RHB Trust Company Ltd v Butlin

• Jurisdiction: Cayman Islands
• Judge: (Harre, J.)
• Judgment Date: 14 October 1992
• Court: Grand Court (Cayman Islands)
• Date: 14 October 1992

Grand Court

(Harre, J.)

RHB TRUST COMPANY LIMITED

and

BUTLIN and FOUR OTHERS

RHB TRUST COMPANY LIMITED

and

BUTLIN and SEVEN OTHERS

A. Turner for the applicant.

Cases cited:

(1) Galloway v. GallowayELRUNK, [1956] A.C. 299; [1955] 3 All E.R. 429, dictaof Viscount Simonds applied.of Viscount Simonds applied.

(2) Minister of Home Affairs v. Fisher, [1980] A.C. 319; [1979] 3 All E.R. 21, dicta of Lord Wilberforce applied.

(3) Sydall v. Castings Ltd., [1967] 1 Q.B. 302; [1966] 3 All E.R. 770, dicta of Diplock and Russell, L.JJ. applied.

(4) Watson-Morgan v. Grant, 1990–91 CILR 81, considered.

Trusts-beneficiaries-children-illegitimate child or issue claimingthrough illegitimate line not to be treated as beneficiary within meaning of words ‘child’ or ‘issue’-common law construction applicable in Cayman Islands-unless displaced by express words or particular circumstances-wider implications to be considered, particularly effect on other families entitled to assume common law construction

The trustees of two family settlements applied ex parte for a direction as to the meaning of the word ‘children’ appearing in both settlements.

One of the beneficiaries named in each of the settlements had an illegitimate child. The settlements referred to named beneficiaries and ‘their issue’ in the one case, and in the other, ‘together with the children and remoter issue through all degrees of the person specified.’ Both settlements were governed by the laws of the Cayman Islands. The trustees applied for a direction as to whether it would be proper to treat the child as a beneficiary under the trusts; the beneficiaries were all in agreement that the child should be treated as such a beneficiary.

Held, giving the direction sought:

The prima facie meaning of the words ‘child’ and ‘issue’ at common law excluded illegitimate children or issue claiming through illegitimate

children, although this construction could be displaced by the circumstances of a particular case or the language of a document. Since there had been no legislation in the Cayman Islands to reverse the common law presumption, the courts had no general power to do so themselves but had to consider the context in which the words appeared, as well as the wider policy implications there might be in recognizing any deviation from the rule. Although the matter was not contested, the court was obliged to consider the effect on the affairs of other families who were entitled to assume that the common law construction would be applied. Accordingly, the court would direct that no illegitimate child of a beneficiary could be included within the class of beneficiaries provided for in the settlements (page 222, lines 4–7;page 223, line 39 – page 224, line 15).

HARRE, J.: This judgment is concerned with applications by
RHB Trust Co. Ltd. as trustees for two settlements governed by
the laws of the Cayman Islands, the Lady Sheila Butlin Overseas
Settlement and the Butlin Overseas Settlement. I shall refer to
25	them respectively as the Lady Sheila settlement and the Butlin
settlement. The terms of the two settlements differ somewhat in
the relevant particulars but I will deal with the two originating
summonses together because in my judgment the issues relating
to each are the same.
30	Among the beneficiaries of the Lady Sheila settlement are
certain named individuals and their issue. The Butlin settlement
also has among its beneficiaries certain named individuals-
‘together with the children and remoter issue through all
degrees of the persons specified . . . and the spouses,
35	widows, and widowers of such children and remoter issue
whether now in existence or hereafter to be born during the
trust period.’
One of the individuals named in both settlements has given
birth to an illegitimate child. The question which I am asked to
40	determine is whether this child is to be regarded as a beneficiary
under each or either of the settlements. Happily, the application

is not contentious and

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