| CONFLICT OF LAWS — Jurisdiction under Council Regulation — Trusts — Beneficiary domiciled in member state — Proceedings brought in another member state — Whether defendant sued in capacity of beneficiary — Council Regulation (EC) 44/2001, art 5(6)
Jose Gonzalez Gomez and others v Encarnacion Gomez-Monche Vives and others [2008] EWHC 259 (Ch); [2008] WLR (D) 50
Ch D: Morgan J: 18 February 2008
The words “as beneficiary”contained in art 5(6) of Council Regulation (EC) 44/2001, which provided that a person domiciled in a member state could, in another member state, be sued “as ... beneficiary of a trust”, required the claimants to show that they were suing a party in its capacity as a beneficiary rather than in the capacity as someone not beneficially entitled to the moneys that were claimed.
Morgan J so held in the Chancery Division when declaring that the court did not have jurisdiction, under art 5(6) of the Regulation, to hear the claim of the claimants, Jose Gonzalez Gomez, Pablo Gonzalez Gomez and Alvaro Gonzalez Gomez, against the first defendant, Encarnacion Gomez-Monche Vives, by which they sought, inter alia, an account of all property subject to the trusts of a declaration of trust received by her and of her dealings therewith, in relation to the alleged breaches of trust of the second to fourth defendants, being the current or former trustees.
The first defendant, who was domiciled in Spain, was the widow of the settlor of a declaration of trust, which stated that the proper law was English law. The claimants claimed that they were beneficiaries under the trust. The first defendant was served with the proceedings and applied for a declaration that the court did not have jurisdiction to hear the claim. The claimants argued that the claim was brought against the first defendant “as beneficiary” and therefore art 5(6) of the Regulation applied. The issue was whether the fact that the first defendant was a beneficiary under a declaration of trust, and the circumstances in which payments had been made to her by the trustees, ostensibly to her in her capacity as a beneficiary entitled to receive those payments, made the claim by the claimants against the first defendant a claim against her “as beneficiary”.
MORGAN J said that the natural meaning of the words used in art 5(6) required one to examine the claim made against the defendant and to ask whether the claim was brought against the defendant in his capacity as beneficiary, the answer to which should not be affected by any prediction as to whether the defendant would assert in his defence that he was a beneficiary. The claim against the first defendant was not a claim against her “as beneficiary” since the words “as beneficiary” required the claimants to show that the claimants were suing the first defendant in her capacity as a beneficiary rather than in her capacity as someone not beneficially entitled to the monies that were claimed. The words “as beneficiary” naturally meant “in the capacity of beneficiary”. Accordingly, the claims against the first defendant were not within art 5(6) of the Regulation. |
