Gestrust SA v Sixteen Defendants [2016] EWHC 3067 (Ch) (29 November 2016)

Gestrust SA v Sixteen Defendants [2016] EWHC 3067 (Ch) (29 November 2016)

The property portfolio held by A Limited and B Limited is not an asset of the Trust; the structure must be respected. The Trustee's duty is to act in accordance with Bartlett, instructing directors as shareholder to act in the best interests of the Trust, but only within the bounds of the law of Guernsey and the British Virgin Islands. Costs and liabilities arising from C Limited's claims are liabilities of A Limited and B Limited, not the Trust. Mediation is appropriate and the Trustee should intervene to ensure participation. Apportionment of costs between capital and income is not directly relevant as the Trust's assets are its shareholdings and dividend income.

Citation
[2016] EWHC 3067 (Ch)
Parties
Claimant: GESTRUST SA; Defendant: First Defendant; Defendant: Second Defendant; Defendant: Sixth Defendant; Defendant: Seventh Defendant; Defendant: Eighth Defendant; Defendants: Three minor Defendants and one minor who has now attained majority and unborns
Jurisdiction
England and Wales
Judgment Date
29 November 2016
Procedural Posture
Part 8 Claim for Directions (trustee Application) / Judgment on Directions Hearing
Outcome
Directions given to Trustee; property portfolio not treated as trust asset; mediation ordered; confidential judgment to address settlement parameters.
Legal Topics
Trustee Duties, Corporate Structure, Beddoe Applications, Capital Vs Income Apportionment, Piercing Corporate Veil, Mediation, Beneficiary Representation
Trusts Chancery Company Law Trustee Duties Corporate Structure Beddoe Applications Capital Vs Income Apportionment Piercing Corporate Veil +2 more

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Parties

GESTRUST SA

Claimant

First Defendant

Defendant

Second Defendant

Defendant

Sixth Defendant

Defendant

Seventh Defendant

Defendant

Eighth Defendant

Defendant

Three minor Defendants and one minor who has now attained majority and unborns

Defendants

Procedural Posture

Part 8 Claim for Directions (trustee Application) / Judgment on Directions Hearing

Legal Issues

  1. 1 Should the property portfolio held by A Limited and B Limited be treated as assets of the Trust for the purposes of directions?
  2. 2 What instructions should the Trustee give to the directors of A Limited and B Limited regarding C Limited's claims?
  3. 3 How should costs and liabilities arising from C Limited's claims be apportioned between capital and income?

Ratio Decidendi

The property portfolio held by A Limited and B Limited is not an asset of the Trust; the structure must be respected. The Trustee's duty is to act in accordance with Bartlett, instructing directors as shareholder to act in the best interests of the Trust, but only within the bounds of the law of Guernsey and the British Virgin Islands. Costs and liabilities arising from C Limited's claims are liabilities of A Limited and B Limited, not the Trust. Mediation is appropriate and the Trustee should intervene to ensure participation. Apportionment of costs between capital and income is not directly relevant as the Trust's assets are its shareholdings and dividend income.

Court Disposition

Directions given to Trustee; property portfolio not treated as trust asset; mediation ordered; confidential judgment to address settlement parameters.

Orders

  • Order under CPR 5.4C(4) prohibiting non-parties from obtaining confidential documents except this judgment.
  • Order under CPR 5.4B(1) prohibiting parties from obtaining certain confidential documents without leave of court.