HSBC International Trustee Ltd v Tan Poh Lee

JurisdictionCayman Islands
CourtGrand Court (Cayman Islands)
JudgeKawaley
Judgment Date07 November 2019
Docket NumberCAUSE NO. FSD 175 OF 2019 (IJK)
Date07 November 2019

In the Matter of a Deed Constituting The Tan Kim Choo Family Scholarship Trust dated 21 October 2002 made between Tan Kim Choo as Settlor and HSBC International Trustee Limited as Trustee establishing a trust known as The Tan Kim Choo Family Scholarship Trust, as amended by a Deed of Appointment of Beneficiary dated 21 August 2009 (the “ Trust”)

And in the Matter of the Trusts Law (2018 Revision, as amended) and GCR Order 85

Between
HSBC International Trustee Limited
Plaintiff
and
(1) Tan Poh Lee
(2) Tan Poh Hui
(3) Tan Boon Thien
(4) Tan Poh Yee
(5) JCTW
(6) JCZM
(7) TJ K
(8) TJR
(9) TYT
(10) TZH
Defendants
Before:

The Hon. Justice Kawaley

CAUSE NO. FSD 175 OF 2019 (IJK)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

Application by Trustee for Beddoe relief in relation to defence of Singapore proceedings seeking to terminate Cayman Islands trust-Cayman Islands governing law and trust administration clauses-grant of declarations as to effect of clauses under Cayman Islands law

Appearances:

Ms Rachael Reynolds and Mr William Jones, Ogier, on behalf of the Trustee

Mr Sebastian Said and Ms Anya Martin, Appleby, on behalf of the 6 th Defendant (a minor) and the Unborn

IN CHAMBERS
EX TEMPORE RULING
Key provisions of Trust Deed
1

The Plaintiff in this matter is the Trustee of a trust known as the Tan Kim Choo Family Scholarship Trust, which was settled on 21 October 2002 (the “Trust”) and for present purposes the Trust Instrument contains two clauses.

2

Firstly, clause 26 (“PROPER LAW OF THE TRUST”):

“The Trust is established under the laws of the Cayman Islands and the initial proper law of the trust shall be the law of the Cayman Islands.”

3

Secondly, 27 (“FORUM FOR ADMINISTRATION OF THE TRUST”) records that:

“The Cayman Islands shall be the initial forum for the administration of the trust. The Trustee shall have power, subject to a perpetuity, not thereby being created to carry on the general administration of the Trust, from any country, province, state or territory, whether or not the law of such countiy, province, state or territory is for the time being the proper law of the Trust or its court are for the time being the forum for the administration of the Trust, and whether or not the Trustee is for the time being resident or domiciled in or otherwise connected with such country, province, state or territory. The Trustee may at any time declare by deed that from the date of such declaration, the forum for the administration of the Trust shall be the courts of any specified country, state or territory provided that no such declaration shall be made, which is in perpetuity.”

4

I should add that of peripheral relevance is clause 28, which further provides that the proper law may be changed by deed.

The Trustee's present application
5

The Trustee has applied by Originating Summons filed on 30 September 2019 for various directions, and the Court has already made certain Confidentiality Orders to anonymise the Originating Summons so that the identities of minor Defendants (and I believe also the young adult Defendants) are not revealed. The Defendants are all beneficiaries of the Trust.

6

The application arises because on 10 May 2019, the 3 rd Defendant in these proceedings issued proceedings against the Trustee in the Singapore High Court in proceedings HC/S471/2019 (“Singapore Proceedings”). The primary relief that is sought in those proceedings is as follows:

“(1) a declaration that the Trust in respect of the Settlement Fund is terminated.”

7

The Trustee, in short, is concerned to enforce and give effect to the exclusive forum for administration clause in a clause, namely clause 27, of the Trust Deed. Initially it has applied for a stay of the Singapore Proceedings but that application, which sought time to seek Beddoe relief from this Court, was refused and the position appears to be that the following critical timetable exists in the Singapore proceedings. The timetable relates at this point not to the substantive proceedings but an interlocutory mandatory injunction application that the plaintiff in those proceedings has filed, seeking payment out of all of the Trust assets:

  • (a) the Trustee is to file its reply Affidavit by 4.00 pm on 18 October, in two days' time. Having regard to time differences, it is less than two days from the present hearing;

  • (b) secondly, Tan Boon Thien, the plaintiff, is to file his final response Affidavit, if any, by 4.00 pm on 31 October 2019;

  • (c) thirdly, the parties are to file written submissions by 4.00 pm on 5 November 2019, and

  • (d) an oral hearing is to take place before Justice Aedit Abdullah on 8 November 2019 at 2.30pm.

8

The present proceedings were served on all adult Defendants and I am satisfied that all significant parties have had notice of these proceedings and have chosen not to participate. The 3 rd Defendant, the Singapore plaintiff, by correspondence with the Court, sought an adjournment of the proceedings on the grounds initially that he was having difficulties obtaining legal representation and secondly, on the grounds that he was applying for Legal Aid. At the beginning of today's hearing I indicated that I would not entertain the application because it was not properly before the Court. And on the face of the record, it appeared to be an unmeritorious application in any event. Ms Reynolds for the Plaintiff herein referred to an Affidavit, sworn by the 3 rd Defendant as plaintiff in the Singapore Proceedings, which set out his financial position and clearly contradicts the notion that he is impecunious and is unable to obtain legal advice.

9

An application was also made at the beginning of today's hearing to appoint Mr Sebastian Said of Appleby Cayman Limited, as Guardian ad Litem to represent the interests of the 6 th Defendant, one of the two minor Defendants, and also to appoint him to represent all persons who may become beneficially interested with special regard to the position of the unborn. That application I granted, as it seemed obvious that it was beneficial and expedient to have some presentation for those interests to avoid the need to incur costs and pursue possibly hopeless attempts to get legal representation for the minors and unborn in circumstances where no other Defendant was willing to come forward and either nominate a Guardian ad Litem or, indeed, stand as representative for those interests 1.

10

The 3 rd Defendant explicitly purported to represent his own son, the 7 th Defendant, and in those circumstances, it was decided that it was inappropriate to appoint Mr Said to represent the 7 th Defendant.

The directions sought by the Trustee
11

The various heads of relief that were sought fell into two broad categories: firstly, there was declaratory relief and, secondly, there was Beddoe relief. The Beddoe relief which was sought was limited to seeking the following broad relief.

  • (a) firstly, authorising the plaintiff to challenge the Singapore proceedings on the grounds of forum non conveniens as a preliminary issue, and

  • (b) in the alternative, inviting the Court in Singapore to direct that the Courts of the Cayman Islands shall act as an auxiliary Court for the purpose of determining any of the questions which were defined as follows:

    • (1) all questions concerning the settlor's capacity,

    • (2) the identity of the Trustee,

    • (3) the administration of the Trust,

    • (4) any past or future distributions from the Trust,

    • (5) any decision to decline a distribution, and

    • (6) a determination of the Trust, or part thereof,

      being questions which the Trustee submitted must be determined in accordance with Cayman Islands law without reference to any other law.

Legal Findings
12

I have little difficulty in approving those directions, which contemplate that, depending on the outcome of that application to the Singapore Court, the Trustee would return to this Court for further, more substantive directions if the need arose, and that eventuality would only arise if the forum challenge and alternatively the proposed auxiliary Court role for this Court were both rejected.

13

The primary legal basis for the Trustee seeking that Beddoe relief is...

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