Lea Lilly Perry v Lopag Trust R (a Trust Enterprise registered under the laws of the Principality of Liechtenstein)

• Jurisdiction: Cayman Islands
• Judgment Date: 27 May 2020
• Date: 27 May 2020
• Docket Number: CAUSE NO. FSD 205 OF 2017 (NSJ)
• Court: Grand Court (Cayman Islands)

In the Matter of the Estate of Israel Igo Perry Deceased

Between:

(1) Lea Lilly Perry

(2) Tamar Perry

Plaintiffs

and

(1) Lopag Trust Reg. (a Trust Enterprise registered under the laws of the Principality of Liechtenstein)

(2) Private Equity Services (Curaçao) N.V. (a Company incorporated under the laws of Curaçao)

(3) Fiduciana Verwaltungsanstalt (an Establishment incorporated under the laws of the Principality of Liechtenstein)

(4) Gal Greenspoon

(5) Yael Perry

(6) Dan Greenspoon

(7) Ron Greenspoon

(8) Mia Greenspoon (by Hagai Greenspoon, her guardian ad litem)

(9) Admintrust Verwaltungs Anstalt

Defendants

CAUSE NO. FSD 205 OF 2017 (NSJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

Equitable mistake — claim by the estate of a deceased businessman to set aside an inter vivos transfer of a valuable share to trustees of a Liechtenstein trust on grounds of mistake — matrimonial proprietary rights — claim by the deceased's wife that the she had a joint interest in the share under Israeli law and that since the transfer was without her consent it should be set aside

Appearances:

Mr David Brownbill QC instructed by Nicholas Dunne and Andrew Gibson of Walkers on behalf of the Plaintiffs

Mr Justin Fenwick QC instructed by Mark Goodman, Shaun Tracey and Natasha Partos of Campbells on behalf of the First and Ninth Defendants

Mr Graham Brodie QC instructed by Sam Dawson and Ardil Salem of Carey Olsen on behalf of the Fifth Defendant

Introduction and summary of my conclusions

1 This is my judgment, following trial, dealing with the Plaintiffs' claims relating to the share (the Share) in Britannia Holdings (2006) Ltd, a company incorporated in the Cayman Islands ( BH06).

2 The Plaintiffs seek to set aside the transfer of the Share by the late Mr Israel Igo Perry ( Mr Perry) to the First Defendant. The Share was to be held on a discretionary trust governed by Liechtenstein law. The trust is called the Lake Cauma Trust. The First Defendant was the original trustee of the Lake Cauma Trust. Subsequently the Ninth Defendant was also appointed a trustee.

3 There are two claims made by the Plaintiffs acting in different capacities. First, the First Plaintiff (who is Mr Perry's widow) claims that the transfer was made in breach of her proprietary rights in and to the Share arising under Israeli matrimonial property law, so that Mr Perry was not entitled to transfer the Share and to the extent he did so the transfer should be set aside as against her (the Israeli Matrimonial Property Claim), Secondly, the First Plaintiff and the Second Plaintiff (who is the elder daughter of the First Plaintiff and Mr Perry) also claim, in their capacity as the representatives of Mr Perry's estate for the purpose of these proceedings, that the transfer was made by mistake (the Mistake Claim). In particular, they argue that Mr Perry was mistaken as to the rights of discretionary beneficiaries under Liechtenstein law to enforce the obligations owed by the trustee and to apply to the court in Liechtenstein to remove the trustee and for other relief.

4 Both claims arise in the context of Mr Perry's relationship with his family and the investment and management of the wealth created by his business activities. The Mistake Claim arises out of Mr Perry's use of and transfer of assets into Liechtenstein trusts. The Israeli Matrimonial Property Claim arises out of the marriage and relationship between Mr Perry and the First Plaintiff and their use and treatment of such wealth and assets. There is a common context relevant to both claims. However, each claim involves different periods and fact patterns. The Mistake Claim focusses primarily on the reasons for and circumstances surrounding the creation of the Lake Cauma Trust on 1 May 2013 and the transfer of the Share to the First Defendant as trustee of the Lake Cauma Trust on 15 October 2013. The Israeli Matrimonial Property Claim focusses primarily on the nature of the relationship between Mr Perry and the First Plaintiff and the way in which they dealt with the property acquired or used by them during their marriage in the period up to the transfer of the Share to the First Defendant on 15 October 2013.

