Briggs v Integritas Trust Management (Cayman) Ltd

• Jurisdiction: Cayman Islands
• Judge: (Schofield, J.)
• Judgment Date: 20 October 1989
• Court: Grand Court (Cayman Islands)
• Date: 20 October 1989

Grand Court

(Schofield, J.)

B.S. BRIGGS

and

INTEGRITAS TRUST MANAGEMENT (CAYMAN) LIMITED, G. BRIGGS and C. BRIGGS (by S.A. BODDEN, their guardian ad litem)

P. Lamontagne, Q. C. and C. Quin for the plaintiff;

A. Turner for the first defendant;

R.D. Alberga, Q.C. and T. Shea for the second and third defendants.

Cases cited:

(1) B. v. Trust Management, 1988–89 CILR N-22, applied.applied.

(2) Bonhote v. Henderson, [1895] 1 Ch. 742, dicta of Kekewich J. considered.

(3) Butlin”s Settlement Trusts, In re, [1976] Ch. 251; [1976] 2 All E.R. 483, dicta of Brightman J. applied.

(4) Fowler v. FowlerENR(1859), 4 De G. & J. 250; 45 E.R. 97.

(5) Hanley v. PearsonELR(1870), 13 Ch. D. 545.

(6) Joscelyne v. Nissen, [1970] 2 Q.B. 86; [1970] 1 All E.R. 1213, dictum of Russell, L.J. applied.

(7) Rose (Frederick E.) (London) Ltd. v. Pim (William H.) Jnr. & Co. Ltd., [1953] 2 Q.B. 450; [1953] 2 All E.R. 739.

(8) Shelburne (Countess of) v. Inchiquin (Earl of)ENR(1784), 1 Bro. C.C. 338; 28 E.R. 1166.

(9) Tucker v. Bennett.ELR(1887), 38 Ch. D. 1; dictum of Lopes, L.J. applied.

(10) Whiteside v. Whiteside, [1950] Ch. 65; [1949] 2 All E.R. 913.

Trusts-rectification-discretion of court-court has discretion to allow rectification of mistake in wording of settlement if does not implement settlor”s original intention-remedy may be refused against protesting trustee or if other convenient remedy available

Trusts-rectification-incorrect drafting of trust instrument-if no other convenient remedy available, court may rectify mistake in trust instrument caused by incorrect drafting by legal adviser failing to give effect to settlor”s intentions

Trusts-rectification-availability of alternative remedy-court may refuse to rectify trust instrument if convenient alternative remedy available-creation of new deed of appointment may be sufficient to allow trustee to nominate additional beneficiary to give effect to settlor”s intentions-not convenient remedy if risk of tax disadvantages

The plaintiff sought the rectification of two documents creating settlements.

The plaintiff gave instructions for the setting up of a life interest settlement and an accumulation and maintenance settlement in favour of his three children, the eldest of whom was his wife”s child by a previous marriage. All three children were to be treated in the same way so that they benefited equally from each settlement. The solicitor who drafted the settlements did not make clear notes of his instructions and neglected to define ‘beneficiaries’ and ‘principal beneficiaries’ to reflect the plaintiffs intention to include his step-daughter. This negligence was subsequently admitted to by the solicitors in support of the rectification. The plaintiff signed the prepared documents without reading them and these were formally placed with the trustee.

In the course of making a will at a later stage, intending once again that the three children should benefit equally, the plaintiff discovered that his step-daughter had not been named as beneficiary under the settlements. The solicitors suggested that a deed of appointment might be used which would allow the trustees to add the step-daughter as a beneficiary under the life interest settlement. The other settlement could not be immediately modified in the same way, since the shares of the other two children in the trust fund could not be altered until they had attained the age of 25 and they were now only in their early teens.

The plaintiff sought the leave of the court to rectify both settlements. The court adjourned to allow the trustees to indicate whether they would be willing to execute the deed of appointment.

The plaintiff submitted that this was a justifiable case for the court to grant rectification because (a) the evidence had clearly established that his intention had always been that the three children should benefit equally from the settlements; (b) he was entitled to rely on his solicitors and was in no way at fault in not noticing their mistake earlier; and (c) even though a remedy was available in relation to the life settlement, it was not a convenient one because it differentiated between the children and might result in his step-daughter feeling that some stigma attached to her.

