Swissindependent Trustees SA vs Sofer & Others

This case involved the approval of a trustee's proposal to wind up certain trusts and distribute the assets to the specified beneficiaries, effectively eliminating the interests of minor and unborn beneficiaries.

TLDR:

• Trustee sought court approval to wind up trusts and distribute assets.
• Proposal aimed to distribute remaining assets to specified beneficiaries immediately.
• Minor and unborn beneficiaries would receive nothing under the proposal.
• The court approved the proposal as a lawful exercise of the trustee's powers.

The claimant, Swissindependent Trustees SA, acting as trustee of certain trusts, applied for the court's approval to wind up these trusts and make final distributions of assets to the beneficiaries. The claim form was issued on 5 June 2023, supported by unchallenged witness statements from Andrew Bayles, a director and general counsel of the claimant.

The matter was argued before HHJ Paul Matthews on 30 October 2023. Richard Wilson KC and James Weale represented the claimant, while Emilia Carslaw represented the sixth defendant, who stood for the minor and unborn beneficiaries. The second to fifth defendants, adult beneficiaries of the trusts, did not attend and were not represented.

The court was asked to approve a proposal that would wind up the trusts and distribute the remaining assets to the specified beneficiaries immediately, rather than by the end of 2026 as initially planned. This proposal would eliminate any potential benefits for the minor and unborn beneficiaries.

The background of the case involved the creation of multiple trusts by Hyman Sofer, who intended to benefit his family members through these structures. Over time, disputes arose regarding the administration and costs of these trusts, leading to the current application to wind them up.

The court examined the trustee's proposal under the principles established in Public Trustee v Cooper, which outlines the categories of cases where trustees seek court approval for their actions. This case fell into the second category, where the trustees had decided on a course of action but sought the court's blessing due to the momentous nature of the decision.

The claimant argued that winding up the trusts was in the best interests of the beneficiaries as a whole, citing the genuine need for funds by some specified beneficiaries, the intention of these beneficiaries to pass down wealth to future generations, and the substantial costs of administering the trusts.

The court was satisfied that the claimant had formed a reasonable opinion to implement the proposal and that this opinion was not vitiated by any conflict of interest. Consequently, the court approved the proposal, deeming it a lawful exercise of the trustee's powers.

While the decision effectively terminated any potential benefits for the minor and unborn beneficiaries, the court noted that the specified beneficiaries intended to pass down their wealth, potentially benefiting future generations indirectly.

Legal representatives: Richard Wilson KC and James Weale (instructed by Weightmans LLP) for the Claimant, Burges Salmon LLP for the First Defendant, Emilia Carslaw (instructed by Wiggin Osborne Fullerlove LLP) for the Sixth Defendant.

Judicial Panel: HHJ Paul Matthews

Case Citation Reference: [2024] EWHC 1543 (Ch)