In a recent case in the Royal Courts of Jersey, a bank was fined for not obtaining the necessary authorisation before transferring the assets of a deceased client to a foreign court. This case serves as a useful reminder of the potential traps for institutions when dealing with estates, in particular when dealing with assets in a number of jurisdictions.
Abu Dhabi Commercial Bank PJSC (the “Bank“) held money in a number of accounts for one of their clients, Mr Varghese Abraham (the “Client“). This included over $400,000 in the Bank’s Jersey branch. When the Bank was notified of the Client’s death on 12 October 2017, it attached a ‘no debit’ instruction on all of his accounts, as per its internal procedures.
However, a court in the United Arab Emirates had ordered on 5 October 2017 that all money held by the Bank in the Client’s name be transferred to the court’s treasury. The Bank’s employees subsequently transferred the money from the Client’s account in Jersey in order to comply with the order of the United Arab Emirates court. Unfortunately, this transfer was in breach of Jersey law by dealing with assets of an estate without a grant of probate. A few weeks later, the Bank notified the Jersey Financial Services Commission once it became aware that the Client’s funds had been transferred in breach of Jersey’s probate laws.
Article 23 of the Probate (Jersey) Law 1998 sets out the criminal offence of ‘intermeddling’. Subject to a few exceptions, it provides that any person who administers any part of the moveable estate of a deceased person without first obtaining a grant, will be guilty of a criminal offence and liable to a fine or to imprisonment not exceeding one year or both. Therefore, despite the order of the United Arab Emirates court, the Bank should have obtained a Jersey grant in compliance with Jersey law before the transfer.
The Royal Court fined the Bank £25,000, and an extra £2,085 in compensation, after it admitted to one count of ‘intermeddling’. The Judge accepted that there had been no malicious intent in the transfer, such as an attempt to evade Jersey stamp duty, but nevertheless the mistake still meant an offence had been committed. He also noted that the consequences would have been very different had it been a case involving fraud.
This case highlights the importance of obtaining the necessary legal authorisation in all relevant jurisdictions before dealing with the assets of a deceased person. Intermeddling in an estate is also a criminal offence in a number of other jurisdictions, including Hong Kong and organisations should therefore ensure they have the correct procedures in place to deal with these requirements and that appropriate training is provided to employees to ensure those procedures are followed.