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BUSINESS, PROPERTY, WILLS, AND TRUSTS
Equity Trust (Jersey) Ltd (Respondent) v Halabi (in his capacity as Executor of the Estate of the Late Madam Intisar Nouri) (Appellant) (Jersey)
Case summary
Case ID
JCPC/2019/0119
Jurisdiction
Jersey
Parties
Appellant(s)
Simon Halabi (in his capacity as Executor of the Estate of the Late Madam Intisar Nouri)
Respondent(s)
Equity Trust (Jersey) Ltd
Issue
Whether the claim of a former trustee of a Jersey law trust takes priority over the claims of successor trustees on a first in time basis and trust creditors and what is the status of a trustee’s right of indemnity and associated equitable lien in relation to a trust governed by Jersey law.
Facts
The Appellant (Halabi, the Executor) and the Respondent ("ETJL") are assumed to be creditors of the Ironzar II Trust, a Jersey law discretionary trust whose liabilities substantially exceed its assets. ETJL is a former trustee of the Ironzar II Trust which contends that its rights of recourse to the trust fund take priority to those of other creditors, including the Executor, who disputes that contention. The Royal Court of Jersey, giving judgment in favour of the Executor, held that as between a former and current trustee, their liens rank on a pari passu basis and not first in time. It also held, in the alternative, that a trustee’s right of indemnity and lien arise on a liability by liability basis with the trustee acquiring (and releasing) successive rights of indemnity and lien as it acquires (and exonerates) liabilities. The Royal Court further held that a creditor of an "insolvent" trust, including a former trustee claiming pursuant to its right of indemnity, was not entitled to claim its costs of proving its claim from the insolvent fund. The Court of Appeal of Jersey reversed those findings and allowed ETJL’s appeal. The Court of Appeal held that a trustee’s equitable lien ranks in accordance with the time of its creation; a trustee has priority over the creditors with which it has transacted as trustee; and that ETJL’s cost of proving its claim fell within its right of indemnity and associated lien. The Executor now appeals to the Judicial Committee of the Privy Council.
Date of issue
18 November 2019
Judgment details
Judgment date
13 October 2022
Neutral citation
[2022] UKPC 36
Judgment links
Judgment summary
13 October 2022
Appeal
Justices
Hearing dates
Full hearing
Start date
15 June 2021
End date
17 June 2021
Watch hearings
15 June 2021 - Morning session
15 June 2021 - Afternoon session
16 June 2021 - Morning session
16 June 2021 - Afternoon session
17 June 2021 - Morning session
17 June 2021 - Afternoon session
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Last updated 9 May 2024