Between: (1) Lea Lilly Perry (2) Tamar Perry Appellants v (1) Lopag Trust R (2) Private Equity Services (Curacao) NV (3) Fiduciana Verwaltungsanstalt (4) Gal Greenspoon (5) Yael Perry (6) Dan Greenspoon (7) Ron Greenspoon (8) Mia Greenspoon (9) Admintrust Verwaltungs Anstalt Respondents
| Jurisdiction | Cayman Islands |
| Judge | Sir Jack Beatson, JA,Sir Richard Field, JA,Sir John Goldring |
| Judgment Date | 19 November 2021 |
| Court | Court of Appeal (Cayman Islands) |
| Docket Number | CICA (CIVIL) APPEAL No. 16 of 2020 |
The Rt. Hon Sir John Goldring, President
The. Hon Sir Richard Field, JA
The Rt. Hon Sir Jack Beatson, JA
CICA (CIVIL) APPEAL No. 16 of 2020
(FORMERLY CAUSE NO FSD 205 OF 2017 (NSJ))
IN THE CAYMAN ISLANDS COURT OF APPEAL
ON APPEAL FROM THE GRAND COURT OF THE CAYMAN ISLANDS
Mr David Brownbill QC instructed by Mr Nicholas Dunne of Walkers (Cayman) LLC on behalf of the Appellants at the hearing. In respect of the application dated 6 August 2021 to amend the grounds of appeal, Mr Paul Chaisty QC instructed by Conyers Dill & Pearman LLP on behalf of the Appellants
Mr Justin Fenwick QC instructed by Campbells LLP on behalf of the Respondents
The Rt. Hon Sir Jack Beatson, JA
This appeal concerns the ownership of the single issued share in Britannia Holdings (2006) Ltd. (“BH06”), a company incorporated in the Cayman Islands. At issue is the validity of the purported transfer of the share in 2013 by the late Mr Israel Igo Perry to Lopag Trust Reg. (“Lopag”). Mr Perry, who died on 18 March 2015, was a wealthy businessman and a qualified Israeli lawyer. Lopag is a Trust Enterprise registered under the laws of the principality of Liechtenstein. The share in BH06 was to be held on the terms of a discretionary trust known as the Lake Cauma Trust established by Mr Perry on 1 May 2013 under Liechtenstein law. He also executed the transfer of the share on 1 May 2013 but, because of the need for regulatory approval by the Cayman Islands Monetary Authority (“CIMA”), the transfer was completed on 15 October 2013.
On 17 October 2017, Mr Perry's widow, Lea Lilly Perry (“Lilly”), and the couple's eldest daughter Tamar Perry (“Tamar”) obtained a proprietary injunction (later amended and continued until trial) preventing Lopag and other defendants from dealing with the assets held by BH06 or derived from dividends or distributions by it. In these proceedings launched on 30 November 2017 they challenged the validity of the transfer of the share. Lilly Perry claims that the transfer was void and should be set aside. Her case is that the transaction violated her matrimonial property rights under Israeli law because it was made without her knowledge or consent and without complying with the formalities required by Israeli law. This ground has been referred to as the “matrimonial property rights claim”. The second ground is that Lilly and Tamar Perry claim on behalf of Mr Perry's Cayman estate that the transfer of the share should be set aside because Mr Perry made the transfer as a result of his mistaken belief or tacit assumption that discretionary beneficiaries of Liechtenstein trusts have effective rights under Liechtenstein law to enforce the trustees' obligations and to apply to a Liechtenstein court to prevent action by the trustees in breach of trust, to remove trustees, and for other relief. This ground has been referred to as the “equitable mistake claim”.
There was a ten-day trial in February and March 2019. As well as purely factual evidence, the judge heard expert evidence on Israeli law on the matrimonial property rights claim and on Liechtenstein law on the equitable mistake claim. There was also a two-day hearing in January 2020 to consider allegations made by Lopag in September 2019 that Tamar Perry inter alia had forged the share certificates of a Panamanian company. In a judgment handed down on 27 May 2020 the judge dismissed Lilly and Tamar Perry's claims. They appeal against his order dated 27 July 2020.
