The recent judgment of the Representation re Dunlop Settlement delivered by the Royal Court of Jersey on 14 July 2011 demonstrates and re-emphasises the importance of providing all trust documentation and information to a new trustee.
In this case the Jersey Financial Crimes Unit ("JFCU") had seized trust documents which had been retained by a former director of the trustee of a Jersey proper law trust. The present trustee had taken office due to a merger with the pre-merger trustee. The JFCU was unwilling to release the seized documents back to the trustee without the consent of the former director or a court order. The former director failed to provide consent and therefore the trustee applied to the court seeking an order that the JFCU deliver the seized trust documents.
The Royal Court held that there was no doubt that the trustee was entitled to the seized documents and it was not relevant that they were now in the possession of the JFCU. The Court also said that it was irrelevant that the present trustee was the result of a merger with the pre-existing trustee as they are by law one and the same person.
In respect of costs, the Royal Court referred to the landmark case of Ogier Trustee Limited–v-C I Law Trustees  JRC 158 where the Court stipulated that the normal order for costs where a trustee fails in its duty to provide documents and information to an incoming trustee is an order for indemnity costs. This is a punishment upon the trustee for failing in its duty and to ensure the beneficiaries are not required to bear any costs for the trustee's failings. The Court extended the principal to this case regardless that the order sought by the trustee was against the former director responsible for the affairs of the trust on behalf of the trustee rather than the former trustee itself.
Therefore directors and employees of trust companies in Jersey should be careful to ensure that upon their trust company retiring from office, all original trust documentation and information is provided to the incoming trustee.
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