Belen Clarisa Velutini Perez v Equiom Trust Corporation (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Master Kaye |
| Judgment Date | 29 November 2022 |
| Neutral Citation | [2022] EWHC 2996 (Ch) |
| Docket Number | Case No: PT-2021-001062 |
| Court | Chancery Division |
[2022] EWHC 2996 (Ch)
Master Kaye
Case No: PT-2021-001062
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUST AND PROBATE
Rolls Building
7 Rolls Buildings, Fetter Lane,
London, EC4A 1NL
Andrew Twigger KC AND Timothy Sherwin (instructed by Mishcon de Reya) for the Claimant
Eason Rajah KC AND James MacDougald (instructed by Sinclair Gibson) for the Defendants
Hearing dates: 13 and 22 June 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email.
Belen Clarisa Velutini Perez (“ Ms Velutini” or “ the claimant”) is 98 years old and wealthy. She has no children, no immediate family, and is unmarried. She has health, sight and mobility issues.
Her wealth and her family's wealth derive from the Velutini family's involvement in Venezuelan banking which dates back to the 16 th Century. This hearing was concerned with assets which have been held within trust structures since about 2011 and are said to have a value of between US$30m and US$50m (“ the Assets”).
The BCV Foundations Trust, a revocable English-law settlement was formally established on 15 April 2021 (“ the Trust”) to replace previous trusts, Betlemitica No3 and Betlemitica No4 (“ the Previous Trusts”). The defendants were the trustees of the Trust (“ the defendants” and “ the Former Trustees”). By a deed dated 8 November 2021 ( “the Revocation”), Ms Velutini revoked the Trust. She subsequently set up the BCV Trust (“ the New Trust”) on substantially the same terms as the Trust, including in respect of its beneficiaries, save that the New Trust was irrevocable. The new trustees of the New Trust were Geneva Trust Company (GTC) SA (“ GTC”).
Medical evidence obtained on behalf of Ms Velutini confirmed that she did not lack capacity to make the decisions she made in November 2021 including the decision to revoke the Trust. Further medical evidence in December 2021 confirmed that she had capacity to litigate at the time this claim was issued.
The Claim:
This was the disposal hearing of a CPR Part 8 claim brought by Ms Velutini dated 10 December 2021 seeking direction from the court pursuant to CPR 64 and by which Ms Velutini sought (i) a declaration that she had revoked the Trust by the Revocation, and that consequently the Former Trustees held the Assets on bare trust for her and at her direction; (ii) an order that the Former Trustees transfer those Assets to GTC, alternatively to Ms Velutini by a specified date; (iii) all necessary and/or consequential orders, accounts, and enquiries which for the purposes of this application included (a) the level of the retention the Former Trustees were to be permitted to retain and (b) whether the Former Trustees should be entitled to rely on their indemnity; and finally (iv) costs.
On 15 December 2021, the Former Trustees acknowledged that the Trust had been validly revoked by the Revocation and that they were obliged to transfer the Assets to GTC. In their Acknowledgment of Service dated 21 December 2021 the Former Trustees confirmed that they did not contest the valid exercise of the power to revoke the Trust and that they were willing to transfer the Assets to GTC on provision of appropriate and reasonable indemnities.
On 17 December 2021, the claimant acknowledged that the Former Trustees were entitled to be reimbursed for costs and expenses reasonably incurred in the administration of the Trust but joined issue with them in relation to the costs of this claim. Ms Velutini still sought a declaration arguing that in light of the Former Trustees challenge to the Revocation a declaration was of utility and would remove any doubt about the validity of the Revocation for the benefit of both the claimant and the Former Trustees.
The claimant is represented by Mr Twigger QC and Mr Sherwin instructed by Mishcon de Reya (“ MdR”) and the Former Trustees are represented by Mr Eason Rajah QC and Mr MacDougald instructed by Sinclair Gibson (“ SG”). By the time this judgment was handed down Mr Rajah and Mr Twigger had become KCs. I am grateful for their detailed written and oral submissions which I have taken into account together with the written evidence and documents even if I have not set out all the evidence or each and every argument or point raised.
