Robert Sofer v SwissIndependent Trustees SA

JurisdictionEngland & Wales
CourtChancery Division
JudgePaul Matthews
Judgment Date02 August 2019
Neutral Citation[2019] EWHC 2071 (Ch)
Date02 August 2019
Docket NumberCase No: E31BS029

[2019] EWHC 2071 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN BRISTOL

PROPERTY, TRUSTS AND PROBATE LIST (ChD)

Bristol Civil Justice Centre

2 Redcliff Street, Bristol, BS1 6GR

Before:

HHJ Paul Matthews

(sitting as a Judge of the High Court)

Case No: E31BS029

Between:
Robert Sofer
Claimant/Respondent
and
SwissIndependent Trustees SA
Defendant/Applicant

Richard Wilson QC and James Weale (instructed by RadcliffesLeBrasseur) for the Applicant

Leslie Blohm QC (instructed by Burges Salmon) for the Respondent

Hearing dates: 22–23 May 2019

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.

Paul Matthews HHJ

Introduction

1

This is my judgment on two applications in this claim before the court. The first in time is an application by the defendant by notice dated 3 December 2018, for an order that the claim be struck out pursuant to CPR rule 3.4(2); alternatively that the defendant be granted summary judgment pursuant to CPR part 24; and in any event for the costs of the application. The second application is by the claimant, by notice dated 16 May 2019, for an order that the claimant be permitted to amend his particulars of claim pursuant to CPR rule 17.1(2)(b) in the form of the draft attached to the notice, and that the defendant pay the claimant's costs of the application.

2

Both applications arise in the context of a claim commenced by Part 7 claim form issued on 25 September 2018 by the claimant, who lives in the state of Victoria, in Australia, against the defendant, a Swiss incorporated and resident company carrying on business as a professional trustee. The orders sought by the claimant are (1) that the defendant be replaced as trustee of a trust called the Puyol Trust, (2) that the defendant pay compensation to that trust, (3) for declarations as to the nature of payments made out of the trust, (4) for further or other relief, and (5) for costs. The claim arises out of the defendant's trusteeship of the Puyol Trust following its creation by a settlement dated 25 July 2006, and what is alleged by the claimant to be the defendant's breach of trust.

3

The defendant's application is supported by the witness statement of Nigel West (its external solicitor) dated 3 December 2018, and two witness statements of Andrew Bayles (its general counsel) dated 10 May 2019 and 21 May 2019 respectively. It is opposed by two witness statements of the claimant, dated 11 April 2019 and 18 April 2019 respectively. The claimant's application is supported by written evidence from Kevin Kennedy (his solicitor) contained in the application notice itself. It is slightly complicated by the fact that, when these applications came on for hearing on 28 May 2019, I was given a revised draft amended particulars of claim. Mr Wilson QC, for the defendant, told me that this had been handed to him just a few minutes before I came into court, and that he had not at that stage had the opportunity to read it. Mr Blohm QC told me that he seeks permission to amend the particulars of claim in this revised form. I will have to come back to this development later.

4

I also record here that I was not asked to order cross-examination of any witness, and none was tendered for cross-examination. In the absence of cross-examination, the court is not entitled to reject any written evidence as being untrue, unless on the basis of all the evidence before the court it considers that that written evidence is simply incredible: see eg Long v Farrer & Co [2004] BPIR 1218, [57]–[61], applied in Shierson v Vlieland-Boddy [2005] 1 WLR 3966, CA, [56], Coyne v DRC Distribution Ltd [2008] EWCA Civ 488, [58]. I should say that I was not invited to disregard any of the written evidence on that basis, and do not do so.

Background

5

The background to this claim is to be found in the first witness statement of the claimant and also in the witness statement of Mr West. For present purposes, I can set it out as follows.

6

The claimant's father, Mr Hyman Sofer, was born in South Africa, where he was a successful bookmaker and investor. He married his first wife Sophie and had two children, a daughter, Tamara (now aged 72 years) and the claimant (now aged 69 years). Hyman Sofer divorced Sophie in 1966. She is now dead. He remarried in 1972 but divorced his second wife in 1987. Later that year, then aged 69 years, he moved to Australia, where he had a long-term relationship with another lady until 2014 (although they never married). Hyman Sofer died in Sydney, Australia, on 8 July 2016, aged 97 years.

