Re the GC Settlement (ruling on variation)

• Jurisdiction: Bermuda
• Judgment Date: 25 January 2021
• Docket Number: Civil Jurisdiction 2019 No 203
• Court: Supreme Court (Bermuda)

[2021] Bda LR 7

In The Supreme Court of Bermuda

Civil Jurisdiction 2019 No 203

In the matter of the GC Settlement

And in the matter of the Trustee Act 1975

And in the matter of order 85 of the Rules of the Supreme Court 1985

Mr D Brownbill QC and Mr K Robinson for the Trustees

Mr N Le Poidevin QC and Mrs F Rana Fahy for the Protector

The following case was referred to in the judgment:

Re the F Trust [2015] Bda LR 116

Jurisdiction of the court to set aside flawed exercise of fiduciary power — Application for grant of power to trustees to vary terms of the settlement

RULING of Hargun CJ

Introduction

1. Following the hearing of the application by the trustee of the GC Settlement (“the Trustee”), the Court made, inter alia, the following orders on 15 December 2020:

• (a) The deed of variation executed by the Trustee or before 4 November 2019, pursuant to the Order made by this Court on 16 July 2019 (“Deed of Variation”), be set aside provided that neither (i) the exercise of any power by the Trustee, nor (ii) the grant of any consent by the protector of the GC Settlement (“the Protector”) shall be invalidated by the setting aside of the Deed of Variation and shall remain as valid after the Order as before.

• (b) There is conferred upon the Trustee, a power to vary the trusts, powers and provisions of that trust by executing a deed substantially in the form of the deed shown in the schedule to the draft order.

• (c) Without prejudice to the proviso in sub-paragraph (a) above, the Protector shall be entitled to be paid or reimbursed out of the assets of the GC Settlement, as the protector thereunder, all fees and expenses to which it would have been entitled to be paid or reimbursed but for the setting aside of the Deed of Variation in accordance with sub-paragraph (a) above.

2. I set out below brief reasons supporting the orders made on 15 December 2020.

Background

3. At the conclusion of the earlier hearing on 5 June 2019, the Court made an Order that the Trustee shall have the power, under section 47 of the Trustee Act 1975, to vary the terms of the trusts by executing the Deed of Variation. Brief reasons which led the Court to make that order are set out in my Ruling dated 14 June 2019. The reasons included the fact that, as a result of the review by the Trustee, with the support of the then Protectors, the Trustee took the view that the GC Settlement needed substantial revision, under which the beneficiaries would retain all of the existing control powers at the level of the sub- foundation but would relinquish their direct powers at the trust level, whilst at the same time the Protector's powers under the trusts would be enhanced by the introduction of a straightforward power to appoint and remove trustees. The existing governance structure would be retained but the present individual protectors would be replaced by a corporate protector and fixed terms of office would be introduced for the directors of the trust company (5 years) and the corporate protector (6 years).

4. The proposed revised deed of settlement was intended to reflect, inter alia, the following changes:

• i. The simplification of...