Summary
The defendant, who was domiciled in Spain, was sued in England for a breach of trust. The first claim was about the claimants’ entitlement to any overpayments which were made by the claimant. The second claim was that the first defendant should not be Appointer, and therefore she had to be removed.
There was a written declaration that the trust was governed by English law.
The defendant challenged the jurisdiction of the English court. On 18th Feb 2008, the High Court concluded that the trust was domiciled in England. Nonetheless, it was held that, for the purposes of Article 5(6), the two claims were not brought against the first defendant as beneficiary and trustee respectively, so that the English court did not have jurisdiction under Article 5(6) of Brussels I. Mr Justice Morgan held that:
“120 […] I have held that the first part of the claimants' claim against the first defendant is not a claim against her “as beneficiary” and I have also held that the second part of the claimants' claim against the first defendant is not a claim against her “as trustee”. It follows that the entirety of the claimants' claim against the first defendant is outside Art.5(6) of the Judgments Regulation .
121 The only basis on which the claimants contend that this court has jurisdiction to hear this claim is Art.5(6) . As I have held that the claimants' claim does not come within Art.5(6) it must follow that I should declare that the court has no jurisdiction to hear this claim.” [120-121]
An appeal was made before the Court of Appeal. On 3rd October 2008, the Court of Appeal allowed the appeal in respect of the first claim, and dismissed it for the second claim. Lord Justice Collins held that:
“90 The dispute in this case is about the extent of the first defendant's entitlement, and not its existence. She is sued because she has been treated as a beneficiary by the trustees and by herself, and she actually is a beneficiary. On the material before the court, that is the only basis on which she could claim to retain any of the moneys she has been paid. The claim involves, and arises out of, what Professor Schlosser called problems arising in connection with the internal relationships of the trust. In my judgment the first defendant is therefore being sued as beneficiary for the recovery of the overpayment.
[…]
97 I am satisfied that the judge was right on the simple ground that, even if the powers are classified as fiduciary, the first defendant is not being sued in the second claim “as a trustee…of a trust created…by a written instrument …” for the purposes of art.5(6)” [2008] EWCA Civ 1065 [90 and 97].