Lloyds Trust Co (CI) Ltd -v- Fragoso, Hoy, Government of Mozambique and HM Attorney General [2013] JRC 211 (31 October 2013)

Lloyds Trust Co (CI) Ltd -v- Fragoso, Hoy, Government of Mozambique and HM Attorney General [2013] JRC 211 (31 October 2013)

On the balance of probabilities, all funds in the Rex Trust represent bribes received by Mr Fragoso in breach of his fiduciary duty as a public officer of Mozambique. Applying the Privy Council decision in Attorney General for Hong Kong v Reid, the trust fund is held on constructive trust for the Government of Mozambique. The Jersey Court prefers the reasoning in Reid over Sinclair Investments, prioritizing deterrence of corruption and the stripping of illicit gains from fiduciaries.

Citation
[2013] JRC 211
Parties
Representor: Lloyds TSB Offshore Trust Limited (now known as Lloyds TSB); First Respondent / Settlor: Carlos Fragoso; Second Respondent / Beneficiary: Mrs Fragoso; Third Respondent / Beneficiary: Child 1 (unnamed); Fourth Respondent / Beneficiary: Child 2 (unnamed); Fifth Respondent / Beneficiary (minor): Raquel Fragoso; Representative of Minor, Unborn and Unascertained Beneficiaries: Mr Hoy; Applicant/interested Party: Government of Mozambique
Jurisdiction
Jersey
Judgment Date
31 October 2013
Procedural Posture
Trust Law / Proceeds of Crime / Constructive Trust Application / Final Judgment
Outcome
Trust fund declared held on constructive trust for the Government of Mozambique.
Legal Topics
Constructive Trusts, Proceeds of Crime, Bribery, Fiduciary Duty, Tracing, Beneficial Entitlement, Jurisdictional Precedent
Trust Law Equity Criminal Law International Law Constructive Trusts Proceeds of Crime Bribery Fiduciary Duty +3 more

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Parties

Lloyds TSB Offshore Trust Limited (now known as Lloyds TSB)

Representor

Carlos Fragoso

First Respondent / Settlor

Mrs Fragoso

Second Respondent / Beneficiary

Child 1 (unnamed)

Third Respondent / Beneficiary

Child 2 (unnamed)

Fourth Respondent / Beneficiary

Raquel Fragoso

Fifth Respondent / Beneficiary (minor)

Mr Hoy

Representative of Minor, Unborn and Unascertained Beneficiaries

Government of Mozambique

Applicant/interested Party

Procedural Posture

Trust Law / Proceeds of Crime / Constructive Trust Application / Final Judgment

Legal Issues

  1. 1 Whether the assets in the Rex Trust are proceeds of crime (bribes) received by Mr Fragoso.
  2. 2 Whether the trust fund should be held on constructive trust for the Government of Mozambique.
  3. 3 Whether Jersey law should follow the Privy Council decision in Attorney General for Hong Kong v Reid or the English Court of Appeal decision in Sinclair Investments.

Ratio Decidendi

On the balance of probabilities, all funds in the Rex Trust represent bribes received by Mr Fragoso in breach of his fiduciary duty as a public officer of Mozambique. Applying the Privy Council decision in Attorney General for Hong Kong v Reid, the trust fund is held on constructive trust for the Government of Mozambique. The Jersey Court prefers the reasoning in Reid over Sinclair Investments, prioritizing deterrence of corruption and the stripping of illicit gains from fiduciaries.

Court Disposition

Trust fund declared held on constructive trust for the Government of Mozambique.

Orders

  • Lloyds TSB to pay the trust fund, net of costs, to the Government of Mozambique.