Trusts & Trustees Advance Access originally published online on June 16, 2008
Trusts & Trustees 2008 14(6):384-391; doi:10.1093/tandt/ttn046
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© The Author (2008). Published by Oxford University Press. All rights reserved.
Jurisdiction over trust disputes under Article 5(6)
*LL.B, LL.D (Newcastle), M.A, LL.D (Cantab). Justice of Caribbean Court of Justice, Port of Spain, Trinidad & Tobago.
Legal context. The claimant beneficiaries under a trust expressly governed by English law invoked Article 5(6) of the Jurisdiction Regulation 44/2001 to sue the Spanish-domiciled defendant in England ‘as beneficiary’ and also ‘as trustee’ due to her purportedly being ‘Appointor’, having appointed herself to be ‘Appointor’.
Fact. The defendant was sued because trustees originally located in Jersey and then in Liechtenstein and the BVI, in breach of trust had overpaid her as beneficiary under an express or a resulting trust. The claimants also sought to have the Court replace her with a new Appointor.
Analysis: The judge rightly held the trust was domiciled in England, the expressly chosen law being the system of law with which the trust had its closest and most real connection. However, he then surprisingly held the English court had no jurisdiction. The claim against the defendant for the overpayments in reality was a claim against her in her capacity as someone not entitled to those payments viz as a stranger, not as a beneficiary. The claim against her as holder of a fiduciary power was not a claim against her ‘as trustee’.
The official Schlosser Report and Article 23(4) should have led the court to apply a purposive construction to Article 5(6), so that it covers all proceedings relating to the internal workings of a trust, viz proceedings brought against a settlor or beneficiary or trustee or holder of a fiduciary power where relations between those persons or their rights or obligations under the trust are involved.