Gestrust SA v Sixteen Defendants

Gestrust SA v Sixteen Defendants

The property portfolio held by A Limited and B Limited is not a trust asset; the Trust's assets are its shareholdings and dividend income. The trustee's duty is to act prudently regarding its shareholding, intervening only if directors' decisions threaten historical income to life tenants or cause unnecessary property sales. Costs of this action must be funded from the Trust's income stream. Privacy orders are justified to protect minors, but the judgment is anonymised and open.

Parties
Claimant: Gestrust SA; Defendant: First Defendant; Defendant: Second Defendant; Defendant: Third Defendant; Defendant: Fourth Defendant; Defendant: Fifth Defendant; Defendant: Sixth Defendant; Defendant: Seventh Defendant; Defendant: Eighth Defendant; Defendant: Ninth Defendant; Defendant: Tenth Defendant; Defendant: Eleventh Defendant; Defendant: Twelfth Defendant; Defendant: Thirteenth Defendant; Defendant: Fourteenth Defendant; Defendant: Fifteenth Defendant; Defendant: Sixteenth Defendant
Jurisdiction
England and Wales
Judgment Date
29 November 2016
Procedural Posture
Trust Directions Application / Judgment on Directions Hearing
Outcome
Directions given to trustee; property portfolio not treated as trust asset; privacy orders granted; judgment anonymised and open.
Legal Topics
Trustee Duties, Beddoe Applications, Capital and Income Apportionment, Corporate Structure, Privacy in Proceedings
Trusts Equity Company Law Trustee Duties Beddoe Applications Capital and Income Apportionment Corporate Structure Privacy in Proceedings

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 16 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Gestrust SA

Claimant

First Defendant

Defendant

Second Defendant

Defendant

Third Defendant

Defendant

Fourth Defendant

Defendant

Fifth Defendant

Defendant

Sixth Defendant

Defendant

Seventh Defendant

Defendant

Eighth Defendant

Defendant

Ninth Defendant

Defendant

Tenth Defendant

Defendant

Eleventh Defendant

Defendant

Twelfth Defendant

Defendant

Thirteenth Defendant

Defendant

Fourteenth Defendant

Defendant

Fifteenth Defendant

Defendant

Sixteenth Defendant

Defendant

Procedural Posture

Trust Directions Application / Judgment on Directions Hearing

Legal Issues

  1. 1 Should the property portfolio held by A Limited and B Limited be treated as a trust asset?
  2. 2 What are the trustee's duties regarding litigation involving trust-owned companies?
  3. 3 How should costs and liabilities arising from litigation be apportioned between capital and income?

Ratio Decidendi

The property portfolio held by A Limited and B Limited is not a trust asset; the Trust's assets are its shareholdings and dividend income. The trustee's duty is to act prudently regarding its shareholding, intervening only if directors' decisions threaten historical income to life tenants or cause unnecessary property sales. Costs of this action must be funded from the Trust's income stream. Privacy orders are justified to protect minors, but the judgment is anonymised and open.

Court Disposition

Directions given to trustee; property portfolio not treated as trust asset; privacy orders granted; judgment anonymised and open.

Orders

  • Trustee to act in accordance with Bartlett duties, instructing directors of A Limited and B Limited as appropriate, provided actions are lawful under Guernsey and BVI law.
  • Trustee not required to intervene unless directors' decisions threaten historical income to life tenants or cause unnecessary property sales.