Representation of the Z Trusts [2015] JRC 031 (12 February 2015)

Representation of the Z Trusts [2015] JRC 031 (12 February 2015)

Equity Trust (Jersey) Limited, as former trustee, retains an equitable right (lien) over the assets of the Z II and Z III Trusts for liabilities reasonably incurred during its trusteeship. This right must be acknowledged and preserved in any change of trusteeship, and Volaw and Barclays will discharge their...

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Citation
[2015] JRC 031
Parties
Applicant: Mrs C; Respondent: Equity Trust (Jersey) Limited; Interested Party: Volaw Trustee Limited; Interested Party: Barclays Private Bank and Trust Limited; Proposed Trustee: Rawlinson & Hunter Trustees SA
Jurisdiction
Jersey
Judgment Date
12 February 2015
Procedural Posture
Trust Administration Application / Interlocutory Hearing
Outcome
Partial declaration; appointment of new trustee permitted subject to indemnity preservation.
Legal Topics
Trustee Indemnity, Equitable Lien, Appointment of Trustees, Priority of Claims, Ring Fencing of Assets
Trusts Equity Private International Law Trustee Indemnity Equitable Lien Appointment of Trustees Priority of Claims Ring Fencing of Assets

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Parties

Mrs C

Applicant

Equity Trust (Jersey) Limited

Respondent

Volaw Trustee Limited

Interested Party

Barclays Private Bank and Trust Limited

Interested Party

Rawlinson & Hunter Trustees SA

Proposed Trustee

Procedural Posture

Trust Administration Application / Interlocutory Hearing

Legal Issues

  1. 1 Whether Equity Trust (Jersey) Limited, as former trustee, retains an equitable lien over trust assets.
  2. 2 Whether appointment of a non-resident trustee jeopardises enforcement of indemnity rights.
  3. 3 Whether ring-fencing of assets is possible or required to secure former trustee's claims.

Ratio Decidendi

Equity Trust (Jersey) Limited, as former trustee, retains an equitable right (lien) over the assets of the Z II and Z III Trusts for liabilities reasonably incurred during its trusteeship. This right must be acknowledged and preserved in any change of trusteeship, and Volaw and Barclays will discharge their obligations under the indemnity clauses if R&H provides equivalent indemnities to Equity. The Court will not compel Equity to enter into contractual documents but will facilitate trustee appointment provided indemnities are preserved.

Court Disposition

Partial declaration; appointment of new trustee permitted subject to indemnity preservation.

Orders

  • Declaration that Volaw and Barclays discharge obligations under indemnity clauses if R&H provides equivalent indemnities to Equity.
  • Appointment of R&H as trustee of Z Trust and Z IV, V, VI, VII, VIII Trusts permitted subject to indemnity.