Gomez and Others v Vives and Others

JurisdictionEngland & Wales
JudgeMR JUSTICE MORGAN,Mr Justice Morgan
Judgment Date18 February 2008
Neutral Citation[2008] EWHC 259 (Ch)
Docket NumberCase No: HC07C01676
CourtChancery Division
Date18 February 2008

[2008] EWHC 259 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Before:

Mr Justice Morgan

Case No: HC07C01676

Between:
(1) Jose Gonzalez Gomez
(2) Pablo Gonzalez Gomez
(3) Alvaro Gonzalez Gomez
Claimants
and
(1) Encarnacion Gomez-Monche Vives
(2) GB Investment Holdings Limited
(3) Walpart Trust Registered
(4) Ansbacher Trustees (Jersey) Limited
Defendants

Mr Nicholas Le Poidevin and Mr Tony Oakley (instructed by Farrer & Co) for the Claimants

Mr Peter Rees (of Debevoise & Plimpton LLP) for the 1 st Defendant

Hearing dates: 25 th & 28 th January 2008

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.

MR JUSTICE MORGAN Mr Justice Morgan

Introduction

1

On 26 th June 2007, the Claimants issued the Claim Form in this action. The Claim Form named four defendants. It contained a statement, on behalf of the Claimants, that the High Court of England and Wales had power under Council Regulation (EC) 44/2001 of 22 nd December 2000 to hear the claim. The proceedings were duly served on the First Defendant. On 18 th October 2007, the First Defendant applied for an order whereby the court would declare that it did not have jurisdiction, alternatively, would not exercise its jurisdiction, to try the claim. The application continued by seeking an order that the Claim Form be set aside or the proceedings be stayed. The ground put forward for the application were that the court did not have jurisdiction over the First Defendant under Council Regulation (EC) 44/2001, alternatively because Liechtenstein was a more appropriate forum in which to hear this claim.

2

The application involves the interpretation of Council Regulation (EC) 44/2001 of 22 nd December 2000 (“the Judgments Regulation”). In particular, the application requires the court to consider and to apply Article 5 (6) of the Judgments Regulation which, so far as material, is in these terms:

“A person domiciled in a Member State may, in another Member State, be sued:

(6) as settlor, trustee or beneficiary of a trust created by the operation of a statute, or by a written instrument, or created orally and evidenced in writing, in the courts of the Member State in which the trust is domiciled; …. ”

3

In addition to the questions as to the interpretation and application of Article 5(6), the First Defendant contends that even if the court has jurisdiction to determine the Claimants' claim against the First Defendant, the court has power to decline jurisdiction and should do so in favour of the claim being tried in Liechtenstein, which is said by the First Defendant to be a more appropriate forum.

The issues

4

The issues which arise can be summarised as follows:

(1) What trust or trusts are identified by the Claimants in the present case which come within the words of Article 5(6) which refer to: “… a trust created by the operation of a statute, or by a written instrument, or created orally and evidenced in writing …?”

(2) Is the relevant trust domiciled in England?

(3) In relation to the first part of the Claimants' claim against the First Defendant, is the First Defendant “sued……as beneficiary…”?

(4) In relation to the second part of the Claimants' claim against the First Defendant, is the First Defendant “sued….as…..trustee….”?

(5) If the court has jurisdiction under Article 5(6) in relation to all or part of the Claimants' claims, is it open to the court to decline jurisdiction on the grounds of forum non conveniens?

(6) If the answer to (5) is “yes”, should the court decline jurisdiction on that ground?

The declaration of trust

5

There was a written declaration of trust in this case on 11 th June 1984. The effective settlor of that declaration of trust was Alfredo Gonzalez Diez. The settlor died on the 16 th September 1991, intestate and domiciled in Spain. The First Defendant is the widow of the settlor. The First Defendant is domiciled in Spain. The settlor and the First Defendant had five children, all sons, and the Claimants are three of those sons.

6

The original trustee under the declaration of trust was Fidei Trust Company Limited, a corporation incorporated under the law of Jersey. The principal asset of the trust was certain shares in Gonzalez Byass & Co Limited a corporation incorporated under the law of the Cayman Islands. Gonzalez Byass is the well known producer of sherry. It is believed that the original trustee, Fidei Trust Company Limited no longer exists.

