first plaintiff, an entrepreneur and engineer, entered into an agreement with the defendants, who were a banking and trustee company respectively, whereby they would invest in his engineering company, "ULS." The only asset of ULS was a manor house in England called "Stonehouse Court," in which the first plaintiff and his wife resided.

Under the agreement, a...

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