The B Trust and Section 48 of the Trusts Act (2021 Revision) Order 85 of the Grand Court Rules (2023 Revision)

JurisdictionCayman Islands
JudgeJustice Kawaley
Judgment Date10 June 2024
Docket NumberFSD CAUSE NO. 32 OF 2024 (IKJ)
CourtGrand Court (Cayman Islands)
In the Matter of the B Trust
And in the Matter of Section 48 of the Trusts Act (2021 Revision) Order 85 of the Grand Court Rules (2023 Revision)
Before:

The Hon. Justice Kawaley

FSD CAUSE NO. 32 OF 2024 (IKJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Trusts law-non-contentious blessing of momentous decision-modernisation of trust structure through creation of new trust-validity of prior distributions-proposed new protector provisions explicitly conferring wide powers of consent-directions granted ‘on the papers’ Trusts Act (2021 Revision), section 48-Grand Court Rules, Order 85

Appearances:

Rachael Reynolds KC, Deborah Barker Roye and Chris Vincent of Ogier (Cayman) LLP for JTC (Cayman) Limited (the “Trustee”)

IN CHAMBERS
REASONS FOR DECISION
Background
1

The Trustee by Ex Parte Originating Summons dated 2 February 2024 sought the blessing of a momentous decision, namely the enhancement of the terms of a somewhat convoluted trust instrument through the creation of a new and more streamlined trust instrument. It was primarily supported by the First Affidavit of Michael Halsey (“Halsey 1”). Directions in relation to confidentiality and service were sought and on 19 February 2024 I directed that:

  • (a) an Anonymised Originating Summons could be filed for entry on the public Register;

  • (b) the application papers should be served on the two adult beneficiaries (X and Y), the Protector (Carlos de Serpa Pimentel) and the Attorney General;

  • (c) X should represent their future issue and Y should represent their children and future issue.

2

The Originating Summons when filed was in substance supported by both adult beneficiaries and positively supported by the Protector, who filed evidence of his own. On 3 May 2024 the Trustee's counsel asked for the matter to be listed for 26 or 27 May 2024, but also that the matter be dealt with on the papers. I confirmed that I would deal with the application on the papers; however the Summons was listed for hearing on 27 May 2024 as a precaution. On 22 May 2024, the Trustee's counsel filed their Written Submissions and a supplementary Affidavit sworn by attorney Chris Vincent exhibiting a formal letter of support for the substantive relief sought from Y dated 21 May 2024.

3

The application was ultimately straightforward, in large part because it was made by a professional trustee acting in a manifestly professional manner with the positive support of all key interested parties: the Adult Beneficiaries and the professional Protector, a seasoned trust lawyer well known to the Court. However it was entirely appropriate for the Trustee to not only seek the Court's blessing for a transaction which was momentous. It was also appropriate to obtain declaratory relief in relation to the validity of historic distributions by a predecessor trustee, the basis for which was not clearly documented.

4

On 27 May 2024, when the Originating Summons had initially been listed for hearing, I considered the application and decided it was appropriate to grant the Order sought. I now give brief reasons for my decision on 28 May 2024 to grant an Order in the following principal terms:

1. That the Trustee's proposed exercise of its powers under Article Second A(6)(h) of the Trust to appoint the assets of the Trust to a new trust on the terms of the deed set out at Appendix A (the New Trust) would be a proper exercise of its powers, and as regards such appointment the Trustee in making such appointment will be deemed to have discharged its duty as trustee of the Trust and the New Trust;

2. That the former trustees of the Trust had the power to make the distributions made from the Trust.

3. That all historic distributions made from the Trust shall be deemed to have been made in compliance with the terms of the Trust.”

Governing legal principles

5

The governing legal principles were uncontroversial. The Trustee's counsel firstly referred to section 48 of the Trusts Act (2021 Revision):

Any trustee or personal representative shall be at liberty, without institution of suit, to apply to the Court for an opinion, advice or direction on any question respecting the management or administration of the trust money, …such application to be served upon, or the hearing thereof to be attended by, all persons interested in such application, or such of them as the Court shall think expedient, and the trustee or personal representative acting upon the opinion, advice or direction given by the Court shall be deemed, so far as regards that person's own responsibility, to have discharges that person's duty as such trustee… in the subject matter of the said application.

Provided, that this shall not indemnify any trustee …in respect of any act done in accordance with such opinion, advice or direction as aforesaid, if such trustee…shall have been found to have committed any fraud, wilful concealment or misrepresentation in obtaining such opinion, advice or direction, and the costs of such application as aforesaid shall be in the discretion of the Court.”

6

As regards how this Court should approach a...

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