Jose Gonzalez Gomez & Ors v Encarnacion Gomez-Monche Vives

For Article 5(6) of the Judgments Regulation, a trust subject to an effective express choice of English law will ordinarily have its closest and most real connection with English law. The court need not conduct a multifactorial comparison of administrative and asset-related contacts where a governing law has been chosen.

The special jurisdiction must nevertheless be construed strictly. A beneficiary sued to account for and restore overpayments received from a trust is sued as a beneficiary where the dispute concerns the extent, rather than the existence, of that entitlement. A holder of fiduciary powers, such as an appointor or protector, is not thereby sued as a trustee.

The appellants, three sons of the settlor of an English-law trust, alleged that their mother had received excessive income and capital from the trust. They sought an account and restoration of the assets, and also sought her removal as appointor.

Morgan J in the Chancery Division held that the trust was domiciled in England, but declared that the English court had no jurisdiction over the mother. He held that she was not sued as a beneficiary or as a trustee within Article 5(6) of the Judgments Regulation.

The sons appealed those two conclusions. The mother served a respondent’s notice challenging the finding that the trust was domiciled in England. The central questions were the trust’s domicile and whether each claim was brought against the mother in a capacity specified by Article 5(6).

1. Appeal allowed in part. The court allowed the appeal concerning the recovery claim, dismissed it concerning the removal claim, and affirmed Morgan J’s conclusion that the trust was domiciled in England.
2. For the domicile requirement in Article 5(6) of the Judgments Regulation, the applicable rule in paragraph 12(3) of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001 asks which legal system has the trust’s closest and most real connection. The history and purpose of that rule showed that an effective choice of English law would ordinarily be decisive. A multifactorial assessment of administration, assets, trustees and beneficiaries was not appropriate where the settlor had selected the governing law. The English choice was real and close because trustees must apply that law in carrying out their responsibilities. The trust was therefore domiciled in England.
3. Article 5(6), as a derogation from the defendant’s ordinary domicile jurisdiction, required strict interpretation. It did not extend to a constructive trust. The relevant trust was consequently the written declaration of trust, not the constructive-trust remedy claimed in respect of the payments.
4. The mother was sued as beneficiary in the recovery claim. The parties had proceeded on the basis that she was beneficially interested in the written trust. The dispute was whether she had received more than her entitlement, not whether she had any entitlement. The account sought included payments conceded to be due and was necessary to identify the alleged overpayments. The claim therefore concerned an internal trust relationship and fell within Article 5(6).
5. The mother was not sued as trustee in the claim to remove her as appointor. Even if her powers were fiduciary, an appointor, protector or other holder of fiduciary powers does not fall within the normal meaning of trustee. Extending Article 5(6) to such persons would contradict the required restrictive construction.

• Court of Appeal (Civil Division): Allowed the appeal on the claim for recovery of overpayments, dismissed it on the claim concerning the appointor, and affirmed the trust-domicile finding: [2008] EWCA Civ 1065.
• High Court, Chancery Division (Morgan J): On 18 February 2008, declared under the Civil Procedure Rules that the court lacked jurisdiction over the respondent and set aside service of the claim form as against her. He held that the trust was domiciled in England but that the respondent was sued neither as beneficiary nor as trustee.