Representation of A Trustees Limited re the ABC Trust [2024] JRC 221 (22 October 2024)

Representation of A Trustees Limited re the ABC Trust [2024] JRC 221 (22 October 2024)

The court blessed the trustee's decision to settle the litigation and to pay D's legal fees, but only by way of a loan (not a distribution), as a reasonable trustee would have considered the possibility of a loan to protect the interests of all beneficiaries. The court found the trustee's decision was formed in good faith, was reasonable, and not vitiated by conflict, but the mechanism for payment required adjustment.

Citation
[2024] JRC 221
Parties
Representor/trustee: A Trustees Limited; Beneficiary: D; Settlor: E; Guardian Ad Litem/representative for Unborn and Remoter Issue: Advocate Cushing
Jurisdiction
Jersey
Judgment Date
22 October 2024
Procedural Posture
Representation (trusts) / Application for Court Blessing of Trustee's Momentous Decision
Outcome
Application granted in part
Legal Topics
Court Blessing of Trustee Decisions, Conflict of Interest in Trusts, Settlement of Trust Litigation, Loans Vs Distributions From Trusts
Trusts Equity Court Blessing of Trustee Decisions Conflict of Interest in Trusts Settlement of Trust Litigation Loans Vs Distributions From Trusts

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Parties

A Trustees Limited

Representor/trustee

D

Beneficiary

E

Settlor

Advocate Cushing

Guardian Ad Litem/representative for Unborn and Remoter Issue

Procedural Posture

Representation (trusts) / Application for Court Blessing of Trustee's Momentous Decision

Legal Issues

  1. 1 Whether the trustee's decision to settle litigation and pay legal fees should be blessed by the court
  2. 2 Whether payment of a beneficiary's legal fees should be by loan or distribution
  3. 3 Whether a conflict of interest disables the trustee's discretion

Ratio Decidendi

The court blessed the trustee's decision to settle the litigation and to pay D's legal fees, but only by way of a loan (not a distribution), as a reasonable trustee would have considered the possibility of a loan to protect the interests of all beneficiaries. The court found the trustee's decision was formed in good faith, was reasonable, and not vitiated by conflict, but the mechanism for payment required adjustment.

Court Disposition

Application granted in part

Orders

  • Trustee's decision to settle litigation blessed
  • Trustee authorised to pay D's legal fees by way of a loan, not a distribution