Ashley Dawson-Damer v Grampian Trust Company Ltd
| Jurisdiction | Bahamas |
| Judge | Winder, J |
| Judgment Date | 05 February 2021 |
| Court | Supreme Court (Bahamas) |
| Docket Number | 2015/CLE/gen/00341 |
In the Matter of the trusts of the Deed of Settlement dated 30 June 1992 and designated the Glenfinnan Settlement
And the trusts of the Deed of Settlement dated 23 March 2009 and designated the Moray Settlement
And the trusts of the Deeds of Settlement dated 20 December 2006 and designated the Emo Settlement, the Hewish Settlement and the Came Settlement
Hon. Mr. Justice Ian R. Winder
2015/CLE/gen/00341
IN THE SUPREME COURT
Common Law and Equity Division
Richard Wilson QC with John Minns ( Instructed by Graham Thompson) on behalf of the Plaintiff
Eason Rajah QC with Sean Moree and Vanessa Smith ( Instructed by McKinney Bancroft & Hughes) for the First Defendant
This is a claim by the plaintiff (Ashley) for breach of trust alleging that the defendant (Grampian) failed to consider her interest in the making of appointments from the Glenfinnan trust fund (Glenfinnan) in 2006 and 2009. Ashley is a beneficiary of Glenfinnan, a discretionary family settlement.
Glenfinnan's wealth derives principally from the estate of the late George Skelton Yuill (Yuill). Yuill had emigrated to the Far East at the end of the 19 th century and became an extremely successful businessman. Yuill died on 10 October 1917. By his will, dated 13 April 1917, Yuill established a will trust.
On 1 February 1907, Yuill's only daughter Winifreda Yuill, married Lionel Dawson-Damer, the 6 th Earl of Portarlington. They had one son, George Dawson-Damer, Viscount Carlow. Viscount Carlow married Edith ‘Peggy’ Cambie on 7 January 1937. They had two children — George, who was born 10 August 1938, and John, who was born 12 October 1940. Viscount Carlow died in active military service on 17 April 1944.
Settlements were made in 1951 and 1961 but thereafter the assets which originated from the Yuill will trust were resettled onto a new settlement in 1973. This new settlement (the 1973 Settlement) was established by a Declaration of Trust dated 29 May 1973 by Arndilly Company (Cayman) Limited (Arndilly).
The class of beneficiaries established under the 1973 Settlement included:
“the children and remoter issue of the late Viscount Carlow for the time being living and the respective wives husbands widows and widowers for the time being living of all or any children or remoter issue of the late Viscount Carlow”.
George, John, their spouses (including Ashley), and their children and remoter issue were therefore within the class of beneficiaries of the 1973 Settlement. The terms of the 1973 Settlement did not differentiate between the rights of George and John under the trust.
A feature of the family trust structure has always been the office of the trust or Family Adviser. This office was not specifically provided for in any of the trust's instruments but is said to exist to give advice and make proposals to the trustee in the exercise of their discretion towards beneficiaries. Their role, it is said, arose as a result of the fact that whilst the trustees operated from the Caribbean (Bahamas or Cayman) the beneficiaries resided in the United Kingdom and in Australia.
John married Ashley in 1982. At the time of the marriage Ashley had an adopted son, Piers. Piers was subsequently adopted by John and together they adopted their daughter, Adelicia.
As a result of Piers and Adelicia being adopted, an issue arose as to whether they were included in the class of beneficiaries of the 1973 Settlement. Advice from Bahamian and English counsel was taken by the trustee, Arndilly, on the issue and it was the opinion of all counsel consulted, that adopted children were not within the beneficial class of the 1973 Settlement. Whilst the advice of leading English counsel, Robert Walker QC, was that adopted children were not in the class of the 1973 Settlement, he nonetheless expressed a view that there was some doubt over the issue which could only finally be resolved by an application to the Bahamian Court. The advice was also that any doubt should not prevent the trustee from exercising its discretion under the terms of the 1973 Settlement in a manner that conferred a benefit on John, in a manner that also benefitted his adopted children. Ashley and Grampian differ as to whether this type of distribution, termed a Pilkington advance, was subject to any limits.
In or about 1989–1990 Arndilly determined that it would restructure the 1973 Settlement. That restructuring (the 1992 Restructuring), which was achieved over several years, was concluded in 1992. Whilst there is no challenge to the 1992 Restructuring in this action there is considerable dispute as to the true intent and purpose of the restructuring. The restructuring nonetheless achieved certain objectives as to tax planning and providing for John and Ashley's adopted children.
