Guernsey: Beddoe Applications In Guernsey

Last Updated: 2 February 2018
Article by Natasha Kapp and Tim Bamford

The Royal Court of Guernsey has handed down judgment In the matter of P Limited which outlines the approach to be adopted when considering applications by trustees of Guernsey law trusts for permission to participate in proceedings before foreign courts, in particular, matrimonial proceedings in the English family court.

Hearing in Private

The Deputy Bailiff confirmed that the application fell within two recognised exceptions to the principle of open justice, namely, hearing of applications for ancillary relief in matrimonial proceedings and proceedings invoking the supervisory jurisdiction of the court in trusts cases. The fact that the proceedings are the result of matrimonial proceedings in London did not, in the Deputy Bailiff's view, affect the outcome. The Deputy Bailiff noted that it is important that a trustee in the position of the Applicant is able to come before the Royal Court in private so as to give full and frank disclosure of the pros and cons of a particular course of action in order to seek the Court's guidance. He recognised if what the trustee wished to explain was capable of being used by others for different purposes, that would probably inhibit the willingness of the trustee to be open with the Court. It was accordingly ordered that the Application be heard in private and the court file sealed.

The background to the application

The application was brought by a private trust company which is the trustee of a Guernsey law discretionary trust, referred to as the No.1 Trust. The trustee had previously also been the trustee of a second trust, referred to as the No.2 Trust, but had retired from this position.

By the application, the trustee sought the Royal Court's approval for it to participate in, and be joined as a party to, matrimonial proceedings which were in progress in the Central Family Court in London.

The parties to those matrimonial proceedings were a husband, a beneficiary of the No.1 Trust, and a wife, a beneficiary of the No.2 Trust. The settlor of the No.1 Trust is the husband's father, and the settlor of the No.2 Trust is the wife's mother. The husband's siblings make up the remaining beneficiaries of the No.1 Trust.

The husband and wife married before either trust was settled. Shortly after both trusts were settled, the trustee (then of both trusts) acquired a beneficial interest in a residential property in London. The beneficial interest in the property was held on trust by the trustee of the No.1 and No.2 Trusts in equal shares.

The property became the matrimonial home for the couple, which they occupied with the permission of the trustee. The trustee entered into loan agreements with two companies in order to fund the acquisition of the property, with that funding being provided to those companies by the husband's father and by the wife's mother respectively. Approximately one year after the purchase of the property, the loan arrangements were restructured, and the loans assigned to a company acting as a consolidated lender. A legal charge against the title of the property was subsequently registered in favour of the consolidated lender.

The relationship between the husband and wife subsequently broke down and the wife instigated the matrimonial proceedings in the English family court. The wife sought orders under section 23 of the Matrimonial Causes Act 1973 (the "MCA") that the No.1 Trust constituted a nuptial settlement which was capable of variation. Section 23 of the MCA gives the English family court wide-ranging powers including to make orders that the ownership of the property be varied, that it be sold or to vary the terms under which the wife occupied the property. However, the nature of the relief sought by the wife went further than previous reported cases, with the potential to broaden the scope of relief currently granted under section 23 applications. Additionally, the wife also sought to advance arguments that the trust arrangements were a sham.

The trustee was served with the matrimonial proceedings and, after obtaining legal advice from English solicitors and an English QC, decided to bring its application before the Royal Court.

The application was made in reliance on the Beddoe jurisdiction of the Royal Court. Specifically, it was brought pursuant to sections 68 and 69 of the Trusts (Guernsey) Law, 2007, the former of which enables a trustee to apply to the court "for directions as to how he should or might act in any of the affairs of the trust, and the court may make such order as it thinks fit".

Legal analysis

The Deputy Bailiff referred to his earlier judgment in T Limited. In that earlier judgment, the Deputy Bailiff adopted the explanation of the Royal Court of Jersey in In the matter of the H Trust [2006] JRC 057 as to the relevant considerations on a question such as that raised by the Application. He also cited with approval two further decisions of the Royal Court of Jersey, In re IMK Family Trust 2008 JLR 250 and In the matter of the Poon Family Trust [2011] JRC 167, and two decisions of the Grand Court of the Cayman Islands: In the matter of the B Trust 2010 (2) CILR 348 and In the matter of the A Trust (unreported, 1 December 2016).

