Twin Benefits Ltd v Barker

Permission to serve proceedings outside the jurisdiction requires a serious issue to be tried on each claim and a good arguable case that each claim falls within an applicable gateway. The serious-issue threshold is not high, but pleaded facts cannot overcome a claim which is legally unsustainable.

A protector’s fiduciary duties are defined by the trust instrument and relevant statutory provisions. A protector does not automatically owe the general supervisory duties of a trustee, nor does trusteeship of one trust make the protector a protector of a separate trust. Procedural powers under the Civil Procedure Rules 1998 to vary orders or disapply representative-binding effects are not transferable causes of action and must ordinarily be exercised in the proceedings in which the order was made.

Twin Benefits Ltd, as assignee of claims said to belong to Tom and Freya Barker, brought proceedings against Iain Paul Barker and Confiance Ltd. The claims alleged breach of fiduciary duty by Mr Barker as protector, unjust enrichment or restitution, and sought to avoid or vary an order approving a settlement in earlier Confiance proceedings.

Confiance was no longer a defendant to the application, having been struck out for failure to provide security for costs. Mr Barker challenged the court’s jurisdiction and sought to set aside permission granted to serve him in Guernsey. Twin Benefits relied on Gateway (9) in paragraph 3.1 of Practice Direction 6B. The issues were whether each claim raised a serious issue to be tried and whether it had a good arguable case within that gateway.

1. The application succeeded. The order permitting service out of the jurisdiction, and service on Mr Barker, were set aside.
2. The “serious issue to be tried” requirement has the same effect as the “reasonable prospect of success” test in CPR Part 6.37. The threshold is important but not high. Pleaded facts are ordinarily taken as read unless contradicted by documents relied upon by the respondent. The test must be applied separately to each claim.
3. The alleged fiduciary-duty claims were not seriously arguable. Mr Barker was protector of the principal trust, not of the separate Sub-Trust. The Sub-Trust contained no office of protector. His powers to appoint and remove trustees were personal powers and, in the case of removal, expressly non-fiduciary. A protector’s duties depend on the trust instrument and relevant statutory provisions; they do not include the general supervisory duties of a trustee.
4. Tom and Freya would have had contingent, rather than unascertained, interests if the relevant contingency occurred and therefore would have had standing. That conclusion did not cure the absence of any sustainable fiduciary duty.
5. The alleged fiduciary-duty and restitutionary claims had also been compromised by the Confiance Settlement approved by Asplin J. Unless that settlement and order were set aside, the claims were unarguable. The representative-binding effect of CPR 19.7(7), and the power under CPR 3.1(7) to vary or revoke an order, were procedural mechanisms rather than assignable private-law rights. Any application had to be made in the Confiance Proceedings, where the relevant order had been made.
6. The assignments therefore transferred nothing because the rights purportedly assigned did not exist, had been compromised, or were procedural rights incapable of assignment. It was unnecessary to decide the wider validity of the assignments.
7. For gateway purposes, the labels “contract” and “tort” are not conclusive. A fiduciary-duty claim may fall within a gateway if, in substance, it is contractual or tortious. The gateways should be approached in a broad internationalist spirit. Nevertheless, the claims here did not satisfy Gateway (9), and the procedural and restitutionary claims could not rely on it.