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Comity is alive, well and living in Jersey
Briefing note written by David Dorgan
Representation of Mourant & Co Trustees Limited In the Matter of the B Trust [2006]
Facts:
Following directions from the Royal Court, the Trustee submitted to the jurisdiction of the English Family court which ordered the variation of the trust to create a sub-trust for the benefit of the wife. The Trustee then applied to the Royal Court for further directions as to how it should respond to the English order.
Part of the husband’s argument before the Royal Court was that the jurisdiction to enforce a foreign judgement on the basis of comity had been removed on proper interpretation of Article 9 of the Trusts (Jersey) law 1984 (as amended by the Trusts (Amendment No.4) (Jersey) Law 2006. Counsel for the husband argued that reading Article 9(3) with 9(4) (which rendered a foreign judgement unenforceable to the extent that it was inconsistent with Article 9) ruled out the possibility that it was open to the Royal Court to apply the doctrine of comity in giving effect to the English order.
Held:
Whilst the Royal Court found Articles 9(3) and 9(4) rather obscure, and did not feel the need to decipher their meaning, it was quite clear that they do not exclude the application of the doctrine of comity. The Royal Court stated that it would take very clear and express words to persuade it that the legislature intended to deprive the Royal Court of the flexibility to do justice in a wide range of cases on the basis of comity, a principal of almost universal applicability.
Having reviewed the English order the Royal Court, in the exercise of its discretion, could see no reason why, in interests of comity, substantial effect should not be given to the English order by ordering its own order in the same terms, subject only to minor qualifications and amendments. It must be remembered that the Royal Court’s focus when exercising its discretion is very different from that of the English Family court as Deputy Bailiff Birt explained in re the matter of the H Trust [2006]: "The Family Division is concerned to do justice between the two spouses before it…It has no mandate to consider the interests of the other beneficiaries of any trust involved. Conversely [the Royal Court] is sitting in its supervisory role in respect of trusts…[and its]…primary consideration is to make or approve decisions in the interest of the beneficiaries."
Post-Script Comments by the Royal Court:
The Bailiff expressed, with some diffidence, the hope that English courts might in the future exercise judicial restraint and refrain from invoking their jurisdiction under section 24 of the Matrimonial Causes Act 1973 to vary a Jersey trust. He pointed out that the Royal Court has shown itself sensitive to perceived interference with its jealously guarded jurisdiction to supervise Jersey trusts (such comments being made in Lane v Lane [1985-86], Re. Rabaiotti 1989 Settlement [2000], Re. The Foundation Trust [2005]), but this does not mean it is carefree to the reasoned decisions of other courts exercising a matrimonial jurisdiction. He again quoted Deputy Bailiff Birt in re the matter of the H Trust [2006]: "The observations which we have made do not lead to the conclusion that this Court will ignore a decision of the Family Division or other overseas court. Far from it. That court will have investigated the matter very fully and will have made a decision intended to achieve a fair allocation as between the spouses. In such cases the interests of comity as well as the interests of the beneficiaries will often point strongly in favour of this Court making an order which achieves the result contemplated by the order of the Family Division. Indeed this Court has made such orders in the past and will no doubt do so again in the future."
The Bailiff proposed that the English courts could request the Royal Court to be auxiliary to them in matrimonial matters involving Jersey trusts, similar, for example, to the collaborative approach adopted by courts exercising jurisdiction in relation to insolvency to prevent sterile argument, expense to the parties and inconsistent judgements.
Comment:
The Bailiff clarified that the Trusts (Amendment No.4) (Jersey) Law 2006 did not deprive the Royal Court of the doctrine of comity to give practical effect to a foreign judgement in respect of Jersey trusts by making its own orders in the same or similar terms.
Unfortunately the Bailiff did not comment upon how he sees a collaborative approach between English and Jersey courts working. From a trustee’s perspective such a approach should ideally involve their non-submission to the English court, but in certain circumstances a trustee may be directed to submit to the English court.
Whilst it is not clear from the judgement why the Royal Court gave directions to the Trustee to submit to the English court during matrimonial proceedings, it is interesting that the Royal Court enforced the English order, with qualifications, on the basis of comity when Deputy Bailiff Birt expressed the consequences of submission in re. the matter of the H Trust [2006] as "…the overseas order is likely to be enforced without reconsideration of the merits". One possible explanation is that it could be argued that Article 9(4) prevents enforcement of a foreign judgement and therefore the Royal Court made its own order to eliminate the risk of an appeal on those grounds.
However, the Trustee has kindly confirmed to us the reasons, in the circumstances of the case, why the Trustee was directed to submit to the English court. Firstly the trust’s assets consisted of immovable property sited in the United Kingdom upon which the English Courts could make orders directly. Secondly there were other beneficiaries (apart from the divorcing couple) in which it was in their interests that the Trustee give some evidence concerning the operation of the trust and prevent unduly prolonged proceedings.
THIS ARTICLE IS FOR INFORMATION PURPOSES ONLY AND NOT BY WAY OF LEGAL ADVICE. PROFESSIONAL LEGAL ADVICE SHOULD BE SOUGHT BEFORE ANY ACTION IS TAKEN.