Jersey Unreported Judgments

Trust - application for an order to stay proceedings.

[2013]JRC194A

Royal Court

(Samedi)

2 October 2013

Before     :

J. A. Clyde-Smith, Esq., Commissioner, and Jurats Fisher and Blampied.

 

Advocate A. D. Robinson for the Plaintiffs.

Advocate R. J. MacRae for the Defendants.

judgment

the commissioner:

1.        The defendants apply for an order staying these proceedings on the basis that Jersey is not the proper forum to determine the plaintiffs' claims. 

2.        The Court has set out the background to this matter in its judgment of the 15th May, [2013] JRC 090 in which gives its reasons for ordering the defendants, as an interim measure, to stay proceedings they had commenced in Mauritius, but for ease of reading we will set out the background again.  In doing so we rely on those facts as disclosed by the evidence before us which we understand to be non-contentious. 

3.        The case involves an unfortunate breakdown in family relationships between the first plaintiff ("Cristiana") on the one hand and her mother, the first defendant, Edoarda Crociani ("Mme Crociani") and her sister Camilla Crociani ("Camilla") on the other.  It is Cristiana's case (brought with her two minor children, acting through their guardian, her husband Nicolas Delrieu) that Mme Crociani, with the other defendants, has taken steps to cut her off financially from the substantial family wealth and to starve her of funds. 

4.        The defendants deny any such intention asserting that they have at all times acted properly, in the interests of the beneficiaries and on advice, with a view to the protection of the family wealth. 

5.        The case is concerned principally with the Grand Trust created by Mme Crociani on 24^th December, 1987, under the laws of The Bahamas.  The deed is not in the usual wide discretionary terms we are used to seeing.  The preamble to the deed is as follows:-

"The Settlor wishes to record that she intends by this Agreement to have set aside a separate trust for each of her children Camilla (aged sixteen (16) years as of the date of this Agreement) and Cristiana (aged fourteen (14) years as of the date of this Agreement).  The Trustees shall receive as the initial Trust Fund the Secured Term Note (the "Note") described in the annexed Schedule A.  The Trustees shall retain the Note until its maturity or until its prior redemption, without regard to rules concerning diversification of investments or theories or principles of investment for fiduciaries.  The Trustees shall collect the income from and proceeds of the Note when due, but shall not be required to institute litigation to enforce payment or to enforce any right which the Trustees may have as owner of the Note.  The Trustees shall divide the property described in the annexed Schedule A into two (2) substantially equal (as to value) separate trusts, one of which shall be identified by the name of CAMILLA and one of which shall be identified by the name of CRISTIANA.  Each such separate trust shall be disposed of as hereafter directed in this Agreement."

6.        The Note settled into the Grand Trust was issued to Mme Crociani by Croci International BV, under which it promises to pay 75 billion lira in full together with accrued interest on the 30^th anniversary of the date of its issue.  It still remains an asset of the Grand Trust and is due to be redeemed in 2017.  The defendants say that further substantial sums were settled upon the Grand Trust by Mme Crociani. 

7.        Under the principal trust provisions of the Grand Trust, the trustees have the power in respect of each fund that bears the name of Camilla and Cristiana to pay income to each of Camilla and Cristiana respectively during their lifetimes, together with a company which the defendants say is beneficially owned by Mme Crociani and known as Camillo Crociani Foundation Limited ("the Foundation"), and to pay capital to each daughter respectively during their lifetimes, with the remaining capital passing as they may appoint or failing appointment to their children on their respective deaths.  In the event of both daughters dying without leaving living issue Mme Crociani is the default beneficiary and failing her the Foundation. 

8.        Under Clause Eleventh (A) the trustees have the overriding power to transfer the whole or any part of the trust fund to other trusts:-

"Notwithstanding any of the trusts, powers and provisions herein contained the trustees shall have power at any time or time before the Distribution Date at the absolute discretion of the trustees to raise and pay or transfer the whole or any part of the Trust Fund freed and discharged from the trusts and powers and provisions of this instrument to the trustees of any other trust not infringing the rule against perpetuities applicable to these trusts and approved by the trustees and in favor or for the benefit of all or any one or more exclusively of the others or other of the beneficiaries (other than the settlor) and whether or not the trustee or trustees of such other trust is or are resident within the jurisdiction applicable at the time to that trust and thereupon the property so paid or transferred shall be subject to the trusts, powers and provisions of the other trust and be governed by the proper law of that other trust whether or not such proper law is the proper law of this Agreement".

9.        Under Clause Twelfth, the trustees have the power to appoint new trustees outside the jurisdiction and to declare that the trusts shall be read and take effect according to the laws of the country of the residence or incorporation of the new trustees.  It is this clause which stands to be construed for the purposes of this application:-

"Notwithstanding any of the trusts, powers and provisions herein contained the trustees shall have power at any time or times and from time to time before the Distribution Date and without infringing the rule against perpetuities at the absolute discretion of the trustees by any irrevocable deed or deeds to resign as trustees and to appoint a new trustee or new trustees outside the jurisdiction at that time applicable to the trusts hereunder as trustees hereof and to declare that the trusts hereof shall be read and take effect according to the laws of the country of the residence or incorporation of such new trustee or trustees and upon such appointment being made the then trustee or trustees shall immediately stand possessed of the Trust Fund upon trust for the new trustee or trustees as soon as possible so that the Trust Fund shall continue to be held upon the trusts hereof but subject to and governed by the law of the country of residence or incorporation of such new trustee or trustees and thereafter the rights of all persons and the construction and effect of each and every provision hereof shall be subject to the exclusive jurisdiction of and construed only according to the law of the said country which shall become the forum for the administration of the trusts hereunder (but so that nonetheless the then trustee or trustees or the new trustee or trustees may by deed declare that the trusts hereof shall continue to be read and take effect according to the laws of the said Commonwealth of The Bahamas as provided by Clause FIFTEENTH hereof) and Clause FIFTEENTH hereof shall take effect and be subject to the provisions hereinbefore declared by this Clause."

10.      The plaintiffs assert that the Grand Trust was not created with the purpose or intention of providing any benefit to Mme Crociani.  They say she was not able to benefit otherwise than as a default beneficiary if her line of descendants through Camilla and Cristiana was extinguished.  Mme Crociani asserts that it was always her intention to be able to benefit from the assets which she settled in to Grand Trust, assets which she had created. 

11.      When the Grand Trust was established the first trustees comprised two lay trustees, namely Mme Crociani and Girolamo Cartia, and a professional trust company, Bankamerica Trust and Banking Corporation (Bahamas) Limited.  Under Clause Fifteenth it was expressed as being governed by the law of the Commonwealth of The Bahamas which was the forum for the administration.  There have been a number of changes in the proper law of the Grand Trust following the appointment of a new professional trustee; thus on the 27^th January, 1992, Chase Bank & Trust Company (C.I.) Limited was appointed as the professional trustee and the proper law changed to that of Jersey, on the 9^th April, 1999, Banque Paribas International Trustee (Guernsey) Limited was appointed as the professional trustee and the proper law changed to that of Guernsey and on the 2^nd October, 2007, the third defendant BNP Paribas Jersey Trust Corporation Limited (BNP Jersey) was appointed as the professional trustee and the proper law was changed back to that of Jersey. 

12.      Apart from a short period, the professional trustee has acted throughout with two lay trustees, one being Mme Crociani and the other, from the 9^th April, 1999, being the second defendant Mr Paul Foortse.  A final change in the proper law took place on the 10^th February, 2012, and we refer to that below, as that is one of the acts challenged by the plaintiffs. 

13.      In their Order of Justice, and insofar as it relates to the Grand Trust, the plaintiffs seek the following relief which we set out in summary form only:-

(i)        Equitable compensation for a number of distributions made out of the Grand Trust between December 2007 and March 2011 totalling €6,630,011.96 and US$1,235,000 which it is alleged that the trustees knew and intended would be re-directed to Mme Crociani and as such amounted to a fraud on a power. 

