Representation of A and B re the C Trust [2012]JRC098 14-May -2012 Jersey

Previously in the case of In the matter of the representation of the Sanne Trust Company Limited [2009] JRC 025B, the Royal Court held that steps may be taken to protect the identity of minors and the privacy of the trust arrangements, but there is no reason to anonymise professional advisers who have committed mistakes; the Royal Court has now extended this principle to trustees and protectors whose actions have been criticised by the Court.

Background to case: In the matt er of the representati on of the C Trust [2012]JRC086B

The Royal Court set aside an instrument of appointment on the ground that the decision of the trustees was one at which no reasonable trustee could have arrived. For the avoidance of doubt, minor grandchildren were excluded as beneficiaries during the lifetime of the widow. The Court’s judgement was critical of the widow, the father, the trustee and the protector and the trustee, protector and widow sought the anonymisation and redaction of the judgement.

It should be noted that although the application to set aside the instrument was brought under Article 51 of the Trusts (Jersey) Law 1984 (as amended), these were hostile proceedings to be heard in open court.

The Law

The leading Jersey authority on anonymity remains JEP-v-Al Thani [2002] JLR 542 but the principles to be applied in trust cases was summarised by the Court In the matter of the representation of the Sanne Trust Company Limited whereby the following was held:

  1. justice must be done in public
  2. in Jersey considerable importance is attached to the confidentiality of private trusts and hence administrative applications under Article 51 of the Trusts Law are customarily heard in private;
  3. An application for rectification is not an administrative matter of that kind because (i) there is no public interest is sparing the blushes of professional advisers who have made mistakes; (ii) it can be said that there is public interest in ensuring that such mistakes are put into the public domain so clients can be made aware of them; and (iii) exercise of the court’s discretion may affect others, particularly tax authorities.
  4. Public justice verses confidentiality can be achieved by sitting in public and redacting the Court’s judgement so names are not visible, but this does not apply to mistakes by professional advisers unless it would reveal the public exposure of private family arrangements which would have otherwise remained entirely private.

The Decision

The Royal Court held as follows:

Public Interest: Just as mistakes by professional advisers in rectification cases were of public interest, so is the conduct of trustees and protectors carrying on trust company business in the Island.

Anonymisation and Redaction: It was inevitable that confidential trust information was now in the public domain as it constituted a major part of the evidence upon which the Court based its findings and to redact such information would leave the decision of the Court bereft of meaning.

Affected Third Parties: The Royal Court rejected taking steps to avoid the Family Division of the High Court of England and Wales being aware of the judgement’s terms; the Family Division of the High Court should make a decision based upon the true financial position of the parties and there is a duty upon the trustee to make sure the fullest information is available to the parties, and through them, to the High Court (In the matter of H Trust [2006] JLR 280).

Consequently the Royal Court ordered the publication of the judgement in full, but redacted certain information to the extent necessary to protect the minor grandchildren from being identified and to protect the privacy of family members.

Comment

It should not come as a surprise to any Jersey trustee that if the Royal Court criticises certain actions, that such criticism may become public knowledge. However, the Royal Court has now confirmed that criticism of professional advisers, trustees, protectors and perhaps others will now be made public and the only redaction permissible will be to protect certain family members.

Follow this link for the full judgement http://www.jerseylaw.je/Judgments/ UnreportedJudgments/Documents/Display. aspx?url=2012/12-05-14_The_C_Trust_098. htm