Key Facts
- •Harbour Fund II LLP (Harbour) provided litigation funding for proceedings (Orb Litigation) brought by Mr Thomas, Mr Taylor, and Orb ARL against Mr Andrew Ruhan.
- •The Orb Litigation settled, resulting in the transfer of various assets.
- •Disputes arose regarding the administration and distribution of these assets under the Harbour Trust, a trust created in connection with the litigation funding.
- •Multiple applications were made, including a Part 8 claim to confirm the trustees' status and powers, and applications for receiver appointments.
- •The validity of Mr Ticehurst's appointment as trustee, purportedly under s.36(1) of the Trustee Act 1925, was challenged.
- •The source of funding for Mr Ticehurst and the claimants was eventually revealed to be connected to individuals with prior findings of dishonesty.
- •The nature and extent of the Harbour Trust and the trustees' powers were central to the dispute.
Legal Principles
Contractual interpretation considers the parties' intention based on the natural and ordinary meaning of words, the document's purpose, other provisions, known facts, and common sense.
Marley v Rawlings [2014] UKSC 2, [19]
Trustee Acts 1925 and 2000 grant trustees various powers, but these are subject to any contrary intention expressed in the trust instrument.
Trustee Act 1925, s.69(2)
The obligations of a 'bare trustee' depend on the trust's terms and context.
Lewin on Trusts (20th ed.) [1-028]
Applying trusts law to commercial trusts requires distinguishing between fundamental principles and specialist rules developed for traditional trusts.
Target Holdings Ltd v Redferns [1996] 1 AC 421, 435
In commercial trusts, the contract defines the trust's parameters.
AIB Group (UK) plc v Mark Redler [1996] AC 421, [70]-[71]
Section 36(1) of the Trustee Act 1925 allows for the appointment of new trustees under certain circumstances.
Trustee Act 1925, s.36(1)
The court has inherent jurisdiction to remove trustees for misconduct.
Letterstedt v Broers (1884) 9 App Cas 371
The court has a flexible power to appoint receivers under s.37 of the Senior Courts Act 1981.
Senior Courts Act 1981, s.37
Outcomes
Mr Ticehurst's appointment as trustee was deemed invalid.
The power of appointment under s.36(1) of the Trustee Act 1925 was impliedly excluded by the Harbour IA; the appointment was also for an improper purpose.
Messrs Thomas and Taylor were removed from their positions as trustees.
Their prior misconduct and actions contrary to the beneficiaries' interests warranted their removal.
Emma Jordan and Toby Graham were appointed as new trustees with limited powers.
Their expertise and neutrality were deemed suitable for the limited role of receiving and holding assets.
The Enforcement Receivers (Mr Standish and Mr Pike) were appointed as receivers over the Property Assets.
Their familiarity with the assets and the benefits of avoiding additional professional fees outweighed concerns about potential conflicts of interest.