Wong and Wong v Grand View Private Trust Company Ltd

• Jurisdiction: Bermuda
• Judgment Date: 05 June 2019
• Docket Number: Commercial Jurisdiction 2018 No 18
• Date: 05 June 2019
• Court: Supreme Court (Bermuda)

[2019] Bda LR 41

In The Supreme Court of Bermuda

Commercial Jurisdiction 2018 No 18

Between:

Wong Wen-Young (aka Winston Wong)

Wong Ray-Tseng (aka Riley Wong) (an infant by his next friend, Grace Tsu Hang Wong)

Plaintiffs

and

Grand View Private Trust Company Limited

Defendant

Ms E Talbot Rice QC, Mr D Hagen QC, Mr R Attride-Stirling and Mrs C Thompson for the Plaintiffs

Mr J Adkin QC, Mr A Mohamedbhai, Mr S Pearman and Mr J O'Mahoney for the Defendant

The following cases were referred to in the judgment:

European Asian Bank AG v Punjab & Sind Bank (No 2) [1983] 1 WLR 642

Mehta v Viking River Cruises Ltd [2014] Bda LR 99

ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725

Jack v Minister of Public Works [2016] Bda LR 124

Vatcher v Paull [1915] AC 372

Duke of Portland v Lady Topham (1864) 11 HLC 32

Re a Trust (Governing Law) [2017] Bda LR 53

Pitt v Holt [2013] 2 AC 108

Dyer v Trustees, Executors and Agency Co Ltd [1935] VLR 273

In re Ball's Settlement Trusts [1968] 1 WLR 899

Re Courage Group's Pension Schemes v Imperial Brewing & Leisure Ltd [1987] 1 WLR 495

Re McCullagh's Will Settlement [2018] NI Ch 15

Duke of Somerset v Fitzgerald [2019] EWHC 726

Bank of New Zealand v Board of Management of the Bank of New Zealand Provident Association [2003] UKPC 38

Hole v Garnsey [1930] AC 472

Wyndham v Egremont [2009] EWHC 2076

Roome v Edwards [1982] AC 279

Re Shiu Pak Nin and HSBC International Trustee Ltd [2014] (1) CILR 173

HSBC International Trustee Limited v Poon Lok To Otto [2014] JRC 254A

Re Z Trust [1997] CILR 248

Re Sigma Finance Corp [2010] 1 All ER 571

Tasaruff Mevduati SIgorta Fonu v Merrill Lynch Bank and Trust Co (Cayman) Ltd [2011] UKPC 17

Re Sigma [2010] 1 All ER 571

Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98

Lemos v Coutts (Cayman) Ltd (2006) 9 ITELR 616

Armitage v Nurse [1998] Ch 241

Johns v Johns [2004] NZCA 42

Summary judgment — Joinder with main action — Discretionary trust — Removal of family beneficiaries — Appointment of trustee as sole beneficiary — Appointment out of entire trust fund to new purpose trust — Scope of powers of trustee — Change in underlying character of trust — Future interest in trust assets — Limitation — Impact of remoteness of vesting clause — Requirements for executing deeds

JUDGMENT of Kawaley AJ

Introductory

1. The present action was commenced by a Specially Indorsed Writ of Summons filed on February 2, 2018. This Writ was amended by Order dated January 10, 2019. The 1^st Plaintiff, Dr Wong, is the eldest son of the later Mr Wang Yung Ching (“YC Wang”), one of the founders of the Formosa Plastics Group of companies (“FPG”), who died in 2008. The 2^nd Plaintiff is the grandson of Dr Wong and great-grandson of Mr. YC Wang. The Defendant is the trustee of the Wang Family Trust which was established on May 10, 2001.

2. The present proceedings are closely connected to the 1^st Plaintiff's claims against the Defendant and other private trust companies in which the validity of certain purpose trusts and the transfers of assets into the trust are challenged (2018: No.44, the “Main Action”). The moniker ‘Main Action’ is appropriate because the present proceedings are believed to concern assets worth less than 5% of the value of the total assets in dispute in the Main Action. Nonetheless, the amount in dispute here is by most standards very substantial indeed, a consideration which cannot be ignored in case management terms.

