Ingham v Wardman

• Jurisdiction: Bermuda
• Judgment Date: 16 September 2021
• Docket Number: Civil Jurisdiction 2019 No 195
• Court: Supreme Court (Bermuda)

Between:

Jonathan Ingham

Nicholas Ingham (as beneficiaries of the estate of Elfrida Chappell)

Plaintiffs

and

Claudia Marie Ruth Radigan Wardman (both as Executor of George Alfred Wardman's estate and in her own capacity)

Alec R Anderson (as Executor of George Alfred Wardman's estate)

Butterfield Trust (Bermuda) Limited (as Executor and Trustee of the Estate of Elfrida Chappell)

Stephen Whitaker Kempe (as Executor and Trustee of the estate of Elfrida Chappell)

Defendants

[2021] Bda LR 108

Civil Jurisdiction 2019 No 195

In The Supreme Court of Bermuda

Application to set aside ex parte privacy order — Objection to interlocutory order mad by Beddoes Judge in main proceedings — Permission application by residual beneficiaries to bring derivative claim — Enforcement of orders made in foreign proceedings and confidentiality orders — Constitutional principles of open justice — Estate proceedings

The following cases were referred to in the judgment:

Re the B Trust; Medlands (PTC) Ltd v Attorney General [2020] Bda LR 42

Director of Public Prosecutions v Clarke [2019] Bda LR 46

Re BCD Trust (Confidentiality Order) [2015] Bda LR 108

Re the G Trusts [2017] Bda LR 124

Re the E Trust [2018] Bda LR 48

Ms C McDonnell QC and Mr R Horseman for the Plaintiffs

Ms F Rana-Fahy for the 1^st and 2^nd Defendants

Mr K Robinson and Mr K Masters for the 3^rd and 4^th Defendants

RULING of Subair Williams J

Introduction

1. By a summons application dated 6 July 2021 the Third and Fourth Defendants seeks to set aside an Order that I made on 25 June 2021 (the “Privacy Order”).

2. This is my Ruling on that application.

Factual Background

3. The Plaintiffs, Mr Jonathan Ingham and Mr Nicholas Ingham are two of the six grandchildren of the deceased, Ms Elfrida Chappell (the “Deceased”), who at the age of 101 years died on 15 July 2015. The Plaintiffs are said to be the beneficiaries of 50% of the Deceased's residual estate in equal shares with one another.

4. The Deceased had two children, the late Ms Mary Ingham who was the Plaintiffs' mother and the late Mr George Wardman who fathered the other four grandchildren of the Deceased. The other 50% of the Deceased's residual estate was, according to a 2008 Will, gifted to Mr Wardman absolutely provided that if he were to predecease his mother (which he did by precisely 3 months) his children surviving the Deceased upon the age of 21 years, would be entitled to the 50% of the residual estate.

5. Mr Wardman's widow, Ms Claudia Wardman, is the First Defendant in these proceedings in her personal capacity and as a co-executor of Mr Wardman's estate. The other executor of Mr Wardman's estate is the Second Defendant, Mr Alec Anderson. The Third Defendant, Butterfield Trust (Bermuda) Limited (“Butterfield Trust Ltd.”) together with the Fourth Defendant, Mr Stephen Kempe, are said to be the executors and trustees of the Deceased's estate pursuant to the 2008 Will.

6. In their capacity as executors and trustees of the Deceased's estate, the Third and Fourth Defendants filed separate proceedings in the Court's Beddoes jurisdiction (Case No. 155 of 2019) (the “Beddoes proceedings”) where I granted them permission to defend the Permission Application in an Order made on 8 January 2021. The Defendants named to the Beddoes proceedings are the Deceased, Mr Brendan Ingham and his sons, Messrs. Nicholas and Jonathan Ingham, in addition to the various members of the Wardman family.

7. Subsequent to the commencement of the Beddoes proceedings, on 15 May 2019 the Plaintiffs filed a Generally Endorsed Writ of Summons (the “Main Proceedings”). In the Main Proceedings, the Plaintiffs filed a derivative claim (the “Derivative Claim”) for relief arising out of a number of payments made between 2008 and 2015 out of the Deceased's account at Bank of N.T. Butterfield & Son Limited (“BNTB”). It is alleged by the Plaintiffs that the payments were made by Mr Wardman or made pursuant to his instructions, if not made by Mrs Wardman or under her own instructions. The Plaintiffs aver that the payments were procured by the undue influence of Mr Wardman and or his wife.

8. The Plaintiffs intend to seek the permission of a judge of concurrent jurisdiction (the “Permission Application”) to bring the Derivative Claim as residuary beneficiaries so to enable them to stand in the shoes which would ordinarily be worn by the trustees and executors of the Deceased's estate (the “Executors”). It is averred by the Plaintiffs that they will be able to establish special circumstances to warrant such an unusual approach on the basis that the Third and Fourth Defendants, Butterfield Trust Ltd. and Mr Kempe, respectively, are barred from prosecuting the claim due to conflicts of interest. The Executors, however, dispute that any such conflicts of interest arise and oppose the Permission Application which will be heard as part of the Main Proceedings. Crucially, the Executors' position is that the Derivative Claim, no matter who prosecutes it, is not in the best interest of the estate.

The Guernsey Proceedings

9. Proceedings in the Royal Court of Guernsey (the “RCG”) were commenced in 2019 (the “Guernsey Proceedings”) by Butterfield Trust (Guernsey) Limited as a trustee of the Wardman 1980 Trust. On 5 July 2021 the RCG ordered that the Guernsey proceedings would be heard privately and that the Court file in those proceedings would be sealed in addition to directing that any judgment of the RCG would be redacted and/or anonymised so to conceal the identity of the parties.

The Ex Parte Application to this Court for a Privacy Order

10. On 26 May 2021 Counsel for the Plaintiffs filed a summons application for the granting of the Privacy Order. The relief sought under that summons was for, inter alia, the granting of privacy orders (a) prohibiting any further disclosure and/or use of the Permission Documents by the Bermudian parties other than for the purposes of the Permission Hearing; (b) sealing the Court file in respect of the Permission Documents (the “Permission Documents”) and (c) directing for the Permission Application to be heard in private. The Registrar signed and dated that summons 25 June 2021 and also made it returnable for 25 June 2021.

11. A narrative on the background to the application for a Privacy Order from this Court is provided in the affidavit evidence of Mr Richard Horseman sworn on 12 July 2021 [7–8 and 10–11]:

“… 7. As the proceedings progressed, it became apparent to the Inghams that a number of the documents disclosed by the Trustee in the Guernsey Proceedings would be directly relevant to the derivative proceedings before the Supreme Court of Bermuda: Civil Jurisdiction 2019: no 195 (the Bermuda Proceedings).

8. On 22 December 2020 the Inghams applied to the Royal Court to be granted permission to use evidence produced in the Guernsey Proceedings in the Bermuda Proceedings.

…

10. On 24 May 2021 the Royal Court of Guernsey granted an Order, agreed by consent between the parties (the Guernsey Order [Exhibit “DOH 1”] (one party being Claudia Wardman a defendant in the Bermuda Proceedings and another being Butterfield Trust (Guernsey) Limited) that, subject to certain restrictions, the Inghams be permitted to provide as evidence a defined schedule of documents produced by the Trustee in the Guernsey Proceedings (the Relevant Guernsey Documents). Pursuant to the Guernsey Order, the Relevant Guernsey Documents can be shown to the parties' legal representatives in Bermuda, the other parties in the Bermuda Proceedings, their legal representatives and the Supreme Court of Bermuda.

11. On 26 May 2021 the Inghams made an urgent application to the Supreme Court of Bermuda seeking a privacy order in relation to the Permission Application, in order to comply with the Guernsey Order and that would allow the Permission Documents to be used in the Bermuda Proceedings.”

12. Two important observations immediately follow: (i) the Permission Documents are a sub-category of the Relevant Guernsey Documents (the “Relevant Documents”) and (ii) I granted the application urgently made on the papers without having been made aware that the Executors confirmed their intention to be heard in opposition to the application. I shall address these two points below.

The Relevant Guernsey Documents vs the Permission Documents

13. Under the 24 May 2021 RCG Order (the “RCG Order”) the parties to the Guernsey Proceedings agreed that the Relevant Documents, which is the broader class of documents, could be reviewed and used by the parties to these proceedings. However, the terms of the RCG Order in respect of the Permission Documents is more restrictive as it permits usage on the condition that this Court grants privacy orders sealing the Permission Documents and prohibiting the use of the Permission Documents outside of the Permission Application.

14. The RCG Order, in its relevant portions, provides:

“… AND FURTHER UPON the application dated 22 December 2020 of the Sixth and Seventh Respondents (hereafter the Use Application) Inter alia for an order granting them permission to use the evidence produced by the Applicant and/or the First to Fifth Respondents in the Guernsey Proceedings (the Guernsey Documents) for the purpose of derivative proceedings they have issued in the Supreme Court of Bermuda (the Bermudian Supreme Court) (civil jurisdiction 2019 No. 195) (the Bermudian Proceedings)

AND UPON the Court's Order on 30 April 2021 that the undertaking, arising out of the Privacy Order, not to use the Guernsey Documents for any collateral use shall be varied to permit certain Guernsey Documents to be reviewed by the Inghams' Advisers (as defined in that order) in order to assess the relevance of each such document against the claims made in the Bermudian Proceedings.

AND FURTHER UPON the Inghams' Advisers having provided a list of Guernsey Documents which they consider to be...