Guernsey Law Reports 2007–08 GLR Note 8
IN THE MATTER OF THE A AND MC TRUST
ROYAL COURT (Collas, Deputy Bailiff): May 25th, 2007
Conflict of Laws—jurisdiction—forum conveniens
The settlor, an Italian businessman, set up a trust to hold virtually all his company’s assets, of which the principal beneficiary was his son (A). His daughter (MC) and his widow were originally excluded as beneficiaries but before his death he expressed the wish that MC and his grandchildren (AA) should be given interests in the shares of the company, to the extent of 17% each (MC alone and AA jointly). His widow succeeded to the residue of his estate. A and MC agreed to purchase the widow’s interest in the estate and, having received the promised 17% of the shares in the company, AA agreed to sell them indirectly to A and MC. A set up the A & MC Trust to hold all the company’s assets, which were effectively taken over from the earlier trust together with additional assets, and in due course the first respondent became the trustee. The trust was by its terms subject to the exclusive jurisdiction of the Guernsey courts, its proper law was stated to be Guernsey law and the trustee was a Guernsey trust company.
Acting under express powers conferred by the trust, A appointed MC to be the beneficiary of 17% of the income of the shares in the company and of a monetary claim against two other companies in the group. They then disagreed over certain matters and MC commenced the present proceedings in Guernsey claiming inter alia (a) that her appointment as a beneficiary was valid; (b) that the trustee was obliged to ensure that she received her proper share of the dividend income from the company; (c) part of the interest of the widow in the shares of the company purchased from her; (d) an interest in the shares purchased from AA; and (e) similar interests in other companies created to hold part of the real estate belonging to the company.
A then commenced proceedings against MC in Italy, claiming (a) the reimbursement of MC’s share of the purchase price of the widow’s interest, which he had paid on her behalf and not previously been reimbursed; (b) the recovery from MC of half the sum he had paid to settle a dispute with AA on behalf of the estate; and (c) the recovery from MC of the value of the monetary claims in the subsidiary companies he had appointed to her, on the ground that the formalities of the gift did not comply with Italian law and it was therefore null and void.
A submitted that MC’s proceedings against him in Guernsey should be stayed pending the outcome of the Italian proceedings. MC opposed the stay and proposed the stay of the Italian proceedings pending the outcome of the Guernsey proceedings, when it would be known whether some of the issues which would arise in Italy had been disposed of. The trustee wished to see MC’s claims resolved without delay, emphasizing the practical difficulties it faced in administering the trust whilst several important issues remained unresolved.
Held: (1) The Guernsey proceedings would not be stayed. A stay would only be granted on the ground of forum non conveniens if the court were satisfied that another available forum of competent jurisdiction was the appropriate forum for the trial of the action, i.e. in which it could be tried more suitably in the interests of all the parties and the ends of justice (Spiliada Maritime Corp. v. Cansulex Ltd., [1987] A.C. 460, dicta of Lord Goff of Chieveley applied).
(2) Four factors made it more suitable for the proceedings to continue in Guernsey without further delay: (a) Italian law and Italian lawyers were not essential to the decision of the trusts issues, as the trust was governed by Guernsey law, and the appointment to MC (having been made under powers conferred by the trust) was governed by Guernsey law—even if its form were governed by Italian law, expert evidence could easily be adduced; (b) the need for evidence to be given in Italian was minimal, as there were few factual issues to be decided; (c) the resolution of the Guernsey suit would be infinitely quicker than that of the Italian suit, the expert evidence suggesting that in Italy (specifically Perugia) a first instance decision might at best be given in two years, with two to three further years for a decision on appeal, if needed, and three to four more years for the decision of any further appeal; and (d) the interests of all the parties included those of the trustee, which needed an early decision on MC’s action to be able to proceed with the efficient administration of the trust; it was administering a trust governed by Guernsey law and if any future guidance were needed, it would be easier for it to obtain it from the Royal Court.
(3) The proceedings on the trusts issues would therefore continue without stay and all the relevant issues would be heard together. They would be severed from the issues raised by A in the Italian proceedings, over which the court was satisfied that it had no jurisdiction.
2009
Law Report
None
Guernsey Law Reports 2007–08 GLR Note 8