7

On 16 th September 1999, the party named as the Second Defendant in these proceedings, GB Investment Holdings Limited, a corporation incorporated under the law of the British Virgin Islands and the party named as the Fourth Defendant in these proceedings, Ansbacher Trustees (Jersey) Limited, a corporation incorporated under the law of Jersey, were appointed trustees of the trusts declared by the declaration of trust in place of Fidei Trust Company Limited. At that time, Ansbacher Trustees (Jersey) Limited was called St Helier Trust Company Limited. On 23 rd December 2002, the party named as the Third Defendant in these proceedings, WalPart Trust Registered, a corporation incorporated under the law of Liechtenstein, was appointed trustee of the trust declared by the declaration of trust in place of Ansbacher Trustees (Jersey) Limited. Accordingly, from 23 rd December 2002, the trustees of the trust declared by the declaration of trust have been GB Investment Holdings Limited and WalPart Trust Registered.

8

I was told that these proceedings have not been served on the Second, Third and Fourth Defendants and, indeed, the time permitted for service of the Claim Form on those defendants has now expired. Subject to an application to extend time for service which was made before that expiry.

9

The declaration of trust refers to Fidei Trust Company Limited as “the Trustee” and to Mr Gonzalez Diez as “the Settlor”. The declaration of trust recites that at the direction of the Settlor certain shares in Gonzalez Byass were transferred into the name of the Trustee to hold the same on the trusts of the declaration of trust, which the Trustee then proceeded to make.

10

The material terms of the declaration of trust are the following:

Clause 1

“In this Deed the following words shall have the following meanings:–

1.1 “Beneficiaries”: those persons resident outside the United Kingdom who are permitted by Article 28(B) of the Articles of Association of [Gonzalez Byass] to hold Ordinary Shares in [Gonzalez Byass].

1.2 Trust Fund: means the Shares, any further property added to these trusts, all income and capital gains of such Shares and other property and all property from time to time representing the same.

1.3 The Trust Period: the period from the date hereof until the death of the survivor of the Settlor and his wife.

1.4 The Appointor: any person or persons who shall be appointed as the Appointor revocably or irrevocably in writing by the Settlor (or his wife if he is incapacitated) or by his widow ….”

Clause 2

“The proper law of this Declaration of Trust shall be the law of England.”

Clause 3

“3.1 The Trustee shall not sell dispose of grant any security over transfer appropriate to a beneficiary or otherwise deal with the Shares otherwise than in accordance with Clause 4 below.

…”

Clause 4

“4.1 The Trustee shall hold the Trust Fund upon trust to pay or apply the same to or for the benefit of any one or more of the Beneficiaries in such shares and proportions (if more than one) and upon such trusts (if any) as the Settlor shall in his absolute discretion determine.

4.2 At the end of the Trust Period the Trustee shall hold any balance of the Trust Fund remaining subject to these trusts upon trust for the benefit of any one or more of the Beneficiaries in such shares and proportions (if more than one) … as the Appointor shall appoint within two years of the end of the Trust Period.

4.3 Subject to any appointment under Clause 4.2 above the Trustee shall at the end of the aforementioned two year period hold any balance of the Trust Fund remaining subject to these trusts upon trust for such of the sons of the Settlor as shall be living at the end of such two year period and if more than one in equal shares absolutely.

4.4 In accordance with Settlor's instructions the Trustee may during the period of twenty-one years from the date of this Deed accumulate any income arising under the trusts hereof and invest the same ….”

Clause 6

“The Settlor … or his widow after his death shall have the power to remove any trustee hereof and to appoint new or additional trustees hereof.”

11

The definition, in clause 1.1 of the declaration of trust, of the Beneficiaries refers to Article 28(B) of the Articles of Association of Gonzalez Byass. The Particulars of Claim plead that this Article included the following persons:

“Any lineal descendant (both male and female) of any male whose surname is Gonzalez Gordon ….”

The claim

12

The Particulars of Claim pleads that the three Claimants are lineal descendants of a male whose surname was Gonzalez Gordon. The Claim Form also gives the addresses of the First, Second and Third Claimants as being addresses in Spain, Portugal and the United States of America, respectively. Accordingly, they plead that they are Beneficiaries under the declaration of trust.

13

The Claim Form pleads that the First Defendant “is beneficially interested” in the trusts pursuant to the declaration of trust of 11th June 1984. However, at the hearing, the Claimants wished to reserve their position on the question whether the First Defendant was a Beneficiary within the definition in clause 1.1 of the declaration of trust. Nonetheless, the Claimants wished the court to proceed on the basis that the First Defendant was...

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