(ii)       The setting aside of an appointment made on the 9^th February, 2010, whereby what are believed to be substantial assets (thought by the plaintiffs to amount to US$100,000,000) were appointed out of the Grand Trust to a Jersey settlement known as the Fortunate Trust, of which BNP Jersey and Mme Crociani were the trustees.  We refer to this as "the 2010 Appointment".  Mme Crociani had a power of revocation over the Fortunate Trust which she subsequently exercised on the 30^th June, 2011, in her favour. 

(iii)      The setting aside of the deed dated 10^th February, 2012, whereby the Grand Trust trustees (comprising the first, second and third defendants) purported to retire as trustees in favour of the fourth defendant, Appleby Trust (Mauritius) Limited ("Appleby Mauritius") and to change the proper law to Mauritius.  We refer to this as "the 2012 Retirement". 

(iv)      The setting aside of an appointment dated 12^th August, 2012, by which property that was subject to the 2010 Appointment, to the extent that such appointment was invalid (and thus the property continued to vest in the Grand Trust), was appointed to a new settlement called the Agate Trust created by Mr Foortse and Appleby Mauritius under Jersey law, under the terms of which the trustees were to hold the trust fund and its income for the Foundation if Mme Crociani survived seven days, which she did. We refer to this as "the Agate Appointment".  

(v)       The appointment of new trustees in place of the existing trustees of the Grand Trust. 

(vi)      Such further orders, declarations, accounts and inquiries as may be necessary to reconstitute the trust fund of the Grand Trust and to place it under the control of such new trustees. 

14.      In their Order of Justice the plaintiffs also seek to set aside transfers made by Cristiana and Camilla in 2010 of shares in a BVI company, Crica Investments Limited, which owns two apartments in Miami, in favour of the Fortunate Trust ("the Crica claims").  We deal with this separately at the end of this judgment. 

15.      A letter before action dated 3^rd July, 2012, was sent by Bedell Cristin, acting for the plaintiffs, to Ogier, acting for the defendants, outlining the claims in so far as they related to the 2010 Appointment and the 2012 Retirement.  It was following that letter that the Agate Appointment was entered into.  Mourant Ozannes, who replaced Ogier, wrote a very detailed response by letter dated 17^th August, 2012, repudiating in robust terms the claims of the plaintiffs and informing them of the Agate Appointment.  No question was raised in that letter about the suitability of this Court as the forum for such claims.  Indeed, quoting from paragraph 36 of the letter:-

"36. All of the Grand Trustees, directors of corporate trustees, the individual professional and Madame Crociani herself, were of one mind and entirely comfortable with the decision reached.  They have made it clear that if litigation cannot be avoided, they are all willing and able to explain themselves to the Royal Court."

Furthermore, at paragraph 37 of the letter, Cristiana was warned that if she persisted with the claims, she would be subpoenaed by the defendants to attend before this Court to be cross-examined. 

16.      The Order of Justice was served upon BNP Jersey, which is of course incorporated in Jersey, on the 13th January, 2013.  No application was made to serve the proceedings on the other defendants out of the jurisdiction (Mme Crociani residing in Monaco, Mr Foortse in the Netherlands and Appleby Mauritius in Mauritius) because, by email dated 31^st January, 2013, Mourant Ozannes confirmed that they were instructed to accept service on their behalf, which they duly did.  The action was placed on the pending list by consent on 1^st February, 2013, as against BNP Jersey and on 8^th February, 2013, as against the remaining defendants. 

17.      By the same email, Mourant Ozannes sought an extension of time for the filing of an answer, in particular because the English counsel who had been assisting the defendants was unavailable for the whole of February 2013.  The plaintiffs agreed to an extension of time to 29^th March, 2013, and a consent order was issued to that effect on 4^th March, 2013. 

18.      On 1^st March, 2013, Carey Olsen gave Bedell Cristin notice that they had been instructed to act for the defendants in place of Mourant Ozannes. Carey Olsen issued a summons under Rule 6/7 of the Royal Court Rules 2004, disputing both the jurisdiction of the Court and the forum.  The summons was subsequently amended on 12^th April, 2013, by which amendment the defendants abandoned any challenge to the jurisdiction of the Court, but sought instead a stay of the proceedings on the grounds of forum non conveniens. 

19.      On 22^nd March, 2013, and without, it would seem, any notice to the plaintiffs, the defendants applied ex parte to the Supreme Court of Mauritius, on the basis that pursuant to the 2012 Retirement the Grand Trust was now governed exclusively by the laws of Mauritius, for declarations inter alia:-

(i)        That by the 2010 Appointment, the assets the subject of that appointment were validly and effectively transferred to the Fortunate Trust. 

(ii)       That by the 2012 Retirement, the fourth defendant had been appointed as sole trustee in the place of the former trustees, and that the Grand Trust had become subject to and governed by the laws of Mauritius. 

(iii)      In the event that the 2010 appointment had not been effective, that by the Agate Appointment all the assets specified in that appointment were validly and effectively transferred to the Agate Trust. 

20.      On the 10^th May, 2013, on the application of the plaintiffs, the court ordered the defendants, as an interim measure, to stay the proceedings that they had commenced in Mauritius pending the outcome of their application for the stay of the proceedings before this court. 

21.      The defendants' application for a stay was heard over the 28^th, 29^th and 30^th August, 2013.  The court received affidavits principally from Cristiana, Mme Crociani, Mr Miles Le Cornu of BNP Jersey, and from the parties' respective experts as to Mauritius law. 

22.      Those affidavits (other than from the experts) understandably go into the detail of the breakdown of relations within the family and their account of the impugned transactions, but without in any way being disrespectful to the parties and appreciating the depth of feeling this litigation has generated within the family, we think it wise for this court to avoid trying to summarise their respective positions; these will all be matters for the substantive hearing. 

23.      It was common ground between the parties that in its general approach to forum challenges this court applies the same principles as stated in the House of Lords decision of Spiliada Maritime Corporation-v-Cansulex Ltd [1987] 1 AC 460 (see Gheewala-v-Compendium Trust (PC) [2003] UKPC 77; [2003] All ER (D) 291 (Nov)).  We agree with Mr Robinson, for the plaintiffs, that the relevant principles can be summarised as follows:-

(i)        Where the defendants have been properly served within the jurisdiction as here (BNP Jersey being a Jersey resident, and the remaining defendants having agreed to accept service within the jurisdiction through Mourant Ozannes), the burden of proving that the proceedings here should be stayed is upon them. 

(ii)       They must show that Mauritius is a court of competent jurisdiction which is clearly or distinctly more appropriate than Jersey for the trial of the action. 

(iii)      In considering whether Mauritius is the clearly more appropriate forum, the Court will consider with which forum the issues in the action have the most real or substantial connection.  This will include factors such as the relevant law which governs the issues, where the causes of action arose, as well as the convenience of witnesses and the location of evidence. 

(iv)      If the defendants fail to show that Mauritius is a clearly more appropriate forum then a stay will ordinarily be refused.  If, on the other hand, they succeed in showing that Mauritius is a clearly more appropriate forum, then the burden falls on the plaintiffs to show that justice nevertheless requires that the proceedings continue before this Court. 

24.      Ultimately the question for the Court is whether the case should be tried "more suitably for the interests of all the parties and for the ends of justice" in Jersey rather than Mauritius; Leeds United FC-v-Weston and Levi [2012] JCA 083, quoting Sim-v-Robinow (1892) 19 R 665 and Spiliada. 

25.      Mr MacRae did not seek to argue that, absent the provisions of Clause Twelfth (which for convenience we will refer to as "the Exclusive Jurisdiction Clause"), Mauritius was clearly or distinctly a more appropriate forum than Jersey.  There can be no question in our view that the plaintiffs' claims have their closest and most real connection with Jersey, because the impugned transactions (arguably other than in respect of the Agate Appointment) all took place when the Grand Trust was administered from Jersey by a Jersey based professional trustee and when the Grand Trust was governed by Jersey law.  The defendants accepted that all of the impugned transactions (other than the Agate Appointment) were governed by Jersey law at the time they were entered into.  Furthermore the 2010 Appointment and the 2012 Retirement were made expressly subject to Jersey law and the defendants expressly submitted to the non-exclusive jurisdiction of the Courts of Jersey.  When we refer hereafter to "the impugned transactions" we are excluding the Agate Appointment. 

