Trilogy Management v YT and Others [2012] JCA 152 (22 August 2012)

Trilogy Management v YT and Others [2012] JCA 152 (22 August 2012)

'Profits of that year' in Article 96 means the profits for the year as ascertained by the generally accepted accounting principle applied by the company in the preparation of its accounts for that year. For 2005, under IFRS, JY made a loss of $2.1m, and the $225.8m revaluation profit, though recognised in 2005, was not a profit of that year. Therefore, no mandatory dividend was required for 2005 under Article 96.

Citation
[2012] JCA 152
Parties
Representor: Trilogy Management Limited; First Respondent: YT Charitable Foundation (International) Limited; Second Respondent: HM Attorney General; Third Respondent: OM - LC Charitable Foundation International; Fourth Respondent: The Empowerment Charitable Trust; Fifth Respondent: The Saving Grace Charitable Trust; Sixth Respondent: OM - VC Charitable Foundation; Seventh Respondent: The Well Trust; Eighth Respondent: Mrs C
Jurisdiction
Jersey
Judgment Date
22 August 2012
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Interpretation of Articles of Association, Mandatory Dividend Provisions, Accounting Standards in Company Law, Charitable Trusts
Company Law Charity Law Interpretation of Articles of Association Mandatory Dividend Provisions Accounting Standards in Company Law Charitable Trusts

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Parties

Trilogy Management Limited

Representor

YT Charitable Foundation (International) Limited

First Respondent

HM Attorney General

Second Respondent

OM - LC Charitable Foundation International

Third Respondent

The Empowerment Charitable Trust

Fourth Respondent

The Saving Grace Charitable Trust

Fifth Respondent

OM - VC Charitable Foundation

Sixth Respondent

The Well Trust

Seventh Respondent

Mrs C

Eighth Respondent

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 What is the correct interpretation of 'profits of that year' in Article 96 of JY's Articles of Association for the purposes of mandatory dividend distribution for the year ending 31 December 2005?

Ratio Decidendi

'Profits of that year' in Article 96 means the profits for the year as ascertained by the generally accepted accounting principle applied by the company in the preparation of its accounts for that year. For 2005, under IFRS, JY made a loss of $2.1m, and the $225.8m revaluation profit, though recognised in 2005, was not a profit of that year. Therefore, no mandatory dividend was required for 2005 under Article 96.

Court Disposition

Appeal allowed

Orders

  • Declaration that for the year ending 31 December 2005 JY's profit was a loss of $2.1m or thereabouts and no mandatory dividend was due under Article 96.