Andrew Popely v Ayton Ltd and Others
| Jurisdiction | St Vincent and the Grenadines |
| Judge | THOM, J (IN CHAMBERS) |
| Judgment Date | 13 October 2008 |
| Judgment citation (vLex) | [2008] ECSC J1013-1 |
| Date | 13 October 2008 |
| Court | High Court (Saint Vincent) |
| Docket Number | CLAIM NO. 1 OF 2005 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
HIGH COURT CIVIL
CLAIM NO. 1 OF 2005
Mr. S.K. John and Mr. A. John for the Claimant
Mr. P.R. Campbell Q.C. and Mr. M. Peters for the Defendant
On March 15, 2007 His Lordship Justice Bruce-Lyle ordered inter alia that the following preliminary issues be determined by the Court before trial of the substantive action:
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"1. Whether the Notice of Appointment dated 1st December 2006 given by the 4th Defendant to the 3rd Defendant in purported exercise of the powers of the settlor under clause 7.2 of the Blue Ridge Trust is improper, void and of no effect.
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2. Whether or not John Popely's letter of 6th December 2006 was effective to remove the 3rd Defendant as Trustee of Blue Ridge Trust and to appoint Cosmos Trust Ltd. in its place."
The Claimant is one of the beneficiaries of the Blue Ridge Trust which the Fourth Defendant purported to remove by the Notice of Appointment dated 1st December 2006. Blue Ridge Trust is an international Trust registered pursuant to the International Trust Act 1996 Laws of Saint Vincent and the Grenadines.
The First Defendant Ayton Limited is an International Business Company registered pursuant to the International Business Companies Act 1996 Laws of Saint Vincent and the Grenadines and is wholly owned by the Blue Ridge Trust.
The Second Defendant Corporate Directors Limited is the sole director of the First Defendant Ayton Limited.
The Third Defendant St. Vincent Trust Services is the Trustee of the Blue Ridge Trust.
The Fourth Defendant Lex Services Limited is named as settlor in the Trust Deed of Blue Ridge Trust.
Blue Ridge Trust was set up on the instructions of John Henry Popely the father of the Claimant. The beneficiaries of the Blue Ridge Trust are the Claimant and other members of the Popely family. The Notice of Appointment dated 1st December 2006 purported to remove these beneficiaries.
It is not disputed that the Defendants are directly under the management and control of the Jeeves Group who are professional trustees.
A dispute arose between the Popely family and the Defendants in relation to costs incurred by the Defendants. A charge was placed on the sole asset of Blue Ridge Trust "White Owl Barn" the family home of the Popelys.
This claim was then instituted and the reliefs sought included an order setting aside the decision to register the charge against "White Owl Barn" and an order appointing the Claimant and John Oxley as directors of Ayton Ltd.
Other issues in dispute in relation to Blue Ridge Trust were to be the subject of arbitration pursuant to the Blue Ridge Trust Deed.
On June 8, 2006 by mutual consent of the parties the Court ordered that arbitration be disposed with and that all issues in dispute between the parties be determined in the Claim. These issues included what costs and charges were incurred by St. Vincent Trust Services and whether the Defendants acted in breach of their fiduciary duties to the Claimant.
On 1st December 2006 Lex Services the named settlor in the Trust Deed of Blue Ridge Trust in exercise of the power under Clause 7.2 of the Trust Deed gave notice to St. Vincent Trust Services purporting to remove the named beneficiaries of Blue Ridge Trust and appointing in their place the International Red Cross and the World Wildlife Fund as beneficiaries.
On 6th December 2006 John Henry Popely pursuant to the power under Clause 12 (b) of the Trust Deed instructed Lex Services to remove St. Vincent Trust Services as Trustee of Blue Ridge Trust and appoint Cosmos Trust Limited in its place.
On January 20, 2007 the Defendants filed a Notice of Application in which they sought inter alia a declaration that Lex Services has the Settlor's rights under the Blue Ridge Trust Deed including the power to appoint and remove beneficiaries and trustees.
On 18th March 2007 the Claimant filed an application in which he sought a declaration that the Notice of Removal and Appointment dated 1st December 2006 is void and of no effect and sought an interim injunction restraining St. Vincent Trust Services from dealing in any way with any asset of Blue Ridge Trust.
On March 15, 2007 Justice Bruce-Lyle ordered that the preliminary issues outlined in paragraph [1] be determined.
Learned Counsel for the Claimant submitted that the Notice of Appointment dated 1st December 2006 is improper, void and of no effect. The letter of 6th December 2006 was effective to remove the St. Vincent Trust Services as trustee of Blue Ridge Trust.
In support of his contention Learned Counsel submitted that:
(a) On a true construction of the Trust Deed the true settlor of Blue Ridge Trust is John Henry Popely and Lex Services is the nominee settlor and agent of John Henry Popely. Lex Services is therefore not entitled to exercise any rights of settlor save on and in accordance with the instructions of John Henry Popely, except where the instructions are contrary to paragraphs ( 1) and (4) of the Letter of Irrevocable Instructions dated 27th November 1997. Paragraphs ( 1) and (4) read as follows:
"1. John Henry Popely born 23rd March 1944, hereby instructs Lex Services Ltd. Trust House 112 Bonadie Street, Kingstown, St. Vincent and the Grenadines, to form a trust for the benefit of the persons set out in the schedule hereto (Annex I) and the assets set out in the second schedule hereto (Annex II).
4. I stipulate that I am not to be a beneficiary and cannot be appointed as a protector."
Construction of the Blue Ridge Trust Trust Deed must be on principles of common law and equity. Learned Counsel referred the Court to the English Law Application Act Chapter 8 Laws of Saint Vincent and the Grenadines.
Learned Counsel urged the Court to take into account the Irrevocable instructions when determining who has the settlor's rights. While parol evidence is not admissible a collateral written contract is admissible —Jacobs and Batavia v General Plantation Trust Ltd; and Heilbut Symons & Co v Buckleton. In construing the Trust Deed the Court must apply the ordinary rules of construction —Roger Lester Breadnor & Others v Jonathan Granville-Grossman [2003] EWHC Chapter 224. Learned Counsel also referred the Court to various clauses in the Trust Deed where the terminology used referred to the settlor as a natural person.
The true effect of the Irrevocable Instructions and the Trust Deed is that so long as the beneficiaries are alive Lex Services is not entitled to exercise the power of settlor save for the bona fide benefit of one or more of the beneficiaries.
(b) Learned Counsel further submitted that as nominee settler Lex Services was the agent of John Henry Popely and was therefore obliged to exercise the power of settlor only upon the specific instructions of John Henry Popely. As agent the law imposed upon Lex Services in the exercise of the power special duties of a fiduciary nature towards his principal. Learned Counsel referred the Court toSnell's Equity 29th Edition at page 92 where the Learned Author stated as follows:
"Agency — An agent and a trustee resemble each other in that each is subject to fiduciary obligations towards his principal or beneficiaries as the case may be …"
(c) Alternatively if Lex Services has an independent power to remove the beneficiaries the exercise by it of the power in all the circumstances is not bona fide and is unconscionable and capricious. The Defendants misused their power as fiduciary to recover their costs. In so doing they are acting in their own interest.
Learned Queen's Counsel for the Defendants submitted that John Henry Popely is the real settlor of the Blue Ridge Trust and Lex Services is the nominee settlor. John Henry Popely is not a party to the Trust Deed which was signed by Lex Services and St. Vincent Trust Services. A person that is not a party to an agreement including a Trust Agreement or Trust Deed cannot assert rights there under. A real settlor that does not have an agreement with the nominee settlor cannot assert terms and conditions that were not andhave not subsequently been expressly agreed nor can such terms be implied. Lex Services is named in the Trust Deed as settlor, therefore Lex Services has the settlor's rights as set out in the Trust Deed and in the International Trust Act 1996.
In construing the Trust the Court is required to consider the instrument creating the Trust in the context of the statutory frame work being the International Trust Act and the relevant surrounding circumstances. Learned Counsel referred the Court to Sections 7 and 9 of the International Trust Act. The background circumstances to be looked at are that John Henry Popely being a director of Hever Worldwide Properties did not wish to have to disclose that he had an interest in Blue Ridge Trust who was a shareholder of Casterbridge Properties Ltd who had shares in Hever Worldwide Properties, so he named Lex Services as the settlor of Blue Ridge Trust. He divested himself of the powers of settlor when he had Lex Services execute the document as nominee settlor. Lex Services is therefore entitled to exercise its absolute discretion as settlor and the Court may not interfere with that discretion.
The Claimant is a discretionary beneficiary. A discretionary beneficiary has no proprietary rights —R v Barnet Magistrates' Court Exp Cantor [1999] 1 WLR p. 334. A discretionary beneficiary has no right to challenge his removal. He is merely a volunteer and equity will not assist a volunteer. Also the Court will only exercise its inherent jurisdiction on the application of a party with a...
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