I accept Ashley's description that, at its core, the 1992 Restructuring involved the following steps 1:
Additionally, as part of the restructuring, and prior to the steps identified above, Arndilly in 1990 caused substantial funds to be transferred for the benefit of George and John to establish Australian trusts for their respective families.
-
(1) Arndilly, as trustee of the 1973 Settlement, would transfer trust assets absolutely to a corporate beneficiary, i.e. to a company that would receive the assets absolutely and beneficially.
-
(2) The corporate beneficiary would be restricted by the terms of its own constitution to making gifts or setting up trusts for the benefit of a class of persons comprising members of the Dawson-Damer family. Because the corporate beneficiary's freedom of action was restricted in this way, the trustee (Arndilly) was able to form the view that a transfer of the trust assets to the corporate beneficiary was for the benefit of the beneficiaries of the 1973 Settlement.
-
(3) Later, and entirely at the behest of its own board of directors, that corporate beneficiary might choose to deal with those assets, either by making gifts to, or settling new trusts for the benefit of, the persons specified in its own memorandum of association, but was under no obligation to do so.
Spey Ltd. (Spey), incorporated on 1 August 1991 as a Bahamian company, was the corporate beneficiary that received the assets of the 1973 Settlement absolutely and beneficially. The Memorandum of Association of Spey, at paragraph 4(1), provided:
“The objects for which the Company is established are (subject to the proviso to this sub-clause (1) and subject to sub-clause (2)) below to engage in any business or activity or act whatsoever not for the time being prohibited by the laws of The Bahamas including in particular the provision from time to time of benefits (whether by way of outright gift or gift in settlement or interest-free loan or otherwise howsoever) for all or any of the descendants (including at the discretion of the directors adopted and legitimated descendants) of George Lionel Seymour Dawson-Damer commonly called Viscount Carlow who died on 17 April 1944 and the spouses of his descendants (all such descendants and spouses being hereinafter called “the specified class”). Provided as follows:-
a. That the Company shall not make a gift or otherwise voluntarily dispose (otherwise than for full consideration) of any of its assets except (i) to or in favour or for the benefit of all or any of the specified class or (ii) in a way which is in furtherance of or incidental to some authorised business activity or act of the Company.
b. That the Company shall not in any event make a gift or otherwise voluntarily dispose (otherwise than for full consideration) of any of its assets if the result would be to reduce the net value of the Company's assets (after allowance for its debts and liabilities) below the aggregate par value of all its outstanding shares.
c. That the Company shall not act as a trustee or other fiduciary but shall hold all its assets as the absolute beneficial owner thereof”.
The Board of Directors of Spey were Geoffrey Johnstone, Reginald Lobosky and Roland Lowe. On 2 October 1991, Arndilly resolved to transfer all of its shares in A&OT Investments Ltd (A&OT) and to assign the whole of an outstanding debt from A&OT to Spey. A&OT was the investment company which held the family assets.
The Board of Spey met on 12–14 February 1992, in order to decide how to deal with Spey's assets. The meeting was attended by the directors of Spey, as well as (by invitation) Mr Michael Hamilton (Hamilton), Mr John Duff (Duff), and Mr Michael Stanford-Tuck (Stanford-Tuck). Hamilton and Duff were the Family Advisers (also referred to as Trust Advisers) under the 1973 Settlement. Stanford-Tuck was a solicitor who had acted for Arndilly. It is accepted that Stanford-Tuck had not been engaged to act for Spey.
According to paragraph 2 of the minutes of the 12–14 February 1992 board meeting of Spey:
It was agreed that the Company should transfer the beneficial ownership of all the Assets other than a cash sum of US$10,000 representing the intended amount of the paid-up Share Capital of the Company (“the Share Capital”) to a number of new settlements for the benefit of the persons mentioned in its Memorandum of Association and it was therefore resolved:-
(a) To arrange for the formation of a new trust company (“the New Trust Company”) in the Bahamas to be named (if possible) Grampian Trust Company Limited, [redacted].
(b) To establish four new settlements in The Bahamas, with the New Trust Company as Trustee and in the terms of the draft trust deeds produced to the meeting such settlements to be known as follows:-
(1) The 1992 Glenfinnan Settlement (for the benefit of the beneficiaries of a settlement established in 1973 with Arndilly as...
To continue reading
Request your trial