The witness evidence in support of the claim ran to six witness statements and exhibits as follows:
i) The first witness statement of Ms Velutini dated 3 December 2021 (“ Velutini 1”)
ii) The first witness statement of Ms Rebeca Campos dated 8 December 2021 (“ Campos 1”)
iii) The second witness statement of Ms Campos dated 28 January 2022 (“ Campos 2”)
iv) The first witness statement of Mr Peter Steen of MdR dated 10 December 2021 (“ Steen 1”)
v) The second witness statement of Mr Steen dated 28 January 2022 (“ Steen 2”)
vi) The third witness statement of Mr Steen dated 16 May 2022 (“ Steen 3”)
The witness evidence in response to the claim consisted of three witness statements and exhibits as follows:
i) The first witness statement of the Earl of Balfour (“ Lord Balfour”) dated 17 January 2022 (“ Balfour 1”)
ii) The second witness statement of Lord Balfour dated 4 March 2022 (“ Balfour 2”)
iii) The third witness statement of Lord Balfour dated 16 May 2022 (“ Balfour 3”)
In addition to the witness evidence there was a substantial bundle of documents which primarily consisted of correspondence and documents generated or exchanged between the legal teams, the Former Trustees, GTC and others since the Revocation and relating to these proceedings and the transfer of the Assets.
This hearing was part heard and further correspondence and documents were generated both during the first hearing and between the first hearing and the second hearing.
Everyone involved with this claim says that they are acting in the best interests of Ms Velutini and to protect her and the Assets. Standing back it is therefore surprising that a dispute such as this should need the court's intervention.
The witness evidence and accompanying documents and the inter partes correspondence are primarily focussed on explaining each party's approach to this dispute whilst seeking to allocate “blame”, “poor” or “hostile” behaviour to the other party. Lengthy and copious as that evidence and correspondence was, it provided very limited assistance overall and provided more heat than light.
Ms Velutini was entitled to expect the Former Trustees and GTC to resolve these types of issues in a cooperative, reasonable and proportionate manner in the best interests of her and the other beneficiaries, her charitable foundations, without the need for court intervention or the expenditure of substantial costs.
And substantial costs have been expended even before one considers the handover costs. The combined costs schedules for this Part 8 claim come to in excess of £500,000.
Background
Ms Velutini was introduced to Lord Balfour in the early 2000s by Charles Rack (“ Mr Rack”), who is a distant relative of the claimant. Ms Velutini subsequently appointed Lord Balfour to manage Ursus Investments Inc (a Bahamian company) (“ Ursus”). He continued to manage Ursus after he set up his own professional trust business known as Virtus Trust (“ Virtus”) in 2005.
In about 2007 Ms Velutini was advised that she should establish a trust during her lifetime to enable her to retain some control over her wealth during her lifetime but be able to benefit the charitable foundations she had set up, after her death. The Previous Trusts were established by Ms Velutini for that purpose, with the assistance of Lord Balfour, in about April 2011. Ms Velutini was therefore not only the original settlor but one of the beneficiaries.
The Previous Trusts were New Zealand trusts governed by New Zealand law. The trustees were initially Virtus Trust NZ Ltd. Lord Balfour and Virtus subsequently merged with Equiom in 2017, which includes the defendants. Equiom Trust (NZ) Ltd (which is not a defendant) became the trustee of the Previous Trusts (“ the Previous Trustees”). Lord Balfour remained a constant in the relationship with the claimant, continuing to manage the assets held in the Previous Trusts and the Trust for the claimant through his role in Virtus and subsequently Equiom.
The majority of the Assets were held through a structure that involved New Zealand limited liability partnerships holding shares/interests in other corporate entities. The underlying assets were primarily situated in Venezuela and actively managed by Ms Velutini and her private family office from Caracas on a day to day basis. This included, for example, local companies such as Inversiones Altano CA (“ Altano CA”) a Venezuelan company whose shares were held by Inversiones Altano LP (a New Zealand limited partnership) (“ Altano LP”) and whose director was the claimant.
Both Ms Velutini and Lord Balfour describe themselves as having had a good business relationship at least until recently.
Mr Rack worked at Banca Mora-Boreal. Ms Velutini explains that they developed a good relationship so that when Mr Rack expressed an interest in becoming more involved in her affairs, she asked him to advise on the investment of some of the Assets. He became involved in providing investment advice to her and the Previous Trusts and then the Trust and managing a substantial investment portfolio. His role was not however limited to advice on investments.
In about early...
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Belen Clarisa Velutini Perez v Equiom Trust Corporation (UK) Ltd
...to these costs decisions and my findings are set out in my judgment dated 29 November 2022, the neutral citation for which is [2022] EWHC 2996 (Ch) (“ the Judgment”). The Judgment includes a number of defined terms with which the parties are familiar. I will use the same defined terms in t......