The X Trusts

• Jurisdiction: Bermuda
• Court: Court of Appeal (Bermuda)
• Judge: Clarke P,Kay JA,Gloster JA
• Judgment Date: 18 January 2024
• Neutral Citation: BM 2024 CA 1,[2024] CA Bda 1 Civ
• Docket Number: Civil Appeal No. 20 of 2021

In the Matter of the X Trusts

Neutral Citation Number: [2024] CA (Bda) 1 Civ

Before:

THE PRESIDENT, Sir Christopher Clarke

JUSTICE OF APPEAL Sir Maurice Kay

and

JUSTICE OF APPEAL Dame Elizabeth Gloster

Civil Appeal No. 20 of 2021

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE SUPREME COURT OF BERMUDA SITTING IN ITS

ORIGINAL CIVIL JURISDICTION

THE HON. ASSISTANT JUSTICE IAN KAWALEY

CASE NUMBER 2018: No. 40

Mr Simon Taube KC of counsel and Mr Thomas Fletcher of counsel and Ms Lilla Zuill, Zuill & Co., for D1, D5, D8, D9-D12 (“the B Branch”)

Mr Brian Green KC of counsel and Ms Anna Littler of counsel and Mr Matthew Watson, Cox Hallett Wilkinson Limited, for D3 (“the A Branch”)

Mrs Elspeth Talbot Rice KC of counsel and Ms Judith Roche, Conyers Dill & Pearman Limited, for the Trustees

Mr Keith Robinson and Mr MacKay, Carey Olsen Bermuda Ltd., for the Protectors

APPROVED RULING ON LEAVE TO APPEAL

Clarke P

1 In this case the parties referred to as “A and Others” (hereafter “the Appellants”), seek leave to appeal to His Majesty in Council from the final judgment of this Court dated 17 February 2023 (revised 23 February 2023). The facts and issues are well known to the parties and I shall not expend time summarising them

2 The Appellants contend that they are entitled to appeal as of right pursuant to section 5 of the Appeals Act 1911 (“the Appeals Act”); and, if that be not so, that we should grant leave to appeal as a matter of discretion. The opposing parties, referred to as “C and Others” (hereafter “the Respondents”) deny that the Appellants are entitle to appeal as of right and submit that this is not a case in which we should grant leave as a matter of discretion,

3 Both sides have filed extensive written submissions, and the Trustees and the Protector have also filed limited submission in relation to particular matters. We have considered all of them.

4 Section 2 of the Appeals Act provides:

“When appeal lies

2 Subject to this Act, an appeal shall lie —

• (a) as of right, from any final judgment of the Court, where the matter in dispute on the appeal amounts to or is of the value of $12,000 or upwards or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $12,000 or upward;

• …

• (c) at the discretion of the Court, from any other judgment of the Court, whether final or interlocutory, if in the opinion of the Court, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to Her Majesty in Council for decision.”

5 The threshold of $ 12,000 (equivalent to something like $ 200,000) today is anachronistic. Not surprisingly this Court has sought to apply a restrictive interpretation to this section: see paragraphs [12] – [14] below.

6 In the present case the Supreme Court is concerned with proposals made by the Trustees of the X Trusts to partition all of the property of the Trusts (said to be worth upwards of £ 4 billion) between two branches of the family by allocating the bulk of it to the members of the A branch, now comprising 5 members, with the balance allocated to the members of the B branch, now comprising 14 members. The Trustees do not suggest that they can implement those proposals without the consent of the Protectors of those Trusts that have Protectors (which is almost all of them).

7 The issue before the Supreme Court and, on appeal, before us was as to the scope of the powers of the Protectors of the Trusts. The Trusts contain a provision in these or similar terms:

“ 2. Restriction on power to appoint capital

The Trustees shall not exercise their power to appoint, distribute or pay any part of the Trust Fund to or for the benefit of any member of the Appointed Class or any Beneficiary without obtaining the prior written consent of the Protectorate, nor, if the Trustees' consent is required for any appointment of capital, shall they give their consent without the prior written consent of the Protectorate.”

8 At paragraph [20] of her judgment Gloster JA referred to the summons which led to the determination of the Supreme Court as seeking an answer to the following questions:

“ (1) whether, on the proper interpretation of the relevant trust instruments, the role of the 16th and 17th Defendants as protectors of the trusts identified in Appendix A to the Originating Summons dated 21 February 2018 (the X Trusts) (or any of them) (save for the settlement known as [X Trust] numbered 365 in Appendix A to the Originating Summons) in exercising their powers to consent to the exercise of powers vested in the Plaintiffs (or any of them) is:

• (a) to exercise an independent discretion as to whether or not to give consent to a proposed exercise of power by the Plaintiffs (as trustees of the X Trusts) (or any of them) which requires the protectors' consent, taking into account relevant considerations and disregarding irrelevant considerations so that the protectors might withhold their consent to a proposed exercise of power by the Plaintiffs even if the proposed exercise of power was an exercise of power which a reasonable body of properly informed trustees was entitled to decide upon (the latter being a relevant factor, but not the only relevant factor,...