3. The claims raised in the present action are nevertheless distinct claims in relation to a distinct trust, the Global Resource Trust No. 1 also settled on May 10, 2001 (“GRT”), by a Declaration made by its trustee, the Global Resource Private Trust Company (the “Trustee”), which was incorporated on May 8, 2001. The discretionary beneficiaries and ultimate default beneficiaries of the GRT were the children and remoter issue of Mr YC Wang and his brother Mr YT Yang (together, the “Founders”). The assets of the GRT were shares in Grid Investors Corp (“Grid”), which itself held FPG shares. The Defence admits that on September 26, 2005, the Board of the Trustee executed an irrevocable deed:

• i. adding the Defendant as a beneficiary of the GRT;

• ii. removing all other discretionary and default beneficiaries;

• iii. declaring that the Trustee would take steps to appoint all the assets of the GRT to the Defendant as trustee of the Wang Family Trust;

• iv. declaring that the GRT would thereafter be terminated.

4. The Plaintiffs challenge the legality of these transactions and seek a declaration that the Defendant holds the relevant assets on trust for the GRT, together with other consequential relief (principally the appointment of a new trustee as the Trustee has been dissolved). By a Summons dated December 3, 2018, they seek, inter alia, summary judgment under Order 14 of the Rules of the Supreme Court 1985 (“RSC”). The principal assertion is that the replacement of individual discretionary and default beneficiaries with trust purposes combined with the resettlement of the trust assets for the benefit of a perpetual purpose trust were transactions beyond the scope of the relevant discretionary powers. The Defendant filed a Summons on or about April 12, 2019 seeking trial directions “including a direction that the trial of this action be heard at the same time as the trial of Action 2018: No. 44”.

5. The background to the present dispute and that in the Main Action shares common ground with other family trust disputes only at a superficial level. The Plaintiffs, Dr Wong and Riley Wong, are descendants of one mother and the Defendant is a company whose board of directors includes the children of another mother. However, atypically, the family members who are directors of the Defendant in this action and of the corporate Defendants in the Main Action while seeking to retain control of the lion's share of the assets settled on various purpose trusts are not doing so for their private benefit. Rather, they tacitly claim the moral high ground because the purpose trusts were apparently established in furtherance of the Founders' ethically evocative “Vision”, which essentially posits that persons who acquire wealth do not ‘own’ it but instead owe a duty to return it to society. By this measure if the parties were weighed in the scales of moral justice, it would be the Plaintiffs who would be found wanting, the Defendant's oral submissions implied. Mr Adkin QC appeared to me to brandish the Founder's Vision like a glittering forensic talisman, inviting the Court to view Mrs Talbot Rice QC's pleas for equitable justice to be done as lacking the lustre which one typically associates with such claims.

6. I caution myself against being swayed by such considerations. It is entirely plausible that the 1^st Plaintiff is motivated by concerns such as inclusion and/or status or other non-material concerns. There are many civil law cases the factual matrices of which have a strong moral overlay (e.g. cases pitting weak against strong, poor versus rich and victim versus fraudster). Such cases often entitle the Court to have regard to considerations of what are often referred to as commercial morality. The present case, at this stage at least, does not in my judgment fall into such a category. There is no suggestion of anything but a level playing field between the opposing parties. It is common ground that the contending family members have no pressing financial needs. The Plaintiffs do not allege bad faith. The Defendant does not allege that the Plaintiffs' claims should be refused on the grounds of inequitable conduct on their part. The only formal relevance of the Founders' Vision to the present proceedings is that the Defendant contends that it forms an important plank in the entire rationale behind the establishment of the various purpose trusts, including the Wang Family Trust, and the Trustee's decision to wind-up the GRT in 2005.

7. The main issues raised by the applications presently before the Court may be summarised as follows:

• (a) what principles govern the exercise of the Court's discretion to grant summary judgment or decide issues summarily under RSC Order 14?

• (b) what issues suitable for summary determination (if any) have the Plaintiffs raised?

• (c) if (b) is answered affirmatively, how should the issues be determined;

• (d) if there are any triable issues, should they be tried together with the Main Action?

8. However before considering the key issues, it is necessary to place them in the context of the pleadings and the evidence filed in relation to the relevant applications.

Principles governing summary judgement applications

9. The governing principles on granting summary judgment applications were not subject to any discernible controversy. How the principles should be applied was the central issue in dispute. The primary source of the relevant provisions is RSC Order 14, which pertinently provides as follows:

“1 (1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.

2 (1) An application under rule 1 must be made by summons supported by an affidavit verifying the facts on which the claim, or the part of a claim, to which the application relates is based and stating that in the deponent's belief there is no defence to that claim or part, as the case may be, or no defence except as to the amount of any damages claimed …

3 (1) Unless on the hearing of an application under rule 1 either the Court dismisses the application or the...