7

Tamara married Kenneth Wolpert in about 1975. They have three adult children, all born in South Africa, all of whom now also have children of their own. They all moved to Australia in 1989. The claimant moved to Australia in 1987, where he married his wife Dorothy. They have no children, although his wife has two children from a previous marriage. Relations between the two siblings (and between their respective families) are cool. There is some evidence that they do not see eye to eye, though for present purposes nothing turns on that.

8

It appears that Hyman Sofer not only managed to make a good deal of money, but also at some point (like many South Africans at the time) to move it out of South Africa, in his case to Switzerland. The precise timing and method of doing this is not in evidence. He had a number of financial and other advisers in Switzerland, as well as in South Africa or (later) Australia.

The trusts

Creation

9

On 25 July 2006, when Hyman Sofer was 88 years old, he created a new trust structure to hold his wealth, replacing an existing trust structure that had been set up previously by an Australian law firm, and which pre-dated the involvement of the defendant as trustee. In the new trust structure, set up by a different Australian law firm, Clayton Utz, there were four trusts in all. These were named the Jordi Unit Trust, the Gabri Trust, the Puyol Trust, and the Xavi Trust. I am told that these trusts were named after footballers of the Barcelona Football Club. The defendant was trustee of all four trusts. A BVI company which Hyman Sofer controlled, Cilantro Holdings Ltd (“Cilantro”), acted as formal settlor, settling the sum of US$10 on the trusts of each trust, to which of course further assets would be added in due course. The Jordi Unit Trust was essentially a holding vehicle, whose function was to hold the investments. The assets from the earlier trust structure were transferred to the new one. Beneficial entitlement to share in the trust fund which the Jordi Unit Trust held was divided into units, which were initially allocated to Cilantro. The other three trusts were ultimately to hold the units in the Jordi Unit Trust for the benefit of the intended beneficiaries. I call these trusts the “beneficiary trusts”.

10

On 8 September 2006 Cilantro transferred certain of its units in the Jordi Unit Trust to the defendant as trustee of the Puyol Trust (and similarly in relation to the other beneficiary trusts). Subsequently, these units were substituted by other units, but nothing turns on that. It is accepted that ultimately the Puyol Trust was entitled to one third of the value of the Jordi Unit Trust. Since about that time, Camelia Finance Holdings Ltd, a company incorporated and resident in the British Virgin Islands, has acted as the nominee of the defendant as trustee of the Jordi Trust, and in that capacity has by virtue of an express written agreement held all of the assets of that trust on behalf of (and on trust for) the defendant.

11

The form of each of the three beneficiary trusts was entirely discretionary. No person had a fixed interest. Nevertheless, at the time of creation, the Puyol Trust was apparently intended to benefit the claimant and his wife, whereas the Gabri Trust and the Xavi Trust were apparently intended in the longer term to benefit Tamara and her husband on the one hand, and their children on the other. So Tamara's family would have twice as much as the claimant's. However, the casual reader of the trust documents at the time of execution would not have thought so.

Terms

12

The terms of the three “beneficiary” trusts provided for two classes of beneficiary, “Specified Beneficiaries” and “General Beneficiaries”. When the trusts were executed, the class of “Specified Beneficiaries” consisted of the then youngest partner of the law firm of Linklaters in London, England, and the then youngest partner of the law firm of Blake Cassells and Gradon LLP in Calgary, Canada. The “General Beneficiaries” were essentially the closest relatives of the Specified Beneficiaries (although certain other persons connected with those relatives were also General Beneficiaries, and there was also power to appoint further such beneficiaries). It goes without saying that neither Tamara nor the claimant had any connection with the youngest partners in the law firms mentioned. However, the trustee of each trust had power, under clause Q1 of the terms of the respective trust instrument, to add further persons to the class of “Specified Beneficiaries”. In relation to the Puyol Trust, that power was exercised by a deed of 23 August 2006 ( ie less than one month after creation of the trust). This added Hyman Sofer as a Specified Beneficiary of the Puyol Trust, and thereby made the claimant, Tamara and their respective issue General Beneficiaries of the trust.

13

I should also mention that, in the event that there are no beneficiaries in the class when the trust comes to an end, the draftsman seeks to avoid a resulting trust for the settlor by providing for the remaining assets to be held on trust for “the Final Repository”. This is the person (not being a member of the Excluded Class or an Excepted...

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1 cases
  • Robert Sofer v Swissindependent Trustees SA
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 5 June 2020
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