On the matrimonial property claim, on behalf of Lilly Mr Brownbill QC submitted that the judge made four errors. The first was that Lilly Perry had consented to her husband dealing with the family's assets for tax or estate planning purposes and to him transferring such assets into trusts for this purpose, and that such consent can be inferred under Israeli law without knowledge of the specific transaction in question. The second was that the transfer did not require a formal property agreement confirmed by the court in accordance with Israel's Spouses (Property Relations) Law 1973. The third alleged error was that the judge found that the share in BH06 was a business asset so that Israeli law permitted Mr Perry to deal with it without Lilly's consent unless there had been a “ critical event” or a “critical date” in the marriage. The fourth was that he found that the transfer of the share did not constitute a critical event. On the equitable mistake claim, on behalf of Lilly and Tamar, Mr Brownbill submitted that the judge erred in concluding that they had failed to prove that Mr Perry transferred the share believing or tacitly assuming beneficiaries of discretionary trusts have effective rights under Liechtenstein law. He submitted that the judge also erred in concluding that the expert evidence showed that Liechtenstein law provides remedies which satisfy the requirements of effectiveness so that, even if Mr Perry held such a belief or made such an assumption, he was not mistaken.
The grounds of appeal challenge some of the findings of primary fact made by the judge after hearing the evidence of the witnesses, and some of his findings on Israeli and Liechtenstein law made after hearing expert evidence on those legal systems. It has therefore been necessary to consider the role of an appellate court when such findings are challenged.
The approach to challenges to a judge's findings of primary fact is considered at [72] – [76] below and the approach to challenges to on the substance of foreign law is considered at [77] – [83] below. At this stage it suffices to observe that Mr Brownbill accepted that findings on the substance of foreign law are matters of fact which must be pleaded and proved, and that the task of an appellate court is to police errors by the trial judge, not to determine the question of foreign law de novo. But he submitted that the position is different where a judge contributes his own legal skill and reasoning to derive relevant principles of foreign law from judgments of a foreign court in order to resolve a conflict between the evidence of the experts on that legal system. Such findings, he submitted, “can properly be reviewed by an appellate court just as an appellate court reviews findings on domestic issues of law”. In the present case, the appeal on questions of foreign law is generally not against the findings as to the substance of the relevant foreign law but against the application of that law to the judge's findings of primary fact.
On behalf of the trustees, Mr Fenwick QC submitted that the Appellants have not come close to demonstrating that the judge's conclusions on the challenged findings were ones which no reasonable judge could have reached. That, he maintained, was required where an appellant seeks to overturn findings of fact (as the Appellants do in relation to the finding that Lilly Perry consented to family assets being settled on trust by her husband) or of foreign law (as the Appellants do in relation whether the share is to be categorised as a “ business asset” and whether its transfer was a “ critical event” in the marriage).
There are nine Respondents to the appeal. The first and ninth Respondents, Lopag and Admintrust Verwaltungs Anstalt, two of the three current trustees of the Lake Cauma Trust, are the main and active ones. The third trustee, Cato Trust, is not a party to these proceedings, but the first and ninth Respondents' skeleton argument states that its contents have been approved by Cato Trust.
The fifth Respondent, Yael Perry, is the younger daughter of the late Mr Perry and Lilly Perry, and the sister of the second Appellant, Tamar. Yael Perry played an active role at the trial. She gave evidence, was represented by leading counsel, and largely supported the submissions made on behalf of the trustees. She took no active role and was not represented in the appeal.
The fourth, sixth and eighth Respondents, Gal, Dan, Ron and Mia Greenspoon, are the children of Tamar Perry and Hagai Greenspoon, to whom she was married between 1990 and 2013. They have taken no active part in the proceedings.
The second and third Respondents, Private Equity Services (Curacao) NV and Fiduciana Verwaltungsanstalt also took no active part. The second Respondent was appointed as a trustee of the Lake Cauma Trust by the lineal descendants of the late Mr Perry and Lilly Perry. The validity of this appointment has been contested by the first, fifth and ninth Respondents but the agreed case summary and chronology states that the validity of the appointment is irrelevant to the appeal. The third Respondent was originally appointed as an additional trustee of the Lake Cauma Trust and other Liechtenstein trusts established by the late Mr Perry by the Liechtenstein Court of First Instance on 13 January 2017 on the application of the Swiss Protectors Association (“SPA”), which had become the Lake Cauma Trust's Protector on 24 August 2015. Fiduciana's involvement is summarised at J[110(d)] – [110(k)]. It was removed as trustee by the Liechtenstein Supreme Court on 2 March 2017 but reappointed by the SPA. Following other decisions of the Liechtenstein courts, on 7 February 2018 it resigned as trustee of the trusts and was replaced by the ninth Respondent.
The remainder of this judgment is organized as follows. The background is in Part B. Part C summarizes the trial and the decision below. The approach of an appellate court to appeals against findings of fact and findings of foreign law is in Part D. Parts E and F deal with the appeals against the...
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