The Trust in question was known as the H Trust. The trustees
were a Mr Arthur (the "Individual
Trustee") and the settlor. The settlor experienced
difficulties in his relationship with the Individual Trustee and
decided he wanted to replace him. The settlor selected Church
Street Trustees Limited ("the New
Trustee"). The power of appointing new trustees
rested in the trustees for the time being. On 6 May 2009 lawyers
acting for the settlor wrote to the Individual Trustee indicating
that the New Trustee should be appointed the new trustee of the
Trust. There was no reply to this letter. A representation was
issued on 31 May 2009 before the Royal Court seeking an order
appointing the New Trustee together with disclosure of all relevant
trust documents. Following this, a meeting did take place at which
the Individual Trustee agreed to resign in favour of the New
Trustee. However, the Individual Trustee still failed to supply the
New Trustee with sufficient information to enable it to administer
the Trust causing the need for a hearing at which the Individual
Trustee failed to appear. The court was satisfied that he had been
made aware of the date.
Counsel for the New Trustee asked for two things, namely,
firstly, an order that the Individual Trustee should provide
further information about the Trust and secondly, for the costs of
the representation on an indemnity basis against the Individual
The court considered the application. The court noted that most
of the trust assets were in a company of which the Individual
Trustee was a director. These assets appeared to consist of loans
to various entities involved in a property development. Some draft
accounts had been produced showing that the loans existed. The
Court noted that following the Individual Trustee's retirement
some information had been produced but there were still large gaps.
The Court was satisfied that the sheet produced at the hearing
listing the missing information accurately set out what ought to
have been produced by the Individual Trustee.
In the case of Ogier Trustee Jersey Limited v CI Law
Trustees Limited and others (2006) JRC 158, it was
"On the transfer of a trusteeship the outgoing trustee
is under a duty to co-operate fully and actively in the transfer by
making all relevant documents and correspondence available promptly
to the incoming trustee and by providing any explanation to
questions reasonably raised by the incoming trustee".
The Court said that it was satisfied that the Individual Trustee
had failed to live up to the requirements described above.
Accordingly the Individual Trustee was ordered to produce the
information within 14 days from service. As to the second aspect of
the application, the court noted the history of failure by the
Individual Trustee to respond, and that accordingly the Individual
Trustee had forced the trust to incur these costs which would never
have been incurred had he complied properly and fully with his
duties as an outgoing trustee and accordingly it ordered indemnity
costs of and incidental to the representation against the
We are often asked to advise trust company clients on the
question of what documentation needs to be transferred on a
retirement and appointment of a new trustee. At a minimum, an
incoming trustee needs to have sufficient information to enable it
to properly administer the assets of the trust. The judgment in
this case is not novel but should be a timely reminder to trustees.
They will know what an incoming trustee is properly going to need
to administer the assets and unless this information is handed over
in a timely fashion, the retiring trustee is at risk of this type
of application with an order for indemnity costs against it.
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.
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