“I want it to be there to benefit my grandchildren”

Summary of the hearing at the High Court in London on Urr Navigation Trust

Meet lovely Brian Hall, one a the members of the public who came to the hearing in London at the High Court on the Urr Navigation Trust. He joined the crew from Palnackie for lunch afterwards, and when asked why he had come, it was because we were protecting the inheritance of those coming after us, including his own grandchildren. I have chosen to headline with Brian, as representative of his family, since his young ones are among the beneficiaries of the trust — and everything is ultimately about the beneficiaries.

This is my summary of the hearing, which is a bit more technical than most of my writing, so it is as much for the historical record as for readers in the present. The application to the court is to force the former (delinquent and unelected) trustees to account for their actions, including giving trust funds away to non-beneficiaries. One of them has contested the jurisdiction in which the case needs to be heard, and a barrister was the sole representative of the defendants physically in court.

The dispute over jurisdiction arises because the trust was established under a 1901 order from Parliament sitting in Westminster, while the River Urr and physical assets are in Scotland. In the final accounting it is unimportant which jurisdiction applies, only that justice is done lawfully and correctly, so the hearing was not one to “win” or “lose”. Wherever accountability for past deeds needs to be conducted is the right venue. As such, the hearing could take a more inquisitorial stance, as jurisdiction is not an emotive moral matter per se. The tone was thus kinder than might be the norm.

Every part of this matter is outside of my own core expertise, so if there are lapses in terminology, fact, or law then please forgive me. I am presenting this as a layman and citizen journalist, not a trained expert or professional court correspondent.

Voluntary trust versus statutory trust

Unsurprisingly, this is not the first time that the jurisdiction of a trust under litigation has had to be decided. The reference case is Gomez & Ors v Encarnacion Gomez-Monche Vives & Ors [2008]. However, this has a critical difference to the case with Palnackie, as it is a voluntary trust, not one established by statute. The case with the port at Palnackie on the River Urr is most unusual in this way, as statutory trusts are a very rare breed.

Jurisdictional matters

Trusts have a “domicile” and a legislative context that defines it, being examined under the Recognition of Trusts Act 1987. This states the trust’s most real and closest connection determines its domicile, considering administration, assets, and residence — unless there are special circumstances, to which we will return. The Civil Jurisdiction and Judgements Act 1982 dictates when trusts are defined. Intra-UK jurisdictional conflicts, particularly regarding trust laws (per the 1982 Act), are to be considered in this case. The Civil Jurisdiction Judgements Act provides a framework for determining trust definitions and jurisdiction, and statutory versus voluntary trusts are distinguished.

Legal texts and authorities

The standard reference in this area is Dicey, Morris & Collins on the Conflict of Laws. There is also the Hague Convention 1985 on Trusts which has relevance to UK law. The application of Scottish law to comes from the trusts, citing the Trusts (Scotland) Act 1921.

While reference to the “Urr Navigation Order” suggests a Scottish trust, the River Urr being in Scotland, the governing law of trusts created by Parliament could be associated with English law, as indicated by historical acts and case law. All the above have to be reconciled.

Specific case points

• The domicile of the trust is defined by its “closest and most real connection” to a part of the UK, but the trust may also state an explicit system of law, which could be different. In the absence of an explicit system of law, as in this case, special factors may override this closest connection.
• Legal fees and account filings pertain to Scotland, indicating the trust’s operations are primarily Scottish. The need for Scottish expert witnesses in London courts suggests a jurisdictional complication. The disposition of harbour land being under Scottish law may influence where legal actions should be taken.
• Acts of Westminster have competence to legislate for Scotland, but this is normally done explicitly by putting “(Scotland)” in the title. However, there is a possibility that Scottish courts are less equipped to change trustees than English courts.
• The “Trust Ports” reference indicates an association with maritime law and the governance of ports, potentially differentiating between private, municipal, and trust ports. It is not entirely clear that the matter belongs in a civil and commercial court, even if it is English jurisdiction; it may be an admiralty matter.
• Investments in trust ports are hard due to the structure where all beneficiaries are affected by a single investment. There is legislation, centred on the specific needs of Dover but applicable to all, that attempts to remedy this by allowing ministers to waive rules. In this case, it would be a Scottish minister who decides.
• Any change to a port needs a Harbour Revision Order, and this includes jurisdictional changes. There has been no such order in respect of the Urr Navigation Trust, and therefore it is presumed Palnackie has always been governed by the same jurisdiction since when the trust was formed.

