Womble Bond Dickinson (Trust Corporation) Ltd (as trustee of the Stephris Trust) v No Named Defendant
| Jurisdiction | England & Wales |
| Judge | Master Brightwell |
| Judgment Date | 13 January 2022 |
| Neutral Citation | [2022] EWHC 43 (Ch) |
| Docket Number | Case No: PT-2021-000023 |
| Court | Chancery Division |
[2022] EWHC 43 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
DEPUTY Master Brightwell
Case No: PT-2021-000023
Adam Cloherty (instructed by Womble Bond Dickinson (UK) LLP) for the Claimant
Heather Murphy (instructed by Womble Bond Dickinson (UK) LLP) as the Advocate to the Court
Hearing date: 22 July 2021
Draft judgment sent to parties: 24 November 2021
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.
Introduction
In 1986, Stephenson Clarke Shipping Limited (“Stephenson Clarke”) was a subsidiary of Powell Duffryn plc, and thus a member of the Powell Duffryn group of companies (“the PD Group”). The PD Group was a well-known shipping and logistics business whose roots can be traced to the 19th century, part of which latterly came to be known as PD Ports.
By a trust instrument dated 29 April 1986, Stephenson Clarke as the named settlor settled cash and defined securities on a discretionary trust for the benefit of employees and former employees of the PD Group, in terms which are considered later in this judgment. The three original named trustees were John Raymond Carr, Geoffrey Walker and John Peter Seagrave. The trust is known as the Stephris Trust (“the Trust”).
Even though a business still operates under the name of PD Ports, Powell Duffryn plc was first delisted, and then dissolved on 14 December 2016. Up until a deed of retirement and appointment (“DORA”) made on 1 November 2018, the trustees of the Trust were individuals connected to the former PD Group.
Before executing the DORA, the former trustees recorded their thoughts in relation to their retirement in a resolution document. There were doubts as to the construction of the Trust and thus as to the identity of the Beneficiaries. They did not consider the Trust to be viable in the long term for the relief of hardship suffered by the Beneficiaries and it was probably appropriate for the trustees to take steps towards winding up the Trust, which would require a significant amount of work and legal advice, including in overseeing an application to court and consideration of the eventual winding up of the Trust.
By the time the DORA was executed, by which the current trustee, Womble Bond Dickinson (Trust Corporation) Limited, was appointed as an independent trustee, the former trustees had already obtained the advice of Mr Adam Cloherty, who continues to represent the current trustees. I have been assisted by his opinion dated 27 March 2018 and the instructions for it. His submissions on behalf of the current trustee are essentially those contained within his 2018 opinion.
Procedural background
Permission was sought to issue the claim form under CPR Part 8.2A, or Practice Direction 64B paragraph 4.3, without naming any defendant. At the first hearing of the claim on 18 March 2021, Master Pester gave permission for it to proceed in that form, directing that notice of the claim be served on the former trustees, together with the claim form and evidence in support. He also directed that if none of the former trustees indicated their willingness to be joined as a party the Claimant's solicitors were to instruct independent counsel, i.e. effectively as an Advocate to the Court, so as to ensure that all arguments were fully presented. This direction was not made pursuant to Practice Direction 3G, which involves a request to the Attorney-General. Paragraph 2 of the Practice Direction, however, provides that such an appointment will be made by the Attorney-General “in most cases”. A claim involving the supervisory jurisdiction of the court in relation to trusts, where the advocate is appointed in place of a representative beneficiary, and where the cost is to be borne by the trust fund in question, would seem to be an appropriate case for the appointment by the court and for the choice of counsel to be made by the trustee's solicitors. This was a case where there did not at the outset appear to be an obvious individual to represent the Beneficiaries generally.
Nonetheless, one effect of this way of proceeding is that no representation order has been made. Such an order can be made at the end of the proceedings: see IBM United Kingdom Pensions Trusts Ltd v Metcalfe [2012] 3 Costs LO 420 at [24] (Warren J). It will be a matter for the trustee whether it wishes to seek a representation order following the handing down of this judgment and before the trust is wound up.
