BL-2023-000501 - [2025] EWHC 2334 (Ch)

The reasons I have given above are sufficient to explain why I consider that the claim should be dismissed. The defendant argued a number of other reasons why the claim should be dismissed in any event. To some extent these arguments can be characterised as reasons why Mr Anisimov had no intention to create a trust. Others are reasons why, even if I came to the view that Mr Anisimov did intend to create a trust, the claim ought not to succeed.

Ms Lacob contended that any claim for breach of trust would be time barred, save to the extent that Mr Jaffe had received moneys himself, as more than six years have passed since the sum representing the Payment was spent. The Limitation Act 1980 provides for a six-year limitation period in respect of an action by a beneficiary to recover trust property or in respect of any breach of trust, save where there has been a fraudulent breach of trust to which the trustee was a party or privy, or to recover trust property or its proceeds in the possession of the trustee, or previously received by the trustee and converted to his use: see section 21(1), (3). It appears clear that Mr Jaffe applied some of the Payment for his own purposes, but the individual payments were not explored at the trial. Had the claim otherwise succeeded, an account or inquiry would have been required to determine the extent of the limitation defence, and possibly for other purposes.

The defendant sought also to rely on the defence of laches, whereby a court of equity may decline to permit a party to vindicate their right where they have slept on that right. Again, the question does not arise in light of my finding that there was no intention to create a trust. However, it is established that, for laches to be applicable, there must be something that makes it inequitable to enforce the claim. It was said by the Supreme Court in Betterment Properties (Weymouth) Ltd v Dorset County Council (No.2) [2014] AC 1072 at [31] that the inequitable factor may be reasonable and detrimental reliance by others on the claimant’s conduct, or some sort of prejudice arising from the fact that no remedy had been sought for a long time. Mere delay is never enough without more. Mr Jaffe had paid away the Payment shortly after the events of June to September 2012, and it was not suggested that the delay affected the fairness of the trial process (as in Schulman v Hewson [2012] EWHC 855 (Ch)). In those circumstances, it seems to me improbable that laches would have been available as a defence if Mr Anisimov had intended to create a trust.

There was also a defence pleaded in reliance on section 61 of the Trustee Act 1925, which provides for the court to have discretion to relieve a defendant trustee from liability where he or she has acted honestly and reasonably and ought fairly to be excused. Such a defence is fact sensitive and I cannot sensibly comment on how it would have applied had the facts as found been different.

Ms Lacob argued a further interesting point. This was the contention that the failure to comply with section 19 of the Trustee Act 2000 in the appointment of Pumula as a nominee for Mr Jaffe meant that any trust was not properly constituted. Again, this point does not arise on the facts as I find that Mr Anisimov, in not intending to create a bare trust in favour of the claimant, did not constitute such a trust when causing the Payment to be made to Pumula. It follows that he did not intend for Pumula to be a nominee for Mr Jaffe (alternatively for itself and Mr Jaffe as joint trustees).

Section 19(2) of the 2000 Act provides that a person may not be appointed as a nominee unless either (a) it carries on a business which consists of or includes acting as a nominee or custodian, or (b) it is a body corporate which is controlled by the trustee, or (c) it is recognised (by the Law Society) under section 9 of the Administration of Justice Act 1985. For these purposes, control is determined in accordance with section 1124 of the Corporation Tax Act 2010. It is clear that if Pumula had been a nominee for Mr Jaffe as trustee, none of the relevant conditions in section 19(2) would have been satisfied.

Mr Page responded by relying on section 24 of the 2000 Act. This provides that a failure by the trustees to act within the limits of their powers conferred by that part of the Act in (inter alia) authorising a person to act as nominee or custodian does not invalidate the appointment. He submitted, therefore, that a trustee who breaches sections 16 and 19 and appoints a nominee not permitted by those provisions, may commit a breach of trust as against the beneficiaries of the trust, but the appointment is not invalidated, including where the appointment is part of the formation of the trust.

I agree with Mr Page’s submission. Furthermore, I do not consider that sections 16 and 19 of the 2000 Act are concerned with the formation of a trust. Equity has long recognised that a bare legal estate can be vested in a person in trust for a trustee (i.e. as nominee): see, e.g., Angier v Stannard (1834) 3 My & K 566. The clear purpose of the relevant part of the Trustee Act 2000 is to regulate the powers of trustees of existing trusts, and not to prevent such an arrangement from coming into existence except in the circumstances provided in section 19(2). In referring to the powers of trustees, the appointment of a nominee for the purposes of section 16 will take effect only once the trust has been validly constituted.

It should also be borne in mind that the payment to Pumula was itself a valid transaction; the opposite has not been suggested. If there were otherwise an intention that it should hold as nominee (which in the event I have held there was not) then, if Ms Lacob were right as to the effect of section 19, the question would arise as to how Pumula held the money once it had been received. It seems to me that equity would not have permitted Pumula to deny the intended trust in such circumstances, and thus to use the statute as an instrument of fraud, and that a constructive trust would arise by analogy with Rochefoucauld v Boustead [1897] 1 Ch 196. The point, however, does not arise for determination.