Gomez & Ors v Encarnacion Gomez-Monche Vives & Ors

Article 5(6) of the Council Regulation (EC) 44/2001 creates a narrowly construed special jurisdiction. It applies only where the trust falls within the specified forms of creation, is domiciled in the relevant Member State, and the defendant is sued in the capacity of settlor, trustee or beneficiary.

A resulting trust arising by operation of law is outside Article 5(6). A claim against a recipient of trust property, framed as a personal or proprietary claim because the recipient was not entitled to the property, is not a claim against that person as beneficiary. A fiduciary donee of a power is not thereby a trustee for Article 5(6). If Article 5(6) applies, the court cannot decline jurisdiction on forum non conveniens grounds.

The claimants brought proceedings concerning an English-law trust established by a written declaration in 1984. They alleged that the first defendant, the settlor’s widow, had improperly received trust income and capital and had improperly appointed herself as appointor. They sought personal and proprietary relief and the removal and replacement of the appointor.

The first defendant, domiciled in Spain, challenged the English court’s jurisdiction under Article 5(6) of the Council Regulation (EC) 44/2001, alternatively relying on Liechtenstein as the more appropriate forum. The central questions were whether the relevant trust was within Article 5(6), whether it was domiciled in England, and whether the first defendant was sued as beneficiary or trustee.

1. Creation of the trust. The written declaration of trust dated 11 June 1984 was a trust created by written instrument. The alleged resulting trust, arising automatically because the declaration did not dispose of the whole beneficial interest, was not within Article 5(6). The court applied the provision literally and restrictively. A constructive trust was generally outside Article 5(6), although a claim against a trustee who made a personal gain from trust property might, in an appropriate case, be brought against that person as trustee.
2. Domicile. Under Article 60(3) of the Regulation and paragraph 12(3) of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001, domicile depended on the system of law with which the trust had its closest and most real connection. That was ordinarily the governing system of law. Since the declaration expressly selected English law, the trust was domiciled in England.
3. Beneficiary capacity. The claim concerning receipt of income and capital was not brought against the first defendant in her capacity as beneficiary. The claimants alleged that she was not entitled to the money and relied on volunteer, constructive trust, Diplock and knowing-receipt remedies. Article 5(6) required examination of the claim made, not the defence which the defendant might raise. The words “as beneficiary” meant in the capacity of beneficiary.
4. Trustee capacity. The claim to remove the first defendant as appointor was not a claim against her as trustee. A fiduciary power and a trusteeship were materially different. The restrictive construction required for Article 5(6) did not permit “trustee” to be expanded to include a fiduciary donee of a power.
5. Forum non conveniens. The reasoning in Owusu v Jackson applied equally to jurisdiction under Article 5(6). If that provision applied, the Regulation left no discretion to decline jurisdiction on forum non conveniens grounds.
6. The entirety of the claim against the first defendant fell outside Article 5(6). The court declared that it had no jurisdiction to hear the claim.