Re A’s Application
 [2018] WTLR 353

Analysis

The trustee applied under s61 of the Isle of Man Trustee Act 1961, alternatively under the court’s inherent jurisdiction, for the opinion, advice or direction of the court in relation to its intention to negotiate with a foreign revenue authority for the discharge of tax liabilities of the settlement, the disclosure of information necessary for that purpose, and the payment of the tax irrespective of whether they are enforceable in the Isle of Man. The beneficiaries agreed with the relief sought.



Held, allowing the application:


1. 1) Trustees were entitled to seek the approval of the court in relation to ‘momentous decisions’. The court must be satisfied that the trustee’s decision has been formed in good faith, that it is one which a reasonable trustee properly instructed could have reached, and that it has not be vitiated by any actual or potential conflict of interest. The lengths the court must go to in examining the trustees’ decision-making process depend on the decision in question. The court is not concerned with the question of whether there may be a different, more appropriate way of dealing with the issue, but only whether it is decision a reasonable trustee could make (approving Lewin on Trusts at 27-077 to 27-080).





2. 2) There was no suggestion that the trustee was not acting in good faith. There was no conflict of interest, and its reliance on its own right of indemnity from the trust fund in relation to the tax liabilities was not a conflict. 





3. 3) Its view that the tax liabilities should be settled was a rational one. The modern climate of increasing international cooperation in tax matters and more recent Manx authorities meant that the English case of India v Taylor, suggesting that English courts would not allow the enforcement of foreign tax liabilities, should not be extended and may no longer be good law in the Isle of Man.

4. 4) Per curiam, the case of Re A Ltd (in liquidation), holding that the provisions Proceeds of Crime Act 2008 could not be disapplied by this court, should be read in the light of the additional guidance provided by C v S and Bank of Scotland v A.

<![CDATA[ JUDGMENT DEEMSTER DOYLE:
 Introduction
 [1] I was content that the court continue to sit in private in respect of this matter. The claim was in effect a Public Trustee v Cooper [2001] WTLR 901 category 2 claim (a trustee seeking the blessing of the court for a momentous decision) and in accordance with Re …

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 [2018] WTLR 353"