C v C & 5 Others
| Jurisdiction | England & Wales |
| Judge | Judge Hodge QC |
| Judgment Date | 19 May 2015 |
| Neutral Citation | [2015] EWHC 2699 (Ch) |
| Docket Number | Case No: HC/2015/001381 |
| Court | Chancery Division |
| Date | 19 May 2015 |
[2015] EWHC 2699 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
7 Rolls Building
Fetter Lane
London EC4A 1NL
His Honour Judge Hodge QC sitting as a Judge of the High Court
Case No: HC/2015/001381
Mr Francis Barlow QC appeared on behalf of the Claimant
Miss Susannah Meadway appeared on behalf of the Third and Fourth Defendants
Miss Georgia Bedworth appeared on behalf of the First, Second, Fifth and Sixth Defendants
This is my extemporary judgment on the substantive hearing of an application under the Variation of Trusts Act 1958 to vary the trusts of four family settlements and for the compromise of an issue as to the validity of the two most recent of those four family settlements. The judgment is delivered in the case of C v C, claim number HC-2015–001381. For the reasons that I gave in a preliminary extemporary ruling this morning, I have already made orders restricting access to the court file and anonymising these proceedings. Any reporting of this substantive judgment (which is permitted) should respect that earlier anonymisation order.
This application under the Variation of Trust Act 1958 relates to four family settlements. The first two of those settlements, dated 20 June 1932 and 1 September 1950, were made by the first defendant's late father. The third and fourth settlements are discretionary settlements made in 1996 by the first defendant himself.
The first and sixth defendants are trustees of each of the four settlements. The claimant is a trustee of the 1932 settlement alone, in addition to defendants 1 and 6. The claimant is the first defendant's son and the grandson of the settlor of the 1932 and 1950 settlements. He is a beneficiary of each of them. The second defendant is the wife of the first defendant and, with her husband, is a beneficiary of each of the settlements. Together with the claimant, they and the third and fourth defendants, who are minors, are the only living beneficiaries of the 1932 settlement. The fifth defendant is the first defendant's nephew and the only other living beneficiary of the 1950 and 1996 settlements. The sixth defendant is not a beneficiary of any settlement and is only interested in the matter as a trustee.
All six defendants have filed acknowledgments of service indicating their intention not to contest the proceedings. The third and fourth defendants, who are minors, are sons of the first defendant and are respectively 16 and 14 years of age. Their litigation friend is their mother on whose instructions the acknowledgments of service were filed.
The evidence in support of the application is contained within a witness statement from Mr Michael David Stanford-Tuck, dated 1 April 2015, together with exhibit MST1. He is a solicitor and consultant with the solicitors' firm Hallett and Co, of Ashford in Kent.
The litigation friend and mother of the third and fourth defendants has made a witness statement dated 11 May 2015 in which she indicates her support for the compromise of the settlement and her support of the proposed variations. She exhibits, as exhibit SAC1, a lengthy opinion from Miss Susannah Meadway (of counsel), dated 11 May 2015, setting out her reasons why, in her opinion, the proposed variation and compromise are for the benefit of the third and fourth defendants.
The sixth defendant, the independent trustee, has made a witness statement dated 14 May 2015. He exhibits as JSPC1 an opinion from Miss Georgia Bedworth (of counsel), dated 11 May 2015, in which she explains why, in her opinion, the compromise and proposed variation are in the interests of the unborn and any unascertained beneficiaries on whose behalf the court is being required to approve the variation.
There is also a short witness statement from Miss Gillian Knowles, the solicitor for the fifth defendant, at a firm in Chester, Cullimore Dutton, conveying his consent to the proposed compromise and variation. That witness statement is dated 11 May 2015.
The claimant is a represented by Mr Francis Barlow QC, who has produced a detailed written skeleton argument dated 15 May 2015. In addition, he addressed me for about an hour and three-quarters this morning, and for a further 45 minutes after the luncheon adjournment. I was then addressed by Miss Meadway (of counsel) for the third and fourth defendants, who addressed me for about 15 minutes by reference to her written skeleton argument dated 13 May 2015. Finally, I was addressed by Miss Bedworth (of counsel), appearing for the first, second, fifth and sixth defendants, who addressed me for about 20 minutes by reference to her written skeleton argument of 13 May 2015.