Wider implications for trust ports

• Trust ports might require uniform rules for stakeholder expectations and legal certainty. Every trust port should be evaluated on its own merits within the overarching structure. It is important that any judgement in respect of the Urr Navigation Trust does not upset that bigger picture. Precedent for the case is not clear, suggesting uncharted legal territory.
• There’s a question of whether the tradition of English law applies or if local (Scottish) law should prevail due to practical considerations of asset management and beneficiaries’ location. Which rules are chosen in this case could conflict with existing practises, therefore having far wider ramifications.

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The case made for it being a Scottish trust would be compelling if it were a “TRUST port” and not a “trust PORT”. In the final analysis, it’s “port-ness” as part of a network of ports under maritime jurisdiction carries the day. The suggestion that English jurisdiction is “misconceived” actually applies to the Scottish option, but through no lack of diligence by the advocate of that hypothesis. There is subtlety in play here that paradoxically exhibits the vitality of the adversarial system, as it tests the applicable boundaries of arguments. Every case is unique, and that is unquestionably so in this matter.

Moving from reportage to analysis, my take-away is as follows:

• This case concerns a seaport — a facility enabled by a harbour, but distinct from it in purpose. The marine nature of this trust, governed by maritime law, is fundamentally different from that of a local asset like a playground. The Urr Navigation Trust (UNT) exists to facilitate end-to-end navigation, not perpetual docking on the River Urr; it is not the “Urr Riverside Trust”.
• Beneficiary interests are paramount, not the convenience of former trustees. UNT beneficiaries are geographically diffuse, with significant ties to England. Palnackie’s location emphasizes this cross-border aspect. The port’s utility lies within the overall system of seaports.
• Domicile claims based on case administration convenience, such as individuals using the Palnackie workshop as a postal address, are irrelevant. The trust’s future and the interests of traveling beneficiaries from diverse locations must guide the selection of trustees.
• The defendants’ domicile reflects their non-seafaring interests. Their actions in transferring land from the beneficiaries, who did not lawfully elect them, demonstrate a failure to uphold their fiduciary duties. Emphasizing their domicile would compound the harm already caused to the beneficiaries.
• To ensure legal certainty and prevent conflicts stemming from this case, the jurisdiction within which beneficiaries can hold trustees accountable must be predictable and aligned with prior port-related cases.
• Trusts operate within a dynamic context where factors like assets, trustee location, and transactions can change. The one invariant is the jurisdiction where the grantor created the trust (absent an explicitly specified governing law, as with the UNT). This jurisdiction determines the legal framework governing the trustee-beneficiary relationship.
• Variable jurisdiction based on operational matters introduces legal uncertainty. To protect beneficiary interests, the intention of the 1901 order must have been to establish clear jurisdiction. This case must be adjudicated under English law to avoid unintended consequences for other trust ports.
• Devolution is an operational matter, not affecting trust domicile or governing law. Scottish ministers may determine Harbour Revision Orders (HROs) for ports within their purview, but changes to trust jurisdiction potentially require higher-level authorization. As no HRO or transfer of jurisdiction has occurred, the trust logically remains under English jurisdiction.
• Parliament in Westminster would not intend to deny English beneficiaries the full protections of English trust law. The trust’s origin in English jurisdiction, combined with the beneficiaries’ freedom to travel, simplifies adjudication. This case is categorically distinct from that of a local asset, as it is governed by maritime law.
• Inconsistent practices with previously cited cases or diminished beneficiary rights are untenable. Modern trust ports like Aberdeen may well prefer English law for its advantages. A precedent set based on the UNT’s former trustees, accused of misappropriation, would be perverse.
• To avoid conflicts and uphold existing case law, the jurisdiction governing the trustee-beneficiary relationship must be determined by the trust’s founding framework – akin to constitutional statutes. Applying a Gomez-type test for a trust established by Parliamentary Order risks judicial overreach.

That both sides foresaw an “obvious and automatic” win for their position shows how justice requires a learning and accommodating approach. I could not possibly have written this article prior to the hearing, and that it has surfaced so much new information and ideas demonstrates the intrinsic value and integrity of law being practised with honour and honesty.