5 Both claims also arise in the context of two, related, hotly contested and acrimonious disputes. The first is between the First Plaintiff and the Second Plaintiff on the one hand and the Fifth Defendant, the younger daughter of Mr Perry and the First Plaintiff, on the other. There is sadly a long history of tensions and disputes within the Perry family, in particular between the First Plaintiff and her daughters. There remains a serious split within the family over the division and use of the family's wealth following Mr Perry's death in March 2015. The second is between the First Plaintiff and the Second Plaintiff on the one hand and the First Defendant on the other. The First Plaintiff and the Second Plaintiff believe that the First Defendant has deliberately and improperly sought to deprive them of their entitlements and acted in breach of duty as trustee of a number of settlements established by Mr Perry. These proceedings followed, and are largely a consequence of, the failure of the First Plaintiff and the Second Plaintiff to obtain the relief they were seeking against the First Defendant in proceedings in Liechtenstein. In these proceedings the Fifth Defendant has opposed the relief sought by the Plaintiffs although she has not always remained uncritical of the conduct of the First Defendant. While the Plaintiffs, the First Defendant and the Fifth Defendant have often sought to explain each other's conduct by reference to these ongoing complaints and hostilities, and while criminal proceedings have been launched in other jurisdictions and there have been a number of decisions in other courts in which criticisms and adverse findings have been made against the First Defendant's representatives and others, I have generally not found it necessary to decide whether the Plaintiffs' complaints against the First Defendant or the First Defendant's complaints against the Plaintiffs are justified. The alleged misconduct, while in some cases relevant to credibility of certain witnesses, is not directly relevant to the Mistake Claim or the Israeli Matrimonial Property Claim.

6 The trial of the Plaintiffs' claims concluded on 5 March last year. During the trial, additional discovery documents were obtained from a law firm that had originally declined to disclose them on grounds of privilege. The parties requested that they be given the opportunity to file, and I gave directions for the filing of, further written submissions dealing with those documents by 18 April 2019. Further written submissions were filed on that date and I deal with the submissions made below when discussing all the evidence relied on by the parties. On 25 September 2019, I confirmed to the parties, via my personal assistant, that I intended to distribute my judgment on or before 9 October 2019.

7 However, shortly after that, on 30 September 2019, Campbells (the Cayman attorneys for the First Defendant) wrote to the Court and filed an affidavit of Mr Fernando Linares ( Mr Linares) (the First Defendant's lawyer in Panama) that, in turn, exhibited translated statements from various individuals that included allegations that the Second Plaintiff had been involved in the fabrication of share certificates for a Panamanian company, European Holdings Investment Incorporation ( EHI) in order to seize control of it from the First Defendant. The First Defendant claimed that this new evidence was highly relevant to the evidence given by the Second Plaintiff at trial on the subject of the ownership of EHI and to the credibility of her evidence in general. Subsequently, the First Defendant issued a summons seeking permission to adduce and rely on the new evidence.

8 The Second Plaintiff strongly denied the allegations and asserted that the new evidence was itself manufactured and improperly obtained. She accepted that permission should be given for the filing of further evidence by both the First Defendant and herself and alleged that the First Defendant's reliance on the further evidence demonstrated that it was behaving dishonestly (in that it had conspired with those who had produced the new evidence to advance a false case against the Second Plaintiff). She issued a summons on 15 October 2019 seeking an order that the First Defendant's defence and counterclaim, which following a judgment and directions I had previously given, was not dealt with at the trial, be struck out on the basis that the First Defendant had advanced false evidence regarding the allegation that the Second Plaintiff had been involved in the fabrication of the EHI share certificates (the Strike Out Summons).

9 The First Defendant and the Plaintiffs eventually agreed that the Court should permit the filing by each of them of further evidence relating to issue of the share certificates in EHI and the Fifth Defendant filed submissions confirming that she did not object to this approach (although she had her doubts as to whether the filing of further evidence on the EHI issue was necessary). There were however differences of view as to the nature of the further evidence to be filed, in particular as to whether evidence from a handwriting expert should be given, and the scope of the proposed further hearing and the parties invited the Court to give a ruling on what directions should be given. Following a hearing on 24 October 2019, I delivered an ex tempore judgment on that day. I gave permission for the further evidence to be adduced but declined to order that further expert evidence be filed and ordered that there be a further but short hearing at which the new evidence could be tested by cross-examination. I said as follows:

“7. Carey Olsen [the Fifth Defendant's...