For the reasons set out in the two exhibited written opinions, for the reasons set out in the written skeleton arguments, and for the reasons advanced orally before me in argument by counsel today, I am indeed satisfied that the terms of the compromise are for the benefit of the minor defendants and the parties whom they have been appointed to represent, namely all unborn and unascertained persons who may become interested under the trusts of the settlements created in 1932 and 1996, save for any future wife and future born child of the first defendant, in relation to whom no representation order is being made. I approve the terms of compromise on behalf of the minor defendants and the represented parties. I direct that they shall be binding on them and that the claimant and the first and sixth defendants, in their capacity as trustees, should carry those terms of compromise into effect.
I am also satisfied that the proposed arrangement is for the benefit of the minor defendants and all unborn and unascertained persons who may become hereafter beneficially interested in the property subject to the trusts of any of the four family settlements. I am also satisfied that the arrangement does not give rise to a resettlement of the trust property subject to any of those settlements.
Therefore, insofar as I have the jurisdiction to do so, by section 1 of the Variation of Trusts Act 1958, I approve the proposed variation and arrangement on behalf of the minor defendants and all such unborn and unascertained persons.
The reason why I am delivering a substantive extemporary judgment is because what appears to be a novel point of law has been raised in relation to my jurisdiction to approve a variation of the 1950 settlement. That novel point of jurisdiction arises from the fact that the 1950 settlement is governed not by the law of England and Wales but by the law of Kenya. Although there is no express choice of law clause in the 1950 settlement, the settlor was domiciled in Kenya when it was made and a reference within it to the Trustee Ordinance 1929 clearly indicates an intention for it to be governed by Kenyan law. There are other substantial elements which connect the settlement with Kenya.
The trust assets are located in that country and the trustees and the beneficiaries, or most of them, are and were resident and domiciled in Kenya. That is not to ignore the fact that the 1950 settlement does have a very close connection with the earlier English settlement made in 1932 which owns substantial assets in Kenya, the majority of which are managed by a company owned and controlled by the trustees of the 1950 settlement. That 1932 settlement is also the subject of the present application, as are the other two 1996 associated settlements, all three of which are governed by English law.
There is before the court, at section 2.19 of the exhibit to Mr Stanford-Tuck's witness statement, an opinion letter from a lawyer and advocate based in Kenya, Mr R W M Watson, dated 27 March 2015. He gives evidence as to the terms of section 62 of the Kenyan Trustee Act, which was originally enacted in 1929 but which has been much amended since. Section 62 is said to give the court power to approve variations of trusts in terms which are said to be virtually identical to the 1958 Act in England. The wording of that section has been placed before the court.
Mr Watson states that although occasionally applications are made to the Kenyan courts in trust matters, he has found no reported case law on applications relating to their jurisdiction to vary trusts under section 62, which, he says, are brought in chambers. However, he says that since Kenyan law, and in particular the Kenyan law of trusts, is largely based on English law, the courts of Kenya would in his view follow English decisions on the virtually identical provisions of the English Variation of Trusts Act. For similar reasons, he also takes the view that if the English courts were to assume jurisdiction to vary the trusts of the Kenyan settlement, the Kenyan courts would recognise and enforce the order of the English courts. He concludes by mentioning that with a trust being such an essentially English concept, it would be almost inevitable for the courts of Kenya to look to the English common law — by which I think he includes the English law of equity — for assistance. He says that the idea of separating legal and beneficial ownership of assets is very alien to the non-statutory and indigenous laws in Kenya.
Mr Barlow submits that in those circumstances it would be appropriate for the court to exercise jurisdiction in this case. He has referred me to two English authorities which support the proposition that the court has jurisdiction under the 1958 Act to vary the trusts of a foreign settlement.
The first of those authorities is a...
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