26.      We do not question the quality of the justice that can be obtained in Mauritius but it is the case that the legal issues here are complex and as a matter of general principle a court applies its own laws more reliably than does a foreign court (see Dicey, Morris & Collins:- the Conflict of Laws (15^th Edition), paragraph 12-034). 

27.      We do not think factors such as convenience and location of documents are of great significance.  With the administration of the Grand Trust having been carried on in Jersey and where the bulk of the documents will presumably be located, it is balanced in this respect towards Jersey, but these days documents can be copied electronically anywhere in the world.  Cristiana lives in the Dominican Republic and Mme Crociani and Camilla in Monaco.  Mr Foortse lives in the Netherlands.  Cristiana has concerns about travelling to Mauritius, but we think that the lay witnesses can attend here or in Mauritius without undue difficulty, just as trust officers from Jersey can travel to Mauritius and vice versa. 

28.      The plaintiffs argue that the Agate Appointment (which is silent as to its governing law) is subject to Jersey Law because inter alia the Agate Trust is itself governed by Jersey law.  The defendants say that the Agate Appointment is subject to Mauritius law, but either way when standing back and looking at the substance of what is alleged in the plaintiffs' order of justice, Jersey is clearly the most appropriate forum for the resolution of these issues.  It is to Jersey that the connecting factors lead. 

29.      It is not unfair therefore to say that the defendants' application for a stay in favour of Mauritius is premised upon the Exclusive Jurisdiction Clause.  That being the case the first task of the court is to consider whether, on its true construction, the Exclusive Jurisdiction Clause has any application at all.  Mr MacRae agreed that the burden of proving that it does apply falls upon the defendants. 

Construction of the Exclusive Jurisdiction Clause

30.      The cases that have been cited to us all involve trusts in which the proper law and forum of administration have been in place from the outset of the trusts concerned; there would appear to be no case in which a court has considered the effect of a change in the proper law on the rights of beneficiaries. 

31.      As the Jersey Court of Appeal said in Koonmen-v-Bender [2002] JCA 218 at paragraph 45:- "At the end of the day, it is a question of the court construing the document to derive from it the presumed intention of the parties" an exercise which as stated in the Representation of AA [2010] JRC 164, at paragraph 30, has to be carried out "against the background of the surrounding circumstances or matrix of facts existing at the time when the document was executed." 

32.      The Court has the evidence of Mme Crociani as to the background to her creating the Grand Trust and the legal advice she received from Mr Steven J Kumble of the US Law firm Finley, Kumble, Wagner, Underberg, Manley, Myerson & Casey, who drafted the deed.  Unsurprisingly Mme Crociani is unable to give any assistance as to the intention behind the Exclusive Jurisdiction Clause and its effect on the rights of the beneficiaries, and it is therefore to the deed itself, that in the main the court has to have regard. 

33.      Clause Fourth of the Grand Trust provides generally for the appointment and retirement of trustees.  It can be seen from clause Fourth (B) that it was envisaged that there would be only one "bank or trust company" in office at any one time (presumably to carry out the administration of the trust), to act with not more than three individual trustees, who under clause Seventh have no right to receive compensation for serving as a trustee.  That pattern of a professional trustee administering the trust and acting with lay trustees has endured until the 2012 Retirement. 

34.      The Exclusive Jurisdiction Clause applies where a professional trustee outside the jurisdiction is to be appointed and the forum of administration moved to that new jurisdiction.  It is divided into two parts.  Under the first part the new trustee outside the jurisdiction is appointed and a declaration made that the trust should be read and take effect according to the laws of the country of the residence or incorporation of that new trustee.  The second part sets out the consequences of such an appointment and declaration which we set out again:-

"...and upon such appointment being made the then Trustee or Trustees shall immediately stand possessed of the Trust Fund upon trust for the new Trustee or Trustees as soon as possible so that the Trust Fund shall continue to be held upon the trusts hereof but subject to and governed by the law of the country of residence or incorporation of such new Trustee or Trustees and thereafter the rights of all persons and the construction and effect of each and every provision hereof shall be subject to the exclusive jurisdiction of and construed only according to the law of the said country which shall become the forum for the administration of the trusts hereunder (but so that nonetheless the then Trustee or Trustees or the new Trustee or Trustees may by deed declare that the trusts hereof shall continue to be read and take effect according to the laws of the said Commonwealth of The Bahamas as provided by Clause 15 hereof) and Clause 15 hereof shall take effect and be subject to the provisions hereinbefore declared by this clause". (our emphasis)

35.      The words in emphasis are:-

"...and thereafter the rights of all persons... shall be subject to the exclusive jurisdiction of and construed only according to the law of the said country..."

Thus where these provisions apply two things happen (and not one or the other) to the "rights" of all persons; firstly the law governing those rights is changed from whatever law governed them previously to Mauritius law and secondly the courts of Mauritius have exclusive jurisdiction over their enforcement. 

36.      The Defendants submit that that these provisions are exceptionally broad in scope.  The word "rights" extends to past, present and accrued rights and any claims to enforce those rights.  Therefore it covers the rights of the plaintiffs as beneficiaries to bring these proceedings, which they say with effect from the 2012 Retirement, are now governed by Mauritius law and subject to the exclusive jurisdiction of the Mauritius Courts.  They point to the use of the words "...thereafter the rights..." as opposed to "...the rights thereafter..." as being supportive of that interpretation. 

37.      We need to test that proposition.  When the Grand Trust was established there was no exclusive jurisdiction requirement.  Article Fifteenth is in the following terms:-

"Except as herein provided, the validity and construction of the Agreement and each trust hereby created shall be governed by the laws of the Commonwealth of The Bahamas which shall be the forum for the administration thereof." 

38.      It is clear therefore that it was not the intention of the parties to the Grand Trust that the courts of The Bahamas would have exclusive jurisdiction beyond matters of administration.  There was no restriction on action being taken outside The Bahamas by a beneficiary to recover trust assets.  In particular it would have been open to a beneficiary to action say a current or retired individual trustee living outside The Bahamas, in the jurisdiction of that current or retired trustee. 

39.      Can it have been the intention of the parties to the Grand Trust that on a change of the proper law to a new jurisdiction, the right of a beneficiary to bring such an action should be restricted to the courts of that new jurisdiction, thus preventing the beneficiaries from actioning that trustee in the jurisdiction of that trustee, where any judgment could be immediately enforced? 

40.      As significantly perhaps can it have been the intention of the parties to the Grand Trust that on changing the governing law to a new jurisdiction, the law governing previous transactions and the rights of the beneficiaries (and presumably former trustees --"all persons") thereunder, would change to that of the new jurisdiction-a somewhat startling proposition?

41.      As Lawrence Collins LJ noted in Gomez-v-Gomez-Monche Vives [2009] Ch at 287, a case where the only connection between the trust and England was an English governing law clause, at paragraph 63:-

"The connection between a trust and its proper law is in every sense real and close.  A trust is not like a commercial contract where it is only necessary to consider the content of the applicable law in exceptional circumstances.  Trustees in particular have to be intimately aware of their responsibilities under the general law applicable to the trust.  They have to know whether they can lawfully accumulate income.  Resort to the law governing the trust is central to their responsibilities."

42.      A trustee will exercise its powers on the basis of the law governing the trust at that time and the rights of the beneficiaries and of the trustees arising out of that exercise must surely be judged according to that law.  If the defendants are correct in their interpretation of the Exclusive Jurisdiction Clause, the rights of the beneficiaries and the former trustee in respect of that exercise could at a stroke be changed to the law of some other jurisdiction, the identity of which of which at the time of the exercise they would have been unaware.  Their rights could be affected in wholly unpredictable ways.  We cannot conceive of any good reason why the parties to the Grand Trust would have sought to affect the rights of the beneficiaries and former trustees in this way; even if it is possible to do so. 

43.      Seeing, we feel, this deeply unattractive consequence of the interpretation placed upon the Exclusive Jurisdiction Clause by the defendants, Mr MacRae, for the defendants, submitted that it would all come back to Jersey law because under the private international law of Mauritius, the courts of Mauritius would apply the law governing the impugned transactions i.e. Jersey law.  The advice of both the experts on Mauritius law was that the Mauritius courts would look to French law on matters of private international law but neither of them addressed this particular point.  It seems to us, however, that this submission ignores the defendants' own interpretation of the Exclusive Jurisdiction Clause.  If the effect of the 2012 Retirement is to change the law governing the impugned transactions to that of Mauritius, then when the Mauritius courts come to ask the question, what is the law governing the impugned transactions, if the defendants' interpretation is right, the answer has to be Mauritius law.  If the answer is Jersey law then the Exclusive Jurisdiction Clause can have had no application to them. 

44.      As a matter of simple justice it seems to us that the rights of the plaintiffs and the defendants in relation to the impugned transactions, which it is accepted by the defendants were governed by Jersey law at the time they were entered into, must be judged by that law and not any other; and we decline to impute an unjust intention to the parties to the Grand Trust.  It follows that the Exclusive Jurisdiction Clause was not intended to apply to such transactions. 

45.      The terms of the 2010 Appointment and the 2012 Retirement expressly provide that they shall be governed by Jersey law and the parties to them expressly submitted to the non-exclusive jurisdiction of the Courts of Jersey.  Mr MacRae argued that these provisions were limited to proceedings between the parties to those two deeds (i.e. between the defendants themselves - such as for example litigation about the indemnities).  It did not concern claims such as those brought by the plaintiffs.  Furthermore he said these provisions did not alter the absolute effect of the Exclusive Jurisdiction Clause and its binding nature on the plaintiffs.  Such provisions were not capable of detracting from the express and absolute provisions of the governing trust deed.  The defendants, he said, did not and could not agree that the Courts of Jersey would thereafter be an appropriate jurisdiction to determine claims brought against them by third parties, still less by persons claiming under the Grand Trust. 

46.      We agree with Mr Robinson that this cannot be right.  The 2010 Appointment and the 2012 Retirement are not private contractual documents between the defendants governing their personal rights notwithstanding that they contain indemnities.  They are constitutional trust documents under which powers affecting the trust estate were exercised (appointing out capital, appointing new trustees and changing the proper law).  It is fundamental that they bind the beneficiaries and any questions that arise as to their effect can as a matter of trust law be raised by the beneficiaries or by a future trustee - it is not limited to the parties to it.  The defendants as trustees agreed that those transactions were governed by Jersey law and that the Jersey Courts had non-exclusive jurisdiction and it cannot have been the intention of the parties to the Grand Trust that the Exclusive Jurisdiction Clause could be used to allow them to avoid their formal commitments in this respect. 

47.      The plaintiffs, as beneficiaries, are actioning the defendants for the recovery of assets which they allege were improperly distributed/appointed out of the trust fund of the Grand Trust.  Quite separately from the suggestion that the law governing past transactions can be changed by the subsequent application of the Exclusive Jurisdiction Clause, we can see no good reason why the parties to the Grand Trust would have sought to impose restrictions upon the ability of the beneficiaries to take action, whether before or after a change in the proper law of the Grand Trust, to recover assets for the benefit of the trust estate in whatever jurisdiction and whenever it was appropriate to do so; such a restriction would be pointless and potentially highly prejudicial to the interests of the trust estate.

48.      BNP Jersey was the professional trustee at the time of impugned transactions and it has been actioned here in its own jurisdiction where any judgment can be enforced directly against it.  Can the parties to the Grand Trust have intended to prevent that happening and allow BNP to argue, as it does, on the strength of the Exclusive Jurisdiction Clause, that it can only be actioned before the courts of Mauritius? What if proceedings in relation to the impugned distributions/appointments had been brought against BNP Jersey in the Courts of Jersey before the 2012 Retirement?  Would it then be open to BNP Jersey, following the 2012 Retirement and on the strength of the Exclusive Jurisdiction Clause, to seek a stay of Jersey proceedings on the basis that the law governing the impugned distributions had changed to Mauritius whose courts now had exclusive jurisdiction?

49.      It is not clear how far the defendants take the exclusive jurisdiction of the Mauritius courts over the enforcement of the rights of beneficiaries against former trustees who reside outside Mauritius. Is all enforcement limited to Mauritius rendering any judgement obtained there against such a former trustee empty because it cannot be enforced elsewhere?

50.      All of these questions lead us to what we feel is the inevitable conclusion, that whatever the ambit of the Exclusive Jurisdiction Clause, it cannot have been intended by the parties to the Grand Trust to place any restriction on where claims against former trustees for the recovery of trust assets could be brought or to purport to change the law governing the actions of former trustees and the rights of beneficiaries thereunder; if that is the case then the Exclusive Jurisdiction Clause has no application at all.  The law governing the impugned transactions remains Jersey law and the Mauritius courts do not have exclusive jurisdiction. 

51.      What then is the ambit and purpose of the Exclusive Jurisdiction Clause?  As Kawaley CJ, said in the case of In the Matter of A Trust [2012] SC (Bda) 72 Civ, paragraph 64, in a passage we cite below, a trust can only have one domicile.  In our view the purpose of the Exclusive Jurisdiction Clause is to make it clear that where a foreign trustee is appointed and the proper law changed to the jurisdiction of that new trustee, then from that point onwards the domicile of the trust moves from the old to the new jurisdiction, which then becomes the forum for its administration. 

52.      That becomes clear when the words we emphasised above are put into their fuller context:-

"...and thereafter the rights of all persons and the construction and effect of each and every provision hereof shall be subject to the exclusive jurisdiction of and construed only according to the law of the said country which shall become the forum for the administration of the trusts hereunder..." 

53.      The reference to the deed itself and to the forum of administration makes it clear that this provision is concerned with the domestic or internal affairs of the trust; with its administration in which the former trustees no longer play any part.  The "rights of all persons" under the deed which were governed by Jersey Law and in particular by the Trust (Jersey) Law 1984 under the old domicile will now change to be governed by Mauritius law and in particular by the Mauritius Trusts Act 2001 under the new domicile.  It creates a clean break between the old and the new domicile of the trust but it does not and is not intended to affect transactions entered into under the old domicile; in particular it is not intended to place restrictions on the right of beneficiaries to action former trustees (who are effectively now strangers to the trust) for the recovery of assets allegedly improperly paid away or to alter the law governing transactions entered into under the old domicile whether expressly (as with the 2010 Appointment and 2012 Retirement) or impliedly (as with the impugned distributions). 

54.      In his oft quoted criticism of the Jersey Court of Appeal decision in Koonmen, Professor Paul Matthews said this in his article entitled What is a trust jurisdiction clause? (The Jersey Law Review - October 2003):-

"21 The "forum for administration" of a trust is quite different concept from an exclusive jurisdiction for the resolution of disputes (whether arising from trusts or otherwise.)  The administration referred to here is not intended to include contentious breach of trust litigation.  On the contrary, it is concerned with aspects of the administration of the trust which, for one reason or another, require the assistance of the court.  These might well include trustees seeking to clarify the true construction of the trust terms (for example whether they might invest in such and such an investment), or trustees seeking a direction as to whether they might safely distribute assets when they are contingent claims from third parties still in the air, whether they should disclose trust documents or information to beneficiaries, or whether they should take or defend legal action against third parties (so called "Beddoe" applications).  Indeed, it might even involve an application to remove a trustee from office and appoint another.  This is the "domestic jurisdiction" of the Chancery Court, which under the old Rules of the Supreme Court 1965 in England was represented by the provisions of Order 85.  The predecessor of that Order itself was introduced in order to avoid the need in every case to have a full action to administer the trust - a so-called "administration action".  This jurisdiction - usually, but not invariable, invoked by the trustees - continues today in England.  A similar jurisdiction exists in Jersey and, for that matter, in Guernsey.   

22 Hence the phrase "forum for administration" referred directly back to the nineteenth century (and earlier) idea of the court which would take on the administration of the trust if need be.  The most usual forum for that, of course, was the forum of the proper law.  So strictly there was no need to state the forum for administration.  And it is doubtful that selecting a different forum from that of the proper law could require the trustees to seek directions only from the nominated court.  But such an administration action was in effect procedural rather than substantive.  It was a means of dealing with matters of administration and construction.  It was not - could not be - used to deal with breach of trust issues, characteristic of the kind of hostile trust litigation for which an exclusive jurisdiction clause might be needed.  So there could not be any suggestion that this "forum for administration" was automatically intended also to be the exclusive jurisdiction for the resolution of contentious disputes involving beneficiaries.  As the leading cases in England show, that was an entirely different question, resolved - in the days before the adoption of a forum non conveniens as a part of English law - by a straightforward application of the ordinary rules of national jurisdiction.  In England and other common law countries this depended initially on where the defendants were to be physically found, and a similar rule was originally applied in Jersey.  Thus it mattered who the defendants were.  They might or might not have been the trustees, but the important point to notice is that it is the plaintiffs who would have had to make that decision, and they would probably not have been trustees.  Accordingly, the use of the phrase "forum for administration" could not, with respect, support the interpretation placed on clause 1 by the Court of Appeal." 

55.      In the A Trust Kawaley CJ was interpreting the following jurisdiction clause:-

"This Trust shall be governed by the laws of Bermuda and the forum for the administration of this Trust shall be the courts of Bermuda." 

56.      Finding that this constituted an exclusive jurisdiction clause in respect of applications that involved the "administration of the trust" he said this:-

"The express choice of a governing law for a trust must accordingly be an exclusive one as it signifies the domicile of the relevant trust.  A trust can only have one domicile.  It follows that the combination of a Bermuda governing law clause and a Bermuda forum for administrative clause points towards the draftsman's intent that the courts of Bermuda should exclusively determine matters relating to the administration of the trust.  This is probably why Rokison JA in Koonmen-v-Bender also analysing a clause selecting a single governing law and administration forum for a trust, rightly considered that the absence of the word "exclusive" (or indeed the inclusion of the phrase "exclusive jurisdiction" in the definition of "Governing Law") did not matter.  The choice of Bermuda law as the governing law of the trust combined with the designation of Bermuda law as the forum for the administration of a trust will ordinarily signify both (a) the exclusive selection of Bermuda as the domicile of the trust, and (b) the exclusive selection of Bermuda as the forum the courts of which will supervise the administration of the trust". 

57.      And then he then concluded as follows at paragraph 67:-

"This conclusion necessarily leaves open the possibility that a variety of claims might not caught by such a clause.  Obvious examples of potential claims not caught by the clause include claims brought by trustees against strangers to the trust or beneficiaries to recover trust property, claims relating to the administration of the trust asserted abroad in ancillary proceedings and/or any other claims which clearly have no connection with the administration of the trust." (our emphasis).

58.      At the end of the day it is a question of construing the particular document before the Court but notwithstanding the apparently wide terms of the Exclusive Jurisdiction Clause, we conclude that it has no application to the claims brought by the plaintiffs in respect of the impugned transactions.  They were and remain governed by Jersey law and they are not subject to the exclusive jurisdiction of the courts of Mauritius. 

59.      The Agate Appointment did take place after the 2012 Retirement, in direct response to the letter before action sent by Bedell Cristin.  The claim by the plaintiffs in relation to the Agate Appointment again constitutes an action by them as beneficiaries to recover assets for the benefit of the Grand Trust from all of the defendants and for the reasons given above does not come within the provisions of the Exclusive Jurisdiction Clause. 

60.      Assuming the validity of the 2012 Retirement, Appleby Mauritius is now the sole trustee of the Grand Trust and it can legitimately expect therefore to be actioned in its own jurisdiction.  The following points arise for consideration here.  Although the plaintiffs' order of justice seeks remedies against all of the defendants in respect of the claims made, Appleby Mauritius have only latterly become involved in the affairs of the Grand Trust.  It can have no possible liability for the claims made in relation to the impugned distributions and the 2010 Appointment.  It became involved for the first time when the 2012 Retirement was executed; even then it would seem clear from the Exclusive Jurisdiction Clause (although this was not a matter of discussion during the hearing) that it was the first three defendants as the then current trustees who exercised the power both to appoint Appleby Mauritius and to change the proper law. 

61.      Appleby Mauritius is a necessary party to the principal claims of the plaintiffs against the first three defendants in order to be to be bound by and take the benefit of any subsequent judgement and is a substantive defendant only in relation to the Agate Appointment.  Can this entitle the defendants to argue that all of the claims should be heard in Mauritius?  In Pacific International Sports Clubs Limited-v-Surkis [2009] EWHC 1839 (ch) the claimant had brought his claim in England notwithstanding the fact that the only connection between the claims brought and England was that one of the defendants to a minor part of the claim was an English company SMI.  The Court could not decline jurisdiction in respect of the claim against SMI because of the effect of the Council Regulation (EC) 44/2001.  Having determined that the vast majority of the claims brought by the claimant ought to be determined in the Ukraine, Blackburn J refused to allow the claim against SMI to prevent him from ordering that the remainder of the claims be stayed in favour of the Ukranian proceedings:-

"It follows therefore that neither the doctrine of forum non conveniens nor the application "reflexively" of articles of the Judgments Regulation provides grounds for staying the pursuit by Pacific in this jurisdiction of its claims against SMI.  Does this mean that, given Pacific's wish to pursue its claims against SMI in this jurisdiction, this court should allow Pacific to continue to pursue its claims against the other defendants in this jurisdiction notwithstanding that, as against those other defendants, application of the doctrine of forum non conveniens, unaffected in the case of those other defendants by the impact of the Judgments Regulation, indicates that Pacific's claims against those others should be pursued in the Ukraine.

I am not persuaded that it does.  According to the particulars of claim in this action, SMI is, like the BVI defendants, a relatively minor player in the dispute: it was no more than the means whereby Mr Surkis held and was able to take control of Dynamo.  The principal dispute is undoubtedly between Pacific on the one hand and Mr Surkis and Mr Zgursky on the other.  To allow the fact that the doctrine of forum non conveniens cannot be applied in SMI to dictate where the dispute as a whole must be tried would be, in my view, to allow the tail to wag the dog.  In particular, I see no reason why, given my conclusions in relation to the application of the doctrine of forum non conveniens to the other defendants, I should not stay the action against Mr Surkis and set aside the permission order, and with it the service of the claim form on the BVI defendants, leaving it to Pacific to pursue its dispute with those persons (and SMI if it wishes) in the courts of Ukraine."

62.      In the case before us, Appleby Mauritius played a relatively minor role.  The principal dispute is between the plaintiffs on the one hand and the first three defendants on the other.  The fact that Appleby Mauritius is a party cannot be allowed to dictate where the dispute as a whole should be tried; that would be to allow the tail to wag the dog and we decline to allow that. 

Appropriate forum

63.      If we are wrong in our construction of the Exclusive Jurisdiction Clause and it does apply to the plaintiffs' claims, then we must move on to consider whether, as urged by the plaintiffs, we should in our discretion override its provisions.  We agree with Mr MacRae's submission that the burden of proving that we should override it is on the plaintiffs, as made clear in the case of EMM Capricorn Trustees Limited (as Trustee of the "The Tramp Trust")-v-Compass Trustees Limited and Compass Trustees Limited (as Trustees of "The Time Trust." [2001] JLR 2005.  In that case the court held that an exclusive jurisdiction clause in a trust deed should not be given the same weight as one in a contract. 

64.      At paragraph 16, Birt, then Deputy Bailiff, said:-

"[Counsel] argued that an exclusive jurisdiction clause in a trust deed should be given the same weight as in a contract.  But that is to ignore the difference between the two documents.  If A and B agree in a contract that they will refer any dispute to the courts of a particular country, one can well understand why they should generally be held to their bargain.  They have agreed it; why should one of them then be allowed to go back on what has been freely agreed?  But the position is very different in relation to a trust.  The exclusive jurisdiction provision of a trust deed will have been agreed only between the settlor and the original trustee.  Actions in relation to the trust may be brought by beneficiaries who were never parties to the trust deed; indeed they may not even have been alive at the time of its execution.  The policy considerations which lead to a party to a contract being held to his choice of exclusive jurisdiction cannot apply to a beneficiary who played no part in the choice of exclusive jurisdiction made in the trust deed." 

65.      He went on at paragraph 19 to summarise the principles to be applied as follows:-

"In our judgment, the correct approach for trusts is that established for exclusive jurisdiction clauses in relation to contracts but with the burden upon the plaintiff being less onerous than in contract cases.  We would therefore summarize the principles to be applied as follows:

(a)       Where plaintiffs sue in Jersey in breach of a provision in a trust deed which states that disputes should be referred to the exclusive jurisdiction of a foreign court, and the defendants apply for a stay, the Jersey court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. 

(b)       The court should start from the position that exclusive jurisdiction clauses mean what they say and a stay should therefore normally be granted unless good reason is shown for not doing so. 

(c)       The burden of showing that there is good reason not to grant a stay is on the plaintiffs. 

(d)       In exercising its discretion, the court should take into account all the circumstances of the particular case. 

(e)       In particular, but without prejudice to (d), the following matters, where they arise, may properly be regarded:

(i)        in what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the rela­tive convenience and expense of trial as between the Jersey and foreign courts;

(ii)       whether the law of the foreign court applies and, if so, whether it differs from Jersey law in any material respects;

(iii)      with what country either party is connected, and how closely;

(iv)      whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages; and

(v)       whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would (a) be deprived of security for their claim; (b) be unable to enforce any judg­ment obtained; (c) be faced with a time-bar not applicable in Jersey; or (d) for political, racial, religious or other reasons be unlikely to get a fair trial."

66.      It had been thought that the Court of Appeal in Koonmen applied a stricter test as to whether the Court should override an exclusive jurisdiction clause, namely that it should only do so in exceptional circumstances (see [2002] JLR N45 and Representation AA in which the stricter test was questioned).  The Court of Appeal makes no reference in its judgment to Capricorn, although it was cited to it, and does not expressly address or seek to overturn the approach set out by the Court in Capricorn.  Indeed on closer examination of the reasoning of the Court of Appeal, it appears, as Mr Robinson submitted, that it was somewhat equivocal as to the test to be applied in relation to trusts.  The key section of the judgment is contained in paragraph 49, which is in the following terms:-

"Unlike an arbitration clause which now by statute must in most cases be respected, the courts still retain a discretion to override an express choice of forum in a contract or trust deed.  But prima facie, the court's function is to interpret and apply the agreement of the parties or the expressed intention of those creating the trust deed, and as a general rule the courts will give effect to a choice of forum.  The court will override an agreed choice of forum only in exceptional circumstances.  The rule is clearly stated in Dicey and Morris in Rule 32(2) and in the following text and the cases thereafter cited.  Although it may be argued that the presumption in favour of applying the express provisions of a trust deed may not be as strong as that in favour of holding parties to a contract to the terms of their agreement, I see no reason why the presumption should not be just as strong as between the Settlor and those claiming to have been "standing behind" the Settlor, as Mr Koonmen and Mr Bender were in this case, and the Trustees.  Further, I consider that, as an important element in the structure of the trust in respect of which any would-be beneficiary claims an interest, it should prima facie be binding on such beneficiary."

67.      The general rule that the Court of Appeal refers to is identified as that set out in Dicey and Morris (13th Edition) Rule 32(2) which is in the following terms:-

"Subject to clause (3) of this Rule, where a contract provides that all disputes between the parties are to be referred to the exclusive jurisdiction of a foreign tribunal, the English Court will stay proceedings instituted in England in breach of such agreement (or as the case may be) refuse to give permission to serve process out of the jurisdiction unless the claimant proves that it is just and proper to allow them to continue." 

68.      As can be seen the rule relates exclusively to contracts.  There is no rule that applies to trusts.  The Court of Appeal then goes on to consider the argument in relation to trusts and saw no reason why what it described as the presumption in favour of applying the express provisions of a trust deed should not be just as strong as between the settlor (and those claiming to stand behind the settlor) and the trustees.  That was the approach of the Supreme Court of British Colombia in the case of Green-v-Jernigan (2003) BCSC 1097, where the plaintiffs had entered into a trust agreement with the defendants selecting the Island of Nevis as the forum for the administration and the governing law.  Groberman J, said at para 48:-

"I do not, of course, know why the plaintiffs have chosen to do so, but it would be surprising if they did not have cogent reasons for wishing to place their significant assets in a secretive offshore trust.  I have no hesitation in finding that having expressly chosen such a vehicle for their investments, the plaintiffs are stuck with dealing with those investments under the laws of Nevis and in its courts, even though they may now see those laws as disadvantaged or distasteful."

69.      When the Court of Appeal in Koonmen went on to deal however with the position of beneficiaries who had not been party to any agreement in this respect, it went no further than saying that such a clause should "prima facie" be binding on such beneficiaries; prima facie meaning at first sight or on the face of it. 

70.      The defendants, in our view, make the same mistake as counsel in Capricorn of giving an exclusive jurisdictional clause in a trust deed the same weight as in a contract.  Reliance was placed by the defendants on the following extract from Dicey, Morris & Collins "The conflict of Laws" (15^th Edition) at paragraph 12-114:-

"...where an English court is called on to exercise jurisdiction in circumstances in which the material jurisdictional facts are not agreed, the party who wishes to invoke the jurisdiction will be required to have the better of the argument that the facts which support its invocation of the jurisdiction are satisfied.  It is likely that the same principle applies in mirror image when a party challenges the exercise of jurisdiction by pointing to an agreement providing for the jurisdiction of the courts in a foreign country.  If the court is required to decide who, on the material before it, has the better of the argument on the facts and matters relevant to the existence and exercise of jurisdiction, the question of who has the burden of proof will be the ordinary one, that the party who seeks to establish a fact bears the burden of establishing it."

71.      This commentary however comes under Rule 39 which relates exclusively to contracts.  The authority relied on is the House of Lords decision in Bols Distilleries BV-v-Superior Yacht Services Ltd [2006] UKPC 45, [2007] 1 WLR 12.  In that case the plaintiff, a Gibraltar company, brought proceedings in Gibraltar against two defendant companies who were domiciled in the Netherlands and Poland respectively, in reliance on a clause in a draft contract that the agreement would be governed by the laws of Gibraltar and the parties would submit to the jurisdiction of the courts of Gibraltar.  The defendants denied that any contract including that clause had ever been concluded.  The House of Lords held that the plaintiff in those circumstances had to show that it had a much better argument than the defendants on the material available, that the clause conferring jurisdiction on the Gibraltarian court was the subject of consensus between the parties. 

72.      Mr MacRae argued that unless the plaintiffs could establish that they had the "better of the argument" that the 2012 Retirement was void, then it must be treated as valid and enforceable.  It was only the plaintiffs allegation that it was a "fraud on the power" that Mr MacRae argued was capable of rendering the 2012 Retirement void rather than merely voidable.  The only case which suggests that a purported exercise of a power, which is a "fraud on the power", is void is Cloutte-v-Storey [1911] 1 Ch 18, which Lord Walker in Futter-v-the Commissioners for HM Revenue and Customs [2013] UKSC 26 described as "difficult case". 

73.      We reject that approach.  We can see that where a plaintiff is seeking to establish a court's jurisdiction over defendants in circumstances where the material jurisdictional facts are not agreed, then the plaintiff is required to show that it has the better of the argument on the material available.  In this case however the defendants have all accepted the jurisdiction of this Court; the issue is whether there are circumstances justifying the Court in its discretion overriding the provisions of the Exclusive Jurisdiction Clause.  In exercising its discretion the Court should take into account, as per Capricorn, all the circumstances of the case. 

74.      We reject in particular the assertion that we should decide at this stage which party has the better of the argument in relation to the 2012 Retirement, as that is an issue which falls to be determined at the substantive hearing.  This court should be sensitive to the need to avoid prejudgment (see the comments of Rix LJJ in Konkola Copper Mines plc-v-Coromin [2006] 1 All Er (Comm) 437 at para 96). 

75.      In our view the following circumstances provide good reasons for this court to override the Exclusive Jurisdiction Clause:-

(i)        As we have found above, absent the Exclusive Jurisdiction Clause, the principal claims of the plaintiffs have their closest and most real connection with Jersey.  The circumstances here are quite different to those in Koonmen, where the Jersey Court was dealing with an Anguillan trust and arguments as to the plaintiff's beneficial interest under it. 

(ii)       The defendants' case as to the exclusive jurisdiction of the Mauritius court is based entirely upon the 2012 Retirement but the validity of that document is itself an issue in the proceedings.  Clause 12 of the 2012 Retirement is in the following terms:-

"This instrument shall be governed by and construed in accordance with the laws of the Island of Jersey and the parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of the courts of the Island of jersey in connection herewith"

(iii)      Mr MacRae sought to avoid the effect of this provision for the reasons rehearsed in paragraph 45 above and we reject those arguments for the same reasons as set out in paragraph 46 above.  The fact of the matter is that the defendants, when they were trustees, agreed firstly that Jersey law governs any issue as to the validity of the 2012 Retirement and secondly that they irrevocably submitted to the jurisdiction of this Court.  They should be held to what they have agreed. 

(iv)      We decline to comment upon the merits of the plaintiffs' case in relation to the 2012 Retirement as we do not wish to prejudge an issue that will be for the Court at the substantive hearing.  It is accepted by the parties that the power to appoint new trustees is a fiduciary power, which must be exercised for the benefit of the beneficiaries.  Leaving aside the allegations of fraud on the power and conflicts of interest, the Court at the substantive hearing will need to consider:-

(a)       Whether the reasons put forward by the defendants for the appointment of a new trustee and the change in the proper law were proper considerations for trustees to have taken into account. 

(b)       Whether the defendants should have proceeded (as we understand was the case) without first ascertaining the views of Cristiana (if those views were ascertainable) as to whether the appointment of Appleby Mauritius and the change of proper law was for her benefit and that of her issue. 

(v)       The plaintiff having issued proceedings in Jersey and the defendants having accepted the jurisdiction of the Jersey Court, it is unjust to the plaintiffs to send the case away to Mauritius, where they will face a number of uncertainties which do not apply here and upon which we expand below. 

76.      The Court received affidavits as to Mauritius law from Mr Ivan Lesley Collendavelloo, a barrister practising in Mauritius, for the plaintiffs and from Mr Ariranga Pillay, a former Chief Justice of Mauritius, who now works as a legal consultant, for the defendants and the Court was very grateful for their assistance.  No disrespect is intended by our focusing on those issues which inform the immediate decision we have to make.  Clearly there are a number of procedural issues that would arise if the plaintiffs were required to bring their claims in Mauritius, bearing in mind that the defendants' proceedings there have been commenced by way of motion seeking declarations, but as Mr Robinson conceded it is clear from the advice of the experts that they could be overcome.  There were however matters raised by the experts which we think are material:-

(i)        Both experts were agreed that Mauritius has no equivalent to discovery as we know it under the Royal Court Rules, which means that in Mauritius a party has no obligation to disclose all documents relevant to the case to the other party, including documents which are detrimental to his own case.  Under section 33(1)(c) of the Trusts Act 2001 in the absence of any express provision in the trust deed authorising disclosure of the information, there is no right to disclosure on the part of beneficiaries, but under the provisions of section 33(5) the Court can make an order for disclosure of information or documents for the reason mentioned in that section, namely, where it is satisfied that the disclosure is bona fide required for the purpose of any civil proceedings.  This in Mr Pillay's view was a broad power to order disclosure, which the plaintiffs could utilise in order to obtain orders to a similar effect as discovery in this jurisdiction.  In Mr Collendavelloo's opinion the ambit of section 33(5) was uncertain.  As it was an exception to the rule that a party is not bound to disclose all documents relevant to the case, a party applying under that section must, he said, necessarily already be aware of the existence of the document or information sought. 

(ii)       Under section 68(2)(b) of the Trusts Act 2001 (and leaving aside fraud) actions against trustees are limited to two years from the date on which the beneficiary first has knowledge of the breach of trust.  Both experts agreed, although Mr Collendavelloo expressed it in somewhat more diffident terms, that the Mauritius courts would apply French Private International law, and if a foreign law applied in respect of a claim brought in Mauritius, the rules applicable as to limitation under that foreign law (rather than their own rules) would be applied so long as they did not offend their "ordre public"; i.e. that Jersey law rules as to limitation would be applied.  However that assumes that Jersey law does apply to the impugned transactions and as discussed above neither counsel had been asked to opine on the effect of the Exclusive Jurisdiction Clause and the construction placed upon it by the defendants. 

(iii)      In his second affidavit Mr Collendavelloo questioned whether under Mauritius law the limitation period of two years was absolute.  Mr Pillay advised that whilst statutory delay must be strictly complied with, a discretion may be exercised by the Mauritius court in exceptional circumstances to extend the limitation period of two years. 

(iv)      There was a difference of opinion between the experts as to when time would begin to run against Cristiana; time would not run against her children until they reached their majority.  Mr Collendavelloo said it was unclear for the purposes of section 68(2) whether the knowledge of existence of facts capable of constituting a breach of trust is sufficient or of knowledge that the facts give rise to a breach of trust is required.  He said there had been no case law on knowledge in the trust context in Mauritius.  Mr Pillay agreed that there was no Mauritius decision on the matter but in his view the Mauritius courts would follow West-v-Lazard Bros and Co (Jersey) Ltd [1993] JLR 165, namely that knowledge referred to in Section 62(2)(b) requires actual knowledge that there has been a breach of trust or knowledge that would lead a reasonable person to the inevitable conclusion that there had been a breach of trust.  The point is of some significance to Cristiana, as Mr Robinson pointed out, in that the 2010 Appointment, where it is alleged substantial value was wrongly appointed out of the Grand Trust, took place more than two years ago. 

(v)       Under Mauritius law there is a limit of MUR14,000 (which is approximately GBP300) on the costs that can be recovered in civil proceedings.  Mr Pillay pointed out that under section 65 of the Trusts Act 2001:-

"the Court may order the costs and expenses of, and incidental to an application to the court under this Act to be paid from the Trust property or in such other manner and by such persons as it thinks fit." 

He also points out that a restriction on costs is not at all unusual and is the rule in many jurisdictions.  It can operate as much to the advantage of the plaintiff as to the disadvantage. 

77.      The defendants clearly recognised that the Court might be concerned in particular with the issue of discovery and limitation and in their skeleton argument in reply offered written undertakings not to raise or rely on any limitation defence under section 68 of the Mauritius Trusts Act 2001 with respect to any claims which would not have been barred under Jersey Law when these proceedings were issued, to provide discovery and inspection equivalent to that which would be ordered as a matter of course in these proceedings and to consent to an order of the Mauritius Court directing them to provide such discovery and inspection. 

78.      Mr Robinson said that an undertaking was no substitution for the formal established system of discovery in this jurisdiction where everyone knows how it works and which can be enforced.  He did not know what the Mauritius courts would make of the undertakings when the obligation to make discovery does not exist under Mauritius law.  As to limitation, it was now more than two years from the 2010 Appointment and there was uncertainty firstly as to whether the Jersey rules on limitation would be applied by the Mauritius courts and secondly as to the knowledge required.  Camilla, who the plaintiffs will no doubt be seeking to add as a party to these proceedings in respect of the Crica claims for the reasons set out below, was not a party to the undertakings offered and would not therefore be bound by them if the proceedings were moved to Mauritius. 

79.      The point made by Mr Robinson was that the plaintiffs' had issued proceedings in Jersey whose jurisdiction the defendants had accepted and where neither of the uncertainties as to discovery and limitation existed.  The plaintiffs were now potentially being sent off to Mauritius where they faced uncertainties that did not exist here and were being asked to rely on written undertakings from the very parties they were pursuing in what are very hostile proceedings.  We felt there was some force in that submission. 

80.      Mr MacRae referred us to Trendtex Trading Corp-v-Credit Suisse (1982) AC 679 in which a stay was granted in favour of a Swiss forum notwithstanding that the plaintiff in a fraud claim would not have the benefit of the extensive discovery available in England.  However in that case the parties had agreed that Swiss law would govern their contract and that the Swiss courts would have exclusive jurisdiction.  It was held that the advantages to Trendtex of obtaining an order for discovery in England could not outweigh the other reasons for leaving the parties to the forum of their choice (per Lord Roskill at page 705).  Trendtex was cited (at page 483) in the judgment of Lord Goff in Spiliada where he said at page 482:-

"No doubt each of these systems has its virtues and vices; but, generally speaking, I cannot see that, objectively, injustice can be said to have been done if a party is, in effect, compelled to accept one of these well-recognised systems applicable in the appropriate forum overseas". (our emphasis)

81.      In other words where an appropriate forum has been established then the parties have to accept the virtues and vices of that forum.  What is different in the case before us is that the plaintiffs are being asked to accept uncertainties in a forum which, applying ordinary principles, is not the appropriate forum; the appropriate forum where none of these uncertainties exist is Jersey.

82.      Mr MacRae argued that the potential restriction on recovery of costs from the losing party was irrelevant.  There are similar cost regimes in many US States as well as many other countries around the world and nobody, he said, would suggest that Jersey must not decline jurisdiction in favour of the US or those other countries as a result of this.  We disagree that this is irrelevant.  In our view it is one of the circumstances to be taken into account in deciding whether to override the Exclusive Jurisdiction Clause.  The ambit of section 65 of the Trusts Act 2001 is on the face of it unclear; would hostile proceedings for breach of trust constitute "an application" under that Act? The whole purpose of these proceedings is to reinstate the trust fund with funds it is alleged have been improperly distributed/appointed out. It is scant consolation for the plaintiffs' that should they succeed, whilst the trust fund may be reinstated, they will have to bear their own (no doubt substantial) costs.  Having their costs paid out of the trust fund would, to that extent, defeat the purpose. 

83.      Taking into account all of these circumstances, we conclude that there is good reason to override the Exclusive Jurisdiction Clause.  If we are wrong in our interpretation of Koonmen then we find for the same reasons that the circumstances here are exceptional. 

84.      We should mention in passing that the plaintiffs pointed to what we regard as an error in the 2012 Retirement, in that whilst in the preamble it records that the parties' "wish to declare" that the Grand Trust shall be governed by Mauritius law, there is no actual declaration to that effect in the operative part of the instrument.  As the intention of the parties' was clear, we agree with Mr MacRae that the courts would be likely to give effect to that intention, applying the principles set out in the case of In the Matter of the Shinorvic Trust [2012] JRC 081.  This is not therefore a factor which we felt we should take into account when deciding whether or not to override the Exclusive Jurisdiction Clause. 

Crica Claims

85.      We turn finally to the Crica claims.  The defendants raised justified criticisms of the plaintiffs' order of justice in relation to these claims in that Camilla, one of the transferors, had not been made a party nor had the entity to which the shares were actually transferred, namely BNP Paribas Jersey Nominee Company Limited nor had the trustees of the Fortunate Trust in that capacity.  In any event Mr MacRae submitted that the Crica claims had scant connection with Jersey or Jersey law.  Each of the transfers was governed, he said, by BVI Law being the lex situs of the shares (following MacMillan Inc-v-Bishopsgate Investment Trust plc and Ors (No3) [1996] 1 All ER 585).  This claim he submitted should be split off and sent to the BVI following the decision of the Guernsey court in Colussi-v-Investec Trust (Guernsey) Limited & Ors, (25 May, 2007) and the English High Court in Pacific International Sports Clubs cited above. 

86.      Any defects in the pleading, which Mr Robinson acknowledged, will be a matter for another day, but we disagree that these transfers have scant connection with Jersey.  The shares were transferred to the Fortunate Trust of which BNP Jersey and Mme Crociani were trustees, which was governed by Jersey law and which was administered from Jersey by BNP Jersey.  It is clear from Mr Le Cornu's second affidavit that he organised the transfers.  It all forms part of the chain of events of which surround the Grand Trust claims. 

87.      The facts in Colussi-v-Investec were very different to those before us, the Guernsey Court finding no connection with Guernsey at all.  In relation to Pacific International Sports Clubs there is no question here of the Crica claims being the tail wagging the dog; it is more a case of the dog wagging the tail.  They represent a minor part of the claims brought in this jurisdiction and have been added, it seems to us, because it is convenient and cost effective to do so. 

88.      As the Guernsey Court of Appeal held in Carlyle Capital Corporation Ltd-v-Conway and Ors CA Guernsey 5 March, 2012, paragraph 47:-

"This feeds into a third point on which the Deputy Bailiff, in our respectful view, erred.  Stating (correctly) that all the parties accepted the desirability of proceedings in a single jurisdiction, he continued "none of them persuaded me that it is imperative to do so" (DB para 152).  This inverts the proper approach.  Presumptively all proceedings should be heard in a single jurisdiction; modern cases form Spiliada to Altimo Holdings require the court to choose which jurisdiction is forum conveniens.  It is for a party who contends for fragmentation to contend that (exceptionally) fragmentation is imperative, rather than vice versa.  So, in so far as the Directors sought to defend the Deputy Bailiffs order, the burden lay upon them so to justify the split.  It was not for the Liquidators who assaulted it to show why a split could not be entertained.  The Deputy Bailiff relied on no authority for his statement; and we were not shown any which supports it."

89.      Mr Robinson disagreed that the Crica claims fell to be determined by BVI Law.  They were, he said, based in part on the equitable jurisdiction to set aside a gift made by mistake.  Where the gift is personalty and made to a Jersey settlement (as the Fortunate Trust was) the applicable law of mistake is that of Jersey - see Re S [2011] JRC 117. 

90.      We make no finding as to the proper law governing the transfers but we see absolutely no point in fragmenting off this relatively minor part of the claim and requiring the parties to go to the expense and inconvenience of litigating separately in the BVI.  The transfers concern parties to these proceedings (apart from Camilla and BNP Jersey's nominee company who no doubt the plaintiffs' will now seek to join) and as we said previously they all form part of the chain of events which surround the Grand Trust claims. 

91.      In conclusion we refuse the defendants' application for a stay of the proceedings. 

Authorities

Crociani-v-Crociani [2013] JRC 090.

Royal Court Rules 2004.

Spiliada Maritime Corporation-v-Cansulex Ltd [1987] 1 AC 460.

Gheewala-v-Compendium Trust (PC) [2003] UKPC 77.

Gheewala-v-Compendium Trust [2003] All ER (D) 291 (Nov).

Leeds United FC-v-Weston and Levi [2012] JCA 083.

Dicey, Morris & Collins:- the Conflict of Laws (15th Edition).

Koonmen-v-Bender [2002] JCA 218.

Representation of AA [2010] JRC 164.

Gomez-v-Gomez-Monche Vives [2009] Ch at 287.

In the Matter of A Trust [2012] SC (Bda) 72 Civ, 64.

Trust (Jersey) Law 1984.

Mauritius Trusts Act 2001.

What is a trust jurisdiction clause? Professor Paul Matthews, October 2003, Jersey Law Review.

Pacific International Sports Clubs Limited-v-Surkis [2009] EWHC 1839 (ch).

Council Regulation (EC) 44/2001.

EMM Capricorn Trustees Limited (as Trustee of the "The Tramp Trust")-v-Compass Trustees Limited and Compass Trustees Limited (as Trustees of "The Time Trust"). [2001] JLR 205.

Rep AA in re the D discretionary Trust [2010] JRC164.

Dicey and Morris (13th Edition).

Green-v-Jernigan (2003) BCSC 1097.

Bols Distilleries BV-v-Superior Yacht Services Ltd [2006] UKPC 45.

Bols Distilleries BV-v-Superior Yacht Services Ltd [2007] 1 WLR 12.

Cloutte-v-Storey [1911] 1 Ch 18.

Futter-v-the Commissioners for HM Revenue and Customs [2013] UKSC 26.

Konkola Copper Mines plc-v-Coromin [2006] 1 All Er (Comm) 437.

West-v-Lazard Bros and Co (Jersey) Ltd [1993] JLR 165.

Trendtex Trading Corp-v-Credit Suisse (1982) AC 679.

In the Matter of the Shinorvic Trust [2012] JRC 081.

MacMillan Inc-v-Bishopsgate Investment Trust plc and Ors (No3) [1996] 1 All ER 585.

Colussi-v-Investec Trust (Guernsey) Limited & Ors, (25 May, 2007).

Koonmen-v-Bender and Seven Others [2002] JLR N 45.

Carlyle Capital Corporation Ltd-v-Conway and Ors CA Guernsey 5 March, 2012.

Re S [2011] JRC 117.