Jersey Unreported Judgments

[2006]JRC154

royal court

(Samedi Division)

26^th October 2006 

Before     :

Sir Philip Bailhache, Kt., Bailiff, and Jurats King and Newcombe.

 

Application to reverse the Order of the Master of the Royal Court of 3^rd October, 2006.

And an application for costs.

Advocate C. G. P. Lakeman for the Plaintiff.

Advocate L. J. Buckley for the Third Defendant.

First and Second Defendants not represented.

judgment

the bailiff:

1.        This is an appeal by C.I. Law Trustees Limited to which we shall refer as the "third defendant", against a decision of the Master of 3^rd October, 2006, dismissing their application to strike out the Plaintiff's claim against them.  The hour is late and we shall give the reasons for our decision only briefly.

2.        The facts underlying this appeal are a long standing dispute between two brothers, the plaintiff and the first defendant.  The dispute concerns a settlement called the "A Cunningham No 2 Settlement" which was established by the third defendant on 27^th September, 1991.  In accordance with the terms of the Settlement, the first defendant was declared to be the Settlor of the Trust and was also appointed as the Protector of the Settlement.  The beneficiaries of the Settlement included the plaintiff and the first defendant. 

3.        On 1^st September, 2003, an instrument of retirement and appointment of trustees was executed by the first, second and third defendants.  By this deed the first defendant in his capacity as protector of the settlement removed the third defendant from the office of trustee and appointed the second defendant in its stead.

4.        Sometime after the execution of this deed on 1^st September 2003, the second defendant, with the concurrence of the first defendant in his capacity of protector, removed the plaintiff from the class of beneficiaries.  The precise date of the removal of the plaintiff from the class of beneficiaries is unknown, but it must have been in September or October 2003 and, therefore, very shortly after the change of trustee.

5.        The Order of Justice brought by the plaintiff alleges that the third defendant was in breach of its fiduciary duties and/or its duties as trustee.  The particulars of those alleged breaches to which we shall refer in a moment, led the third defendant to make an application to the Master to strike out the action in so far as the third defendant was concerned.

6.        The Master heard argument and dismissed the application, holding that there were sufficient matters raised in the Order of Justice to justify a full trial before the Royal Court.  He decided that it was not a plain and obvious case which justified his striking out of the Order of Justice in relation to the third defendant. 

7.        Both Mr Buckley for the third defendant and Mr Lakeman for the plaintiff are agreed that the Master applied the appropriate legal test.  For the avoidance of doubt that legal test is conveniently summarised in the head note to the report of the judgment of the court in Re The Esteem Settlement [2000] JLR 119 in the following terms:

"It was only where it was plain and obvious that the claim could not succeed that recourse would be had to the court's summary jurisdiction to strike out and it was therefore not the court's duty to decide whether it found in favour of the plaintiff but rather whether it was certain that its claims would fail.  Provided that a statement of claim or particulars disclosed some cause of action or raised some question fit to be decided by a judge or jury, the mere fact that a case was weak was not a ground for striking it out."

8.        Counsel for the Third Defendant drew our attention to passages in the plaintiff's skeleton argument which counsel submitted suggested that there was some sort of scheme alleged against the first defendant and the third defendant in relation to the change of trustee.  Counsel for the plaintiff denied that any such scheme was alleged against the third defendant.  He contended that it was a scheme on the part of the first defendant which was alleged.

9.        We think that, irrespective of whether or not there is an alleged scheme involving the first and third defendants, the particulars included in the order of justice are a little thin.  Paragraph 129  of the Order of Justice sets out the particulars of breach of fiduciary duty in the following terms:

"The Third Defendant's failure to inform the plaintiff that the First Defendant proposed to exercise or had purported to exercise his power as Protector of the Trust and its unquestioning compliance with the First Defendant's directions to it in the particular circumstances of the Plaintiff's and First Defendant's relationship and the dispute between them constituted a failure

(i)          to act with due diligence;

(ii)         to act as would a prudent person;

(iii)           to act to the best of the Third Defendant's ability and skill;

(iv)           to observe the utmost good faith; and

(v)            so far as reasonable to preserve the value of the Trust's assets and/or property."

10.      The particulars do, nonetheless, make it clear that the alleged breaches of fiduciary duty involved:-

(i)        a failure to inform the Plaintiff of the Third Defendant's removal or proposed removal as Trustee; and

(ii)       the Third Defendant's unquestioning compliance in its removal from office. 

11.      In the context of the dispute between the two brothers it is said that this was a breach of the third defendant's obligations as a trustee.  We think that such deficiency of detail as does exist as to particulars of the alleged breach can be cured by a request for further and better particulars.  We think, therefore, that the Master arrived at the correct conclusion in relation to the application to strike out and the appeal of the third defendant is accordingly dismissed.

12.      Leave to appeal is refused and that must be pursued before a single judge of the Court of Appeal if thought fit.

Authorities

Re The Esteem Settlement [2000] JLR 119.