From these cases, the Deputy Bailiff concluded that:

  1. The usual position is that it will not be appropriate for a trustee to submit to the jurisdiction of a foreign court because it will not be in the interests of the beneficiaries of the trust for which they are responsible to do so.
  2. The Deputy Bailiff concurred with the earlier authorities that there are exceptions to that general rule. One key exception is where trust assets are located within the jurisdiction of the foreign court, as was the case for the No.1 Trust where the property was located in London.
  3. However, the Deputy Bailiff held that it does not follow automatically that in such a case (where the assets are located within the jurisdiction of the foreign court) a trustee will be permitted by the Royal Court to submit to the jurisdiction of the foreign court. The focus will always be on whether it is regarded by the Royal Court as being in the interests of the beneficiaries of the trust as a whole for that to happen. This may involve looking at where the trustee's input can most appropriately be of assistance, either in the foreign matrimonial proceedings or subsequently in the Royal Court.
  4. The Deputy Bailiff referred to Section 14(4) of The Trusts (Guernsey) Law, 2007 which relates to recognition or enforcement of judgments or orders of other jurisdictions, which is in similar terms to Article 9(4) of The Trusts (Jersey) Law 1984, as amended.
  5. The Deputy Bailiff noted that the rationale of the decisions of the Jersey court, in particular, has been that it is generally preferable for a trustee not to submit to the jurisdiction of a foreign court because of the limiting effect it then has on the ability of the trustee to approach the issues surrounding whether, and if so how, to give effect to the foreign court's order. The Deputy Bailiff took the view that that was an appropriate starting point.
  6. The Deputy Bailiff held that consideration will have to be given how those matrimonial proceedings might be conducted with or without the trustee participating and, in particular, whether the interests of the beneficiaries as a whole are likely to be presented by other participants adequately. It is a balancing exercise that looks beyond the position of any party to those proceedings which has an interest in the trust property concerned.

The court's decision

The trustee was seeking an order that was an exception to the general rule that trustees should not submit to the jurisdiction of a foreign court. The Court took into account that the Trustee had clearly demonstrated that it wished to engage in the proceedings and that the entire beneficial class supported that step.

It would be in the interests of the wider class of beneficiaries of the trust (i.e. not just the husband) for the trustee to produce evidence and bring arguments in the English matrimonial proceedings against the relief sought by the wife. This was particularly crucial in view of the wide powers of the English court to make an order detrimental to the interests of all the beneficiaries of the No.1 Trust, which it could make irrespective of the trustee participating in the proceedings. It was a further important factor that the English court could easily enforce an order against the trust property due to its location in the jurisdiction.

The Deputy Bailiff considered it particularly significant that there were unusual features of what the wife was seeking that really needed to be addressed by the trustee. It had potential adverse ramifications for the trustee and the trust outside of the normal orders sought in English matrimonial finance proceedings generally. Notably, if the wife sought to argue that the trust and loan arrangements put in place to finance the purchase of the property were a sham, it would be appropriate for the trustee, as opposed to other parties in the trust structure, to defend such serious allegations and this pointed towards the matter being an exceptional case.

As a result of the trustee no longer being the trustee of the No.2 Trust, and the new trustee of the No.2 Trust being in the wife's camp, there was unlikely to be a common approach to the English matrimonial proceedings between the two trustees. Therefore, there was no practical alternative to the trustee participating in the matrimonial proceedings if the arguments and evidence that could be deployed by it are to be of assistance to the English court.

Finally, the English judge hearing the matrimonial proceedings had given "judicial encouragement" that the trustee's participation in the English proceedings would be potentially useful in helping the parties to reach a negotiated settlement of their dispute at a forthcoming financial dispute resolution (FDR) hearing. The Deputy Bailiff referred to his involvement in determining similar matrimonial finance cases and of his knowledge of FDR hearings. He therefore recognised that the trustee's input could potentially be helpful. He further noted that the Royal Court should respect the apparent judicial encouragement coming from the English judge who had been dealing with the matrimonial proceedings.

The Deputy Bailiff was persuaded that it was in these circumstances a proper exercise of the Court's supervisory jurisdiction to accede to the Application and to also order the costs to be payable on an indemnity basis from the Trust.

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.

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
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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