The case also raises issues concerning advice as a defence and the ambit of Lord Walker’s assessment in Pitt v Holt. The claim is extremely document-heavy and factually complicated, and if it goes to trial will include evidence of many tens of thousands of documents and a trial of up to a month. Giles Richardson of Serle Court is also advising.
The case is ground breaking in that it defines (1) the duties of trustees dealing with “insolvent” trusts; (2) the competing rights of creditors and beneficiaries; and (3) the fetters on fiduciaries’ (including protectors’) powers that arise. It also confirms that the court’s supervisory jurisdiction is wide ranging permitting it to impose a “winding up” type regime in certain limited circumstances. The firm is advising in conjunction with Tom Smith QC.
The Court gave judgment confirming that the method was valid and made a broad pronouncement about showing comity to foreign courts. The trustees’ were ordered to give disclosure and pay our client’s costs. The decision has been seen as an important development by both Family and Trust lawyers, not only in Jersey but also in England in particular. It is now the leading Jersey case on the correct approach to this method of obtaining disclosure against a trustee. We acted in conjunction with Italian and US law firms.
The firm successfully applied for one of Jersey’s first statutory Hastings Bass and mistake orders pursuant to which the principal beneficiary the Court set aside the appointments of two purported trustees in order to avoid horrendous UK tax consequences. Guillaume Staal appeared at the hearing of the application which was granted by a judgment ( JRC 48) which also clarified, in detail, the Court’s powers to ratify actions of invalidly appointed trustees. Richard Wilson QC of Serle Court and Lynton Tucker of New Square Chambers were engaged to act on behalf of the principal beneficiary and Jonathan Riley of Michelmores provided an expert tax opinion.
The contentious issues included the board composition of the corporate trustee of a Jersey trust, whether the Jersey trust and a Cayman trust (which was a beneficiary of the Jersey trust, and reliant on distributions) should be consolidated and, if so, which of those two trusts should be collapsed into the other. The Swiss firm Lenz & Staehelin are advising, in conjunction with Tom Lowe QC.