23 April 2008

Re The A Trust; FM v. ASL Trustee Company Limited (2006) 9 ITELR 127, Royal Court, Jersey

Facts of the Case

The husband and wife were involved in bitterly contested divorce proceedings in England.  The A Trust was a Jersey trust of which the husband, wife and their children were the beneficiaries.  In 2001, a deed of appointment had been executed so that the income became payable to the wife during her life, thereafter to the husband and thence on discretionary trust in favour of the children.  The trust owned the property in London where both the wife and children lived. The English Family Court varied the trust so as to extinguish the husband’s interest and also ordered the husband to transfer the benefit of a loan to the trust.  The wife then applied for recognition and enforcement of this order in Jersey.

The Decision

Deputy Bailiff Birt held that this being a Jersey trust, the trustee was bound to hold the trust fund on the trusts set out in the trust deed, unless ordered to do otherwise by the Jersey Court.  The trustee in this case had not submitted to the jurisdiction of the English Court and therefore it was a matter for the Jersey Court’s discretion whether to enforce the English Court’s order in the interests of justice and comity.  Here, the husband had refused to maintain his wife and children.  The trust assets were the only substantial assets in the UK.  Accordingly, the Court ordered those assets to be used exclusively to support the wife and children.

Points of Interest

Here, the trustee had not submitted to the jurisdiction of the English Court and therefore could not be said to have agreed in advance to be bound by its decision.  The Jersey Court was therefore free to decide whether to give effect to the order of the English Court.  The conduct of the husband in deliberately not maintaining his wife and children clearly tipped the balance in favour of recognition and enforcement by the Jersey Court.

Category: Article