AO HALL HALF DAY TRUST CONFERENCE WHAT FUTURE FOR TRUSTS? TRUSTS AND PRIVATE INTERNATIONAL LAW PAUL BUCKLE Monday 28 April 2014 8.30am – 1.30pm
WHAT IS PRIVATE INTERNATIONAL LAW? The branch of the law which decides what law a court will apply to a matter which has an association with both the court’s domestic law, but also with some aspect of foreign law - Does the court have jurisdiction? - What law should it apply if it does have jurisdiction? - Will a judgment be enforced? • The international nature of trusts nowadays
SOME EXAMPLES A court is faced with an application for relief by the trustees (who are domestically resident) of a trust which is governed by a foreign law. Can the court hear the matter or should it refer it to the foreign court? If the court can hear it, should the court apply its own or the governing law of the trust to determine the matter? A settlor who is non-Guernsey resident creates a Guernsey law trust, but is then alleged to have lacked mental capacity to do so. Which law will be used to decide whether or not the settlor was legally capable, Guernsey law or the law of the place where he was at the time he created the trust?
SOME MORE EXAMPLES • The matrimonial court of Anti-trustitopia declares a Guernsey law reserved powers trust is invalid as a sham because the settlor retained control. Was it entitled to do so, and should the trustees challenge its decision in Anti- trustitopia or here in Guernsey? • A trustee of a Guernsey law trust applies to the Guernsey Court for directions as to a particular matter affecting the administration of the trust. The beneficiaries apply to their own domestic court for an order to do with the same matter. Should the two proceedings both go ahead or should one be stayed pending a decision being reached in the other? • A trust deed for a Guernsey law trust says any dispute affecting the trust must be heard by the Guernsey Court, but the trustee is located in Cayman and would prefer to litigate there. Can it?
WHY SHOULD TRUSTEES CARE? • Foreign orders, e.g. matrimonial orders and enforcement/submission • Personal liability for breach of trust – Minwalla - on contracts – Investec v Glenalla Properties Limited and others - • The Hague Convention on the Law Applicable to Trusts and on their Recognition • Choice of forum • Firewall legislation – Rothschild v Pateras
JURISDICTION • Section 4 of The Trusts (Guernsey) Law, 2007 (“TGL 2007”) - Guernsey law trusts - Foreign law trusts, if (i) trustee resident in Guernsey (ii) trust property situate/administered in Guernsey (iii) terms say Guernsey has jurisdiction
BUT WHAT IS THE PROPER LAW? • Articles 6/7 of the Hague Convention • Section 3 of the 2007 Law - expressed choice of settlor - implied choice from (i) designated place of administration (ii) situs of assets (iii) place/residence of trustees (iv) place where objects of trust are to be fulfilled
WHAT IS COVERED BY THE PROPER LAW? • TGL 2007 - Parts 1, 2, 3 and 4 - Article 8 of the Hague Convention - Validity, construction and administration • Article 9 of the Hague Convention and administration - Chellaram v Chellaram
WHOM TO SERVE AND LEAVE TO SERVE OUT • Rule 35 of the Royal Court Civil Rules 2007 - beneficiaries • Rule 8 of the Civil Rules - Carlyle Capital Corporation v Roberts - merits - jurisdictional gateway - forum conveniens
IS GUERNSEY THE APPROPRIATE FORUM? • Spiliada - suitability - with what forum does the action have the most real and substantial connection? - convenience, expense, witnesses, governing law, residence of parties - procedural advantage such as interest, limitation normally are irrelevant • Jurisdiction clauses
JURISDICTION CLAUSES IN TRUST INSTRUMENTS • What is the relevance of these clauses? • What is meant by exclusive jurisdiction? - Crociani v Crociani • What is meant by forum for administration? • - Koomen v Bender - Crociani • What is the result in our case?
PARALLEL PROCEEDINGS AND STAYS • Beneficiaries issue parallel proceedings in Cayman to confirm binding nature of letter of wishes • Should we apply to stay these proceedings? - principles, Compass , In re representation of AA, Colussi , Crociani v Crociani - chances of success • Anti-suit injunctions - Crociani
FORCED HEIRSHIP PROCEEDINGS IN ANTITRUSTITOPIA • How does section 14 apply? - meaning of “forced heirship rights” - enforcement - submission to the jurisdiction – Minwalla - article 15 of the Hague Convention • Do we submit or not?
AO HALL HALF DAY TRUST CONFERENCE WHAT FUTURE FOR TRUSTS? TRUSTS AND PRIVATE INTERNATIONAL LAW PAUL BUCKLE Monday 28 April 2014 8.30am – 1.30pm
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