The Royal Court in Jersey ruled that a private trust company (PTC) seeking to bring claims for breach of trust against its predecessors could not benefit from the Jersey law doctrine ofempêchement d'agir. This was because the PTC had not been incorporated at the time that the three year deadline for bringing claims under Article 57(3B) of the Trusts (Jersey) Law 1984 expired. The doctrine of empêchement stops time running on limitation periods in situations of practical impossibility.
The First to Third Plaintiffs were beneficiaries of a Jersey law discretionary trust bringing negligence claims of around £130 million against the First to Third Defendants, the former trustees, as well as breach of contract claims against the Fourth Defendant, the former trust administration services provider.
A Fourth Plaintiff, a newly-incorporated PTC appointed as successor trustee, was later permitted to join the proceedings but only to bring claims against the Fourth Defendant. It then applied to add claims against the First to Third Defendants, even though it was outside the three year prescription period. The court determined that that application should be treated as a joinder application and that the doctrine of empêchement did not apply in the circumstances.
The court accepted that it was arguable that the doctrine of empêchement could apply to claims for breach of trust (though whether it does apply is yet to be decided) but rejected the idea that empêchement could apply to "the office of trustee". The Fourth Plaintiff had not existed during the prescription period, therefore it could not have faced a practical impossibility in issuing proceedings.
Evidence presented to the court also demonstrated that it had not been practically impossible to bring proceedings before the deadline, as alternative remedies had been available: the dissatisfied beneficiaries, the First to Third Plaintiffs, could have applied to the court under Article 51 of the Trusts (Jersey) Law 1984 to replace the trustee.
While the decision relates to a Jersey law doctrine which may not even apply to claims for breach of trust, the principle that the doctrine could not apply to "the office of trustee" may have more general application in connection with limitation periods.
Certainly, it will be crucial for beneficiaries to ensure that they are aware of the applicable limitation periods for any claims they may have, and if the trustees are delaying taking forward such claims on their behalf, it may be necessary to act swiftly to replace them.