It was submitted on behalf of the other two children that (a) the plaintiff had failed to adduce clear and convincing evidence of his intention to benefit his step-daughter before he made the settlements; the evidence showed an intention to do so only after the making of the settlements; and (b) the solicitor”s negligence must vicariously be that of the plaintiff and, where the error in the instruments could be attributed to the fault of the person seeking rectification, this was a factor that should weigh heavily against the granting of the relief sought.

Held, granting the rectification:

(1) Provided that a settlor can show convincing proof of his intentions at the time of creating a trust, the court”s power to grant rectification of a voluntary unilateral settlement extends to situations where a mistake had been made in the wording of the settlement or the wrong interpretation ascribed to particular words. The remedy may, however, be refused against a protesting trustee or where there are other convenient remedies available. In the present case, the court would therefore allow the rectification of the accumulation and maintenance settlement as there was convincing proof, reinforced by the solicitor”s admission of negligence, that the plaintiff had intended his stepdaughter to be an equal beneficiary under the trust and there was no other remedy available for achieving that result with immediate effect (page 465, line 31 – page 466, line 20; page 472, lines 5–15; page 473, lines 13–21).

(2) It was possible to modify the life interest settlement by the execution of a deed of appointment giving the trustee power to nominate the step-daughter as a beneficiary, if the trustee was amenable to adopting this procedure; that the step-daughter might feel some stigma at the differentiation between herself and the other children was not a factor to affect the availability of the remedy. However, since the trustees were subsequently advised that there might be tax disadvantages in employing this procedure, they were unwilling to adopt it and the court would accordingly also allow rectification of the life interest settlement, there being no other convenient remedy available (page 472, line 24 – page 473, line 2; page 473, lines 21–29; page 474, lines 25–37).

SCHOFIELD, J.: In this action commenced by way of
originating summons, the plaintiff, Barry Stanley Briggs (‘the
settlor’), is the settlor of two settlements made on October 29th,
20	1987, between himself and the first defendant, Integritas Trust
Management (Cayman) Ltd. (‘Integritas’). The settlements are
known respectively as the Barry Briggs Cayman Islands Life
Interest Settlement and the Barry Briggs Cayman Islands
Accumulation and Maintenance Settlement. Both settlements are
25	expressed to be subject to the laws of the Cayman Islands. The
settlor sought the advice of London solicitors with respect to tax
planning matters arising out of a proposed sale of shares in a
company called Technology Group Ltd. Discussions led to the
setting up, some months later, of the two settlements referred to
30	above. In both settlements ‘the children and remoter issue of the
settlor now in existence or born hereafter’ are among the listed
beneficiaries and are defined as the principal beneficiaries.
The settlor has two children by his wife, Gemma Briggs and
Clare Briggs, who are now 14 years and 12 years respectively. I
35	shall refer to these two children as ‘the infant defendants.’ They
have been brought into these proceedings as the second and third
defendants through a guardian ad litem, Sherri Bodden, an
attorney-at-law in these Islands. The settlor”s wife was previously
married and divorced and by that previous marriage had a child,
40	now aged 22 years, named Kerry Dale. The settlor maintains that
he has throughout his marriage regarded Kerry as a daughter and

intended Kerry to be a beneficiary and principal beneficiary
under the two settlements and, indeed, so instructed his
solicitors. The definitions of ‘beneficiary’ and ‘principal bene-
ficiary’ in the two settlements do not, as they stand, include the
5	settlor”s step-child and so this application is brought for rectifica-
tion of the two settlements by the insertion of a new sub-cl. (7) at
the end of cl. 2 of each settlement in the following terms:
‘(7) Provided that for the purpose of the definitions of
beneficiaries and the principal beneficiaries hereinbefore
10	contained and for all other purposes of this settlement the
children of the settlor shall include Kerry Dale, the step-
child of the settlor.’
The application is contested, and quite rightly so, to ensure
that the interests of the two infant defendants are protected. If
15	the application succeeds then it operates to the detriment of those
two children and whilst counsel for the two infant defendants
quite fairly stated that he does not allege wrongdoing or
fabrication of evidence he had a duty to test the quality of the
evidence to see if it comes up to the high standard of proof
20	required to obtain the remedy sought. His submissions were to
the effect that it fell far short of the standard required. For that
reason I must go into the evidence, which was wholly by way of
affidavit, in some little detail.
The settlor has a business partner called Granville Smithies,
25	who was a major shareholder in Technology Group Ltd., and
with whom he worked very closely. Both men were fully aware of
each other”s personal financial

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