Kea Investments Limited v Watson and Ors -19-Jan-2021 [2021] JRC 009 (19 January 2021)

Kea Investments Limited v Watson and Ors -19-Jan-2021 [2021] JRC 009 (19 January 2021)

Mr Watson's interests as a discretionary beneficiary under the trusts constitute movable property under Article 10(10) of the Trusts (Jersey) Law 1984, but such interests are not assignable or transmissible under the terms of the trust deeds or by their inherent nature. The rights attach to the person of the discretionary beneficiary and cannot be exercised independently or for the benefit of a non-object. Confirmation of the arrêt over Mr Watson's interests is refused. Arrêt entre mains over the loans is confirmed as uncontested.

Citation
[2021] JRC 009
Parties
Plaintiff: Kea; First Defendant: Mr Watson; Second Defendant: Mr Gibson; Trustee: VG Trustee Limited; Fourth Defendant: Chanin Holdings Limited; Interveners: Interveners (Mr Watson's children)
Jurisdiction
Jersey
Judgment Date
19 January 2021
Procedural Posture
Application for Confirmation of Arrêt and Arrêt Entre Mains / Judgment
Outcome
Arrêt over Mr Watson's discretionary beneficiary interests refused; arrêt entre mains over loans confirmed.
Legal Topics
Discretionary Beneficiary Rights, Movable Property, Assignment of Trust Interests, Fraud on the Power, Arrêt, Arrêt Entre Mains, Trust Enforcement
Trusts Insolvency Asset Recovery Property Law Discretionary Beneficiary Rights Movable Property Assignment of Trust Interests Fraud on the Power +3 more

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Parties

Kea

Plaintiff

Mr Watson

First Defendant

Mr Gibson

Second Defendant

VG Trustee Limited

Trustee

Chanin Holdings Limited

Fourth Defendant

Interveners (Mr Watson's children)

Interveners

Procedural Posture

Application for Confirmation of Arrêt and Arrêt Entre Mains / Judgment

Legal Issues

  1. 1 Are the rights of a discretionary beneficiary under Jersey trusts transmissible or assignable by distraint or otherwise?
  2. 2 Can a creditor (Kea) enforce an arrêt over such rights to satisfy a judgment debt?
  3. 3 Are loans made by Mr Watson to the trustee and Chanin Holdings subject to arrêt entre mains?

Ratio Decidendi

Mr Watson's interests as a discretionary beneficiary under the trusts constitute movable property under Article 10(10) of the Trusts (Jersey) Law 1984, but such interests are not assignable or transmissible under the terms of the trust deeds or by their inherent nature. The rights attach to the person of the discretionary beneficiary and cannot be exercised independently or for the benefit of a non-object. Confirmation of the arrêt over Mr Watson's interests is refused. Arrêt entre mains over the loans is confirmed as uncontested.

Court Disposition

Arrêt over Mr Watson's discretionary beneficiary interests refused; arrêt entre mains over loans confirmed.

Orders

  • VG Trustee Limited and Chanin Holdings Limited to provide written confirmation of repayment dates and amounts outstanding on each loan.
  • VG and Chanin to acknowledge in open court that they will hold the loans for the benefit of Kea for recovery without intervention of the Viscount.