Ms Heather Murphy was instructed to fulfil the role of Advocate to the Court, and I am satisfied that the Court has been given full argument on the points which require to be determined.
The Trust
By clause 4 of the Trust instrument:
“The Trustees shall during the Trust Period [being the period expiring eighty years from the date of the Trust] hold the Trust Fund and the income thereof UPON TRUST as to either capital or income or both capital and income for or for the benefit of all or such one or more of the Beneficiaries at such age or time or respective ages or times and if more than one in such shares for such periods and with such trusts for their respective benefit (including either protective trusts or discretionary trusts of capital and income exercisable from time to time at the discretion of the Trustees or of any other person) and generally in such manner in all respects as the Trustees (not being less than two in number or being a Trust Corporation) shall in their absolute and uncontrolled discretion from time to time during the Trust Period determine (having due regard to any rule governing remoteness of vesting)….”
The Beneficiaries are defined in clause 1(h) as follows:
‘“the Beneficiaries” means the employees and their spouses and dependants and the former employees and their spouses and dependants from time to time during the Trust Period of the Powell Duffryn Group….’
The Powell Duffryn Group is then defined in clause 1(l):
‘“Powell Duffryn Group” means Powell Duffryn plc and any holding Company or subsidiary Company (as defined in section 735 of the Companies Act 1985) of Powell Duffryn plc.’
Clause 6 provides default trusts for those Beneficiaries living at the end of the Trust Period and to take effect then, with the proviso that “On the expiry of the Trust Period…should there be no such Beneficiaries who are alive and capable of taking the Trustees shall hold the capital and income of the Trust Fund UPON TRUST for such Charities [as defined] as the Trustees shall in their discretion determine”. In the event there were now no Beneficiaries in existence, therefore, there would be a resulting trust of income until the end of the Trust Period, unless the gift to charity were accelerated. In light of my decision on the construction of the Trust this point does not require to be determined.
The current value of the Trust assets is approximately £900,000. This includes the value of two Royal Albert Hall debentures, which as at July 2021 were being marketed for sale at £290,000 (although the trustee was considering reducing the sale price).
Evidence given on behalf of the current trustee by its solicitor, Ms Emily Pike, explains that she has made enquiries of the former trustees, who do not believe that any substantial distributions have been made in the last 15 years or so, although funds have been used on occasion to make small hardship payments or to provide holidays or hampers to Beneficiaries. The last payments to Beneficiaries appear to have been made in the year to 5 April 2009 (despite the fact that the accumulation period applicable to the Trust expired in 2007). When payments were made by the former trustees, it is unclear how the Beneficiaries were defined, although Ms Pike states that the former trustees had made attempts to research the history of the Powell Duffryn group and to identify potential Beneficiaries.
Ms Pike also explains that the current trustee was required to regularise the tax affairs of the Trust, and that HM Revenue and Customs accept that this has now been completed.
It is also of some relevance that there was at one time in existence another trust, also called the Stephris Trust, established by a trust instrument dated 1 August 1928 made by inter alios Mr (later Sir) Ralph Stephenson Clarke, declaring trusts over the sum of £3,070 and over property in Wembley, London conveyed to the original trustees on the same date by Stephenson Clarke & Co Ltd (acting by its liquidators in voluntary liquidation) and Stephenson Clarke and Associated Companies Ltd. By clause 2 of this trust instrument, the trustees declared that they held the trust premises until sold “to permit the committee and the members to use the same free of rent for the purposes of” the Stephris Tennis Club. There is no perpetuity period applicable to this trust, nor any provision requiring the trust property to vest in ascertainable objects at any time. This trust appears to have been administered until the 1980s although, as I will mention later, the lack of perpetuity period suggests that it was likely void.
A memorandum dated 29 April 1966 on the notepaper of Stephenson Clarke Ltd and addressed to ‘All members of the Staff at Branch Offices’ reads as follows:
“1. The Stephris Trust was founded in 1928 for the benefit of the employees of Stephenson Clarke Limited and the Maris Export and Trading Co. Limited: a tennis Club was provided at Wembley, Middlesex, for the use of the London based staff...
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