In the Matter of an Application for Information about a Trust
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In its 2014 decision, the Court of Appeal considered Chief Justice Kawaley’s first instance 2013 decision to order the production of trust documents to a beneficiary notwithstanding that the trust deed contained an information control mechanism designed to prevent disclosure of financial information unless the Protector (who was also the principal beneficiary) consented.
Although the Chief Justice Kawaley found the control mechanism clause to be valid (it did not violate the irreducible core requirements of a trust), he found that it did not seek to oust the supervisory justification of the Court. He found that the supervisory jurisdiction exists to enable the beneficiaries to hold trustees accountable to ensure the due administration of a trust.
Exercising its discretion, Justice Kawaley found in the circumstances of this anonymised case that the information control mechanism was not being operated in a manner that was substantially consistent with the presumed intention of the settlor. He thereafter ordered disclosure of certain financial documents subject to safeguards.
The protector appealed Justice Kawaley’s decision arguing that the supervisory jurisdiction of the Court should not be exercised where the Court ruled that the express disclosure mechanism was valid. Further disclosure should not have been ordered unless there was real concern that the Trust was being mismanaged and that the Court did not give due weight to the evidence in the case.
The Court of Appeal supported the Chief Justice’s conclusion that although the control mechanism was valid, it did not oust the jurisdiction of the Court. In its view, this could only be justified if it was consistent with the proper administration of a trust. The evidence did establish real cause for concern justifying the Court’s interference. The control mechanism was to be exercised in the interests of the trust and its beneficiaries notwithstanding that the Protector owed no fiduciary duties and notwithstanding that the Protector was one of the beneficiaries.
The Protector has appealed the matter to the Judicial Committee of the Privy Council.
Cases:
Supreme Court Decision:
In the Matter of a Trust [2013] SC (Bda) 16 Civ (12 March 2013)
Court of Appeal Decision:
In the Matter of an Application for Information about A Trust, [2013] CA (Bda) 8 Civ (5 February 2014)