The factsĪ trust, of which Basil Dunning was de facto settlor, was set up in 1995 for the benefit of Mr Dunning, his children and remoter issue, as well as any further beneficiaries added under exercise of the trustees’ discretion. In any event, however, s53(4) provides a lifeline.In this case, the judge considered whether letters of wishes (or “wish letters”) had to be disclosed to trust beneficiaries who had requested them or whether they remained confidential to the trustees. In practice, it will doubtless be rare that all beneficiaries will be in existence and ascertained and a potentially deserving, would-be beneficiary omitted, without a trustee having an opportunity first to appoint such. Guernsey trust law has its own specificity. The case is therefore important for its emphasis on the fact that, although Guernsey trust law may owe a great deal to English trust law, it cannot be assumed that it is to the same effect. ![]() In particular, it cited the cases of Spread Trustee Co Ltd v Hutcheson (2002) GCA 299 and 2 AC 194 and Investec Trust (Guernsey) Ltd v Glenalla Properties Ltd GLR 97 in support of the proposition that the question for the court was ".whether any rule of English law has been modified by a Guernsey statute." concluding in the present case that: "for the reasons which we have given, we are satisfied that it has." The court made important observations about the nature of Guernsey trust law and its relation to English trust law along with comments about statutory interpretation. If the appellants were to be allowed to reimburse themselves, the consequence would be that, despite being successful, Rusnano Capital would effectively have paid the losing party's costs in relation to the section 53(3) argument. The appellants had fought Mr Erochkine's battle for him. Mr Erochkine ought to have been joined to the Royal Court proceedings, with the trustee and Pullborough remaining neutral. In reality, the contest was between Rusnano Capital and Mr Erochkine. The Court of Appeal refused to allow the appellants to reimburse themselves from the trust fund, either for their own costs in connection with the litigation or for the costs awarded against them. Costs below had been reserved to the Deputy Bailiff and remained to be fixed. The appellant's conduct (at least in the appeal where the s53(4) point had been taken) had not been unreasonable. The respondents were therefore awarded 80% of their costs.Īlthough Rusnano Capital asked for costs on the indemnity basis, the court only awarded them on the recoverable basis. A deduction was made of 20% to allow for the appellant's success in respect of the s53(4) issue. The appellants lost on the principal issue (the construction of s53(3)) which had taken up most of the written and oral submissions. The later costs judgment criticised both parties for not appreciating the significance of s53(4). The court pointed out that beneficiaries could be added before a charity sought termination and again there was the possibility of an application under s53(4). We question whether they are as common nowadays as perhaps they once were and whether they are to be encouraged in an international finance centre such as Guernsey, with a high reputation for upholding international standards." ![]() The Court of Appeal was unmoved, saying: "We are not necessarily too discouraged at the possible effect on such trusts. The argument was along the lines that such an institution could instantly seek the termination of the trust and scoop the pot. However, a discretionary trust whose beneficiaries were described as 'my wife X and my children A, B and C' could be brought to an end by A, B, C and X resolving to do so even if there was an intention to exercise a power to add grandchildren of spouses of A, B or C as beneficiaries at a later stage."Īn interesting feature of the case was the Court of Appeal's rejection of an argument based upon the effect on so-called "Red Cross trusts." Here we are describing a trust which begins life with only a single beneficiary, a charitable institution, where there is no real intention of benefiting that charity. "A discretionary trust where the beneficiaries were described as 'the children and remoter issue of the settlor' would not be affected because, until there was no possibility of any remoter issue being born in the future, all the beneficiaries would not be 'in existence' as required by section 53(3). It dealt with the rights of a single beneficiary of a trust - which might be a family member - to bring that trust to an end. The Guernsey Court of Appeal case of Molard International (ptc) Ltd v Rusnano Capital AG (in liquidation) was decided just before Christmas. Saunders v Vautier - Guernsey's version Gordon Dawes and Matt Guthrie, Mourant, Partners, Guernsey, 27 February 2020
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |