[2007]JRC223C
royal court
(Samedi Division)
28th November 2007
Before : |
M. C. St. J. Birt, Esq., Deputy Bailiff, and Jurats Le Breton and Morgan. |
Between |
Nautilus Trustees Limited |
Representor |
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And |
(1) Advocate John Daniel Kelleher (as curator of JWN). (2) CPMN. (3) MJN. (4) JJN. (5) SJWN. (6) SJN. (7) Advocate Andrew Philip Begg (as guardian ad litem for the minor and unascertained beneficiaries).
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Respondents |
Advocate D. E. Le Cornu for the Representor.
Advocate M. H. Temple for the Second Respondent.
Advocate A. P. Begg in person.
Advocate J. D. Kelleher (the Curator) has obtained the consent of the Jurats not to appear today.
Advocate R. J. F. Pirie appeared as the current protector.
judgment
the deputy bailiff:
1. This is a representation by Nautilus Trust Company Limited as trustee of a settlement established on 17th November, 1997, seeking the Court's approval to the proposed exercise by the Trustee of the power of amendment conferred upon it by clause 13(1) of the trust deed.
2. The Trust was created by JWN. He was domiciled in Jersey at the time and the Trust is governed by the law of Jersey, so the Court has jurisdiction.
3. It is a conventional discretionary trust. The class of beneficiaries comprises the settlor, his wife C, his four sons and the remoter issue of the settlor born before the end of the trust period. At the moment we are advised that there are some 3 minor grandchildren and Advocate Begg has been appointed to represent them and the unascertained beneficiaries.
4. The trust deed contains provision for a protector. Mr David Lyons was the original protector named in the trust deed but the current protector is Advocate Richard Pirie. Sadly the settlor suffered a severe stroke on 24th February, 1999, and became incapable of managing his own affairs. On 28th May, 1999, Advocate Kelleher was appointed as his curator and he remains in that position.
5. It is an active trust in the sense that there are substantial assets and the underlying activity of some of the companies involves property development. Clause 13(1) of the trust deed confers a power on the trustees to vary the deed as follows:
"(1) Subject to the overriding restriction imposed by Clause 15 hereof the Trustees may with the prior or simultaneous written consent of the Settlor during his life time and after his death with the prior or simultaneous written consent of the protector at any time or times during the discretionary period by writing make any alterations, deletions or additions to the provisions of the Trust other than clause 15 hereof which they consider in their absolute discretion to be for the benefit of all or any one or more of the beneficiaries."
6. The Trustee proposes to exercise that power with the consent of the Curator (representing the settlor) who has obtained the necessary consent from two Jurats under the Mental Health (Jersey) Law 1969. However, the Trustee wishes the Court to approve this exercise. This is not an approval of a variation on behalf of minors under Article 47. The Trustee is exercising a power of variation conferred on it under the deed but, because it is a momentous decision, the Trustee wishes to obtain the approval of the Court. Our rôle is therefore that summarised in the case of Re S Settlement [2001] JRC154.
7. The proposed amendments fall into three categories. The first category relates to the position of the settlor. The trust deed provides that a number of important powers of the trustees may only be exercised "with the prior or simultaneous written consent of the Settlor during his life time and after his death with the prior or simultaneous written consent of the protector".
8. That provision applies to the power to add or exclude beneficiaries, the power to deal with income or capital, the power to appoint new or additional trustees, the power to change the proper law and the forum and place of administration and the power to vary the deed under clause 13(1).
9. It follows that at present when any such powers are to be exercised it is necessary to obtain the consent of the curator who in turn must obtain the consent of two Jurats. This is a slow process and incurs expense. Furthermore it involves people who are not directly concerned with the administration of the Trust. Clearly the trust deed envisages that after the settlor's death the protector would fulfil this rôle and in many ways his current unfortunate situation is akin to the situation where he had died. Certainly in many trust deeds one finds a provision that where a settlor becomes mentally incapacitated the deed should be read as if he were deceased. That is the proposal here and it seems to us entirely reasonable. Thus the consent of the protector instead of the settlor will be required in future.
10. The second category of change proposed is that there should be inserted a power to remove the trustee. There is no such power at present. It is suggested that that power should be conferred upon the wife. In addition the power currently held by the settlor to appoint new or additional trustees should be vested in her. This is the category of change which has caused us most concern. However, Mr Le Cornu has pointed out that the family have always been closely involved in this Trust. The settlor has always had the many powers conferred on him by the trust deed. Furthermore, there was at one stage a time when the trustees were not professional trustees but were members of the family. Although there is now a professional trustee it is wished strongly to retain the involvement of the family in this way and it is felt that the conferring of a power to remove and appoint new trustees on the wife would assist in this process. Following her death those powers will revert to the protector.
11. We bear in mind that the exercise of any such power would be a fiduciary power which could only be properly done bona fide in the interests of the beneficiaries as a whole. Overall we are satisfied in the particular circumstance of this case that that is also a reasonable alteration.
12. The third category relates to the insertion of a provision enabling the protector to charge fees. At present there is no such provision. The protector is, as we have said, Advocate Pirie, who is a professional person. It is of course common place that such a person should be entitled to charge for time spent. Given the first category of alteration which we have approved the protector's involvement will increase from now on and he will need to get involved to a much greater extent than previously. Furthermore, it is clear that the settlor himself envisaged that after his death it would be reasonable for a protector to be remunerated because his letter of wishes states that he would like David Lyons, who was the protector at the time, to be remunerated after his death.
13. The Court has on other occasions approved changes whereby trustees can be remunerated on the basis that it is in the interests of the beneficiaries for their trust to be professionally managed and although there is, in one sense, a diminution of the trust fund by the charging of fees, overall it is in their best interests that the trust should be professionally managed and without a remuneration clause that would not occur. We think similar arguments apply to a protector who is a professional person and therefore we do consider it reasonable to make that amendment as well.
14. In all the circumstances we approve all three categories of amendment. The costs of all parties can come out of the trust fund.
Authorities
Mental Health (Jersey) Law 1969.
Re S Settlement [2001] JRC 154.