Can a creditor enforce a judgment debt against the interests of
a beneficiary under a Jersey discretionary trust?
Jersey's Royal Court has now addressed this question,
although not necessarily answered it for good. It declined to order
enforcement by way of arrest of such an interest, but in doing so
the Court was itself exercising a discretion. It is therefore
unclear whether the Court held that such interests are incapable of
being arrested as a matter of law, raising the possibility of
further development of the law in a future case.
Circumstances of the decision
The case in question was Kea Investments Limited v Watson [2021]
JRC 009. Kea was a judgment creditor of Eric Watson. Watson was one
of several beneficiaries under three Jersey trusts. The terms of
these trusts were not spelt out in the judgment, but it was clear
that the trustee had the usual discretion to appoint trust property
to the beneficiaries of each trust, including Watson. Further, at
the
