Trilogy Management v YT and Others [2012] JRC 093 (10 May 2012)

Trilogy Management v YT and Others [2012] JRC 093 (10 May 2012)

'Profit' in Article 96 means profit ascertained according to the generally accepted accounting principle adopted by the company in its accounts for the relevant year. The revaluation profit of $225.8m, first recognised in the 2005 IFRS accounts, is a profit of 2005 for Article 96 purposes and must be distributed accordingly. Article 96 applies to the 2003 accounts because the accounts and dividend were approved after the Article's amendment. The PTP dividend of $80m declared in 2004 can be counted towards the 75% distribution requirement for that year.

Citation
[2012] JRC 093
Parties
Applicant: Trilogy; Respondent: YT; Respondent: Mrs C
Jurisdiction
Jersey
Judgment Date
10 May 2012
Procedural Posture
Civil (charity/trust/company Law) / Judgment After Trial
Outcome
Claims of Trilogy substantially upheld.
Legal Topics
Dividends, Articles of Association, Accounting Standards, Charitable Trusts, Interpretation of Company Articles
Company Law Trusts and Estates Charity Law Dividends Articles of Association Accounting Standards Charitable Trusts Interpretation of Company Articles

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Parties

Trilogy

Applicant

YT

Respondent

Mrs C

Respondent

Procedural Posture

Civil (charity/trust/company Law) / Judgment After Trial

Legal Issues

  1. 1 How should 'profits of the year' be determined for the purposes of Article 96 of JY's Articles of Association?
  2. 2 Does Article 96 (as amended) apply to the 2003 accounts?
  3. 3 Can the $80 million 'priming the pump' (PTP) dividend declared in 2004 be counted towards the 75% minimum dividend required for that year?

Ratio Decidendi

'Profit' in Article 96 means profit ascertained according to the generally accepted accounting principle adopted by the company in its accounts for the relevant year. The revaluation profit of $225.8m, first recognised in the 2005 IFRS accounts, is a profit of 2005 for Article 96 purposes and must be distributed accordingly. Article 96 applies to the 2003 accounts because the accounts and dividend were approved after the Article's amendment. The PTP dividend of $80m declared in 2004 can be counted towards the 75% distribution requirement for that year.

Court Disposition

Claims of Trilogy substantially upheld.

Orders

  • JY must treat the revaluation profit of $225,812,689 as a profit of 2005 for Article 96 and distribute 75% accordingly.
  • Article 96 applies to the 2003 accounts; 75% of the 2003 profit as per the accounts must be distributed.