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17 SEP 2007

Enforcement Against Jersey Trusts: a Breakthrough in Judicial Co-operation?

Mark Renouf, Partner, Hanson Renouf, Jersey and Associate Member of No 5 Chambers, Birmingham. There is a long history of judicial co-operation between the courts of England and Wales and Jersey as regards the reciprocal enforcement in each jurisdiction of orders emanating from the other. This is based on both enforcement at common or customary law and under statute, pursuant to the extension of the Foreign Judgments (Reciprocal Enforcement) Act 1933 to Jersey by Order in Council in 1973. Judicial displeasure was expressed by the Jersey courts, however, in In re Fountain Trust [2005] JLR 359, regarding a finding by the High Court of England and Wales that the Fountain Trust was a sham (in the Family Division judgment of Minwalla v Minwalla and DM Investments SA, Midfield Management SA and CI Law Trustees Ltd [2004] EWHC 2823 (Fam), [2005] 1 FLR 771). This case followed the English Court of Appeals judgment in Charalambous v Charalambous [2004] EWCA Civ 1030, [2004] 2 FLR 1093, which had confirmed the jurisdiction of the English courts to vary a post-nuptial or ante-nuptial settlement even though it was governed by a foreign (in this case, Jersey) proper law.

Fountain Trust represented an expression of Jersey judicial exasperation with perceived interference, sometimes without any consideration of the Jersey law position, in trusts whose proper law was expressly stated to be that of the island. Further, at that time, sweeping legislative amendments enacted in Jersey under the Trusts (Amendment no 4) (Jersey) Law 2006 (the Trusts Law Amendment) were in the pipeline. The Trusts Law Amendment apparently sought to deny recognition, in Jersey, of judgments which did not reach a conclusion which was consistent with the application of Jersey law and the battle lines appeared to be well and truly drawn. However, in the meantime, peace has suddenly dawned, albeit on hastily laid and perhaps shaky legal foundations. In this article, in September [2007] International Family Law, Mark Renouf explains why.

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