Re the B Trust; BCT Ltd v Medlands (PTC) Ltd and ors

• Jurisdiction: Bermuda
• Judgment Date: 04 May 2022
• Court: Supreme Court (Bermuda)
• Docket Number: Commercial Jurisdiction 2018 No 476

In the matter of the Trust settled by A Eugene Brockman on 26 May 1981 for the benefit of his children and charities

In the matter of the Rules of the Supreme Court Order85 and Part IV of the Trustee Act 1975

Between:

BCT Limited (in its capacity as Trustee)

Plaintiff

and

Medlands (PTC) Limited (in its capacity as the Former Trustee)

Attorney General (in her capacity as Representative of the Charitable Beneficiaries)

Martin Lang (in his capacity as the Trust Protector)

Dorothy Kay Brockman (in her personal capacity and in her capacity as the Representative of the other human discretionary and contingent beneficiaries pursuant to RSC Order 15/13)

Defendants

[2022] Bda LR 38

Commercial Jurisdiction 2018 No 476

In The Supreme Court of Bermuda

Application for the form of Order to be settled from previous ruling — Supervisory and equitable jurisdiction to sanction indemnities of outgoing trustee

Mr K Robinson for the Plaintiff

Mr Mr R Ham QC and Mr M Mason for the 1^st Defendant

Ms L Sadler-Best for the 2^nd Defendant

Mr J Machell QC and Mr L Preston for the 3^rd Defendant

Mr F Tregear QC and Ms S Hurrion for the 4^th Defendant

RULING of Subair Williams J

Introduction

1. The factual and procedural background to these proceedings may be understood by reference to the below list of previous reported judgments:

• i. St John's Trust Company (PVT) Ltd v Watlington and Ors[2020] Bda LR 25 (Application for strike-out), per Hargun CJ;

• ii. Re the B Trust, Medlands (PTC) Ltd v Attorney General et al[2020] Bda LR 42 (Beddoe and Administrative Proceedings: Disclosure and Joinder Applications), per Subair Williams J;

• iii. St John's Trust Company (PVT) Ltd v Watlington and Ors[2020] Bda LR 76 (Consequential Relief), per Hargun CJ;

• iv. St John's Trust Company (PVT) Ltd v Watlington and Ors[2021] Bda LR 14 (Leave to Appeal Costs), per Hargun CJ;

• v. Medlands (PTC) Ltd and Ors v Commissioner of the Bermuda Police Service[2020] Bda LR 26 (Judicial Review), per Hargun CJ;

• vi. Re the B Trust, Medlands (PTC) Ltd v Attorney General et al[2021] Bda LR 121

• vii. Re the B Trust, Medlands (PTC) Ltd v Attorney General et al[2021] Bda LR 106 (Appointment of new trustee and indemnities), per Subair Williams J;

The Present Application

2. The present application arises out of the most recent ruling from this Court made on 12 May 2021 (“the May Ruling”), by which I declined a category two Public Trustee v Cooper application for this Court to assume BCT Limited's power of discretion to grant indemnities or to decide the issue of a retention of trust funds. In the May Ruling I outlined the extent of this Court's approval and blessings in the form of non-binding opinions, given the sufficiently momentous impact of the sums of money involved in the indemnities which were in question.

3. In the May Ruling I expressed various opinions to show this Court's approval of the following proposed indemnities:

• i. Medlands' legal fees relating to the handover process between Medlands and BCT Limited;

• ii. The uncontroversial indemnity claimed by Medlands in respect of its Court-ordered liability to indemnify the former trustees. (However, it was also my general view that with the change of trusteeship, Medlands' liability for those indemnities should pass on to the new trustee);

• iii. Medlands' costs associated with bringing Mr Gilbert's directorship in Medlands to an end;

• iv. Medlands' costs for Mr Gilbert's communications and his examination of information and documents regarding Point Investments Ltd (“PIL”);

• v. Medlands' costs associated with its liability for Zobec's administrative services during its tenure as trustee and in bringing that trusteeship to an end;

• vi. Medlands' legal fees arising out of any cooperation it provided to the DOJ in relation to the Trust when Medlands was the Trustee and

• vii. The costs of keeping Medlands ‘alive’ (The extent of approval here was for coverage of the expense of Medlands' registration and regulatory requirements needed for it to see the 376 proceedings through to completion.

4. For the indemnities which I considered worthy of apprehension or disapproval, I provided my reasoning which applied to the following indemnities requested by Medlands:

• i. Mr Gilbert's costs of defending the Cayman Islands Court proceedings commenced by Messrs. Watlington and Ferguson;

• ii. The costs of an appeal from the 447 proceedings and

• iii. The Conyers Indemnity

5. I also refused the invitation made to this Court for its sanction of a retention of funds for Medlands.

6. This Court is now asked to construe the May Ruling (i.e. its refusal to accept or exercise BCT Limited's discretionary power to decide on the issuance of various indemnities) with its earlier Order of 26 March 2021 (“the March Order”). In the March Order BTC Limited was formally appointed as the new trustee and I directed that the terms of the outgoing trustee were to be settled in accordance with a Schedule annexed to the Order, which in material part provided that the...