Guernsey: Royal Court Determines Guernsey’s First Public Trustee V Cooper Category 3 Type Application


Carey Olsen's Guernsey litigation team achieved success in an application before the Royal Court of Guernsey recently in what is believed to be a first application of its kind to be determined in this jurisdiction.  The application was made on behalf of Kleinwort Benson (Guernsey) Trustees Ltd in its capacity as trustee of a major unit trust which had been promoted widely in the continent of Europe.  There were over 360 investors represented in these proceedings by a Court appointed representative.  The Application was one that is commonly known as a Public Trustee v. Cooper category 3 type, after the English decision of the same name, whereby a trustee surrenders its discretion to the Court which thereupon makes the actual decision affecting trust assets and beneficiaries.

Partner John Greenfield, Senior Associate Wendy Lewis and Associates Jamie Oldfield and Luke Sayer were the team from Carey Olsen's Guernsey office who successfully acted for the Trustee.

The Facts

The Arasbridge Unit Trust (the "Trust") is a multi-class open-ended unit trust which was constituted by Trust Instrument dated 17 November 2006.  The Trust was initially authorised by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 but following concerns regarding the accuracy of (inter alia) the Net Asset Value ("NAV") calculations, the Trust was suspended.

Prior to that, following the general worldwide economic downturn, certain of the sub funds had already been suspended.  This, coupled with the concerns over the accuracy of certain of the documentation, left three specific issues to be decided on as to the exact nature of certain of the investors' funds and in particular in which investment they should be deemed to have participated.

Carey Olsen, on behalf of the Trustee, filed an application on 23 June 2014 seeking directions under sections 68, 69(1)(a)(i) (iii) and (iv), 69(2)(b) and 71 of the Trusts (Guernsey) Law, 2007 and Rule 35 of the Royal Court Civil Rules 2007. 

The application was filed on the basis that in each of the three residual issues to be resolved, whatever decision was reached would have the effect of favouring one group of investors of the Trust at the expense of another group.  The Trustee could not therefore fulfil the fiduciary obligations owed by it to all the

The Judgment

The Judgment was handed down on 15 January 2015.  The Court acknowledged that it is a well-established principle that a trustee faced with a conflict of interest that "disables" it from acting may surrender its discretion to the Court.  The Court was satisfied on the facts that this was an appropriate case for the Trustee to surrender its discretion on the outstanding issues given (1) that any decision taken by the Trustee would have the effect of favouring one group of investors at the expense of another group, and (2) that the Trustee was in a situation where, if it were to take a decision on these issues there would be a perception, or a real risk of a perception, that it was acting in its own interests.  Further, the Court considered that the Court-appointed Representative of the investors of the Trust was faced with a similar dilemma given that he represented the entire body of investors and owed duties to each and every one of them such that he could not recommend a course of action that favoured one group of his constituents at the expense of another group. 

Having decided that the Court itself was going to make the decision it then had to consider what guiding principles to apply in making it.

Overall, the Court took the view that it must reach a decision which was as fair as possible and certainly one that was "just and equitable" whilst recognising that it could not be fair to each and every investor.

At paragraph 25 of the Judgment, the Court cited with approval a passage from Lewin on Trusts (18th edition), as follows:

"Where the trustees surrender their discretion to the court, it acts in their place by giving directions.  In doing so, the court will act as a reasonable trustee could be expected to act having regard to all the material circumstances and is not bound by the wishes of any beneficiary.  The court has, however, no greater powers than the trustees have either under the trust instrument or under the general law."

In arriving at its conclusions, the Court looked at what could be considered as the legitimate expectations of the different classes of investors and what should have happened in respect of their invested funds, noting any practical impediments such as the impossibility of carrying out the investors' wishes in respect of their investments even if due to events outside the investors' control – whether due to economic circumstances or otherwise.


The acceptance of the surrender of the trustee's discretion to the Court under the third category of case identified in the leading UK decision of Public Trustee v. Cooper is a first for Guernsey.

This decision will provide some comfort to professional trustees of the availability of a remedy in Guernsey when they are faced with the difficult situation where a decision needs to be taken in circumstances where there are beneficiaries (or the Trustees themselves) with conflicting interests. 

The decision only serves to strengthen Guernsey's reputation as a leading jurisdiction for being capable of resolving issues arising from trust and private client work.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
24 Oct 2018, Conference, St Peter Port, Guernsey

The Fund Finance Association is a non-profit industry association in the fund finance market that aims to educate members, legislators, regulators and other constituencies about the fund finance market.

13 Nov 2018, Conference, St Peter Port, Guernsey

SuperInvestor is part of the SuperReturn Series - the world's leading private equity events.

6 Dec 2018, Conference, St Peter Port, Guernsey

The definitive funds event of the year will include insights and predictions from over ten industry experts from both the Channel Islands and Europe

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions