Rtl v Ald et Al

JurisdictionBahamas
JudgeWinder, J.
Judgment Date13 May 2015
CourtSupreme Court (Bahamas)
Docket Number2013/CLE/gen/2064
Date13 May 2015

Supreme Court

Winder, J.

2013/CLE/gen/2064

RTL
and
ALD et al
Appearances:

Philip Dunkley QC with N. Leroy Smith and Cameron Cartwright for the plaintiffs

Thomas Evans QC with Veronique Evans for the 1st and 2nd defendants

Brian Simms QC with C.R. Matthew Paton for the 3rd and 4th defendants

John Wilson with Nicole Southerland-King for the 6th defendant

Trusts and Trustees - Trustee — Powers of trustee — Anti — suit injunction to restrain contingent beneficiaries under several trusts from continuing and/or commencing proceedings — Jurisdiction — Whether there was power under the Rules of the Supreme Court to serve Originating Summons out of the jurisdiction — Bahamas was the natural forum for the proceedings — Finding that there would be no injustice to respondents — Bahamian courts had personal jurisdiction over the respondents — Anti — suit injunction granted.

Winder, J.

These are co-joined applications for an anti-suit injunction by the plaintiff trustee and the Sixth defendant seeking to restrain the 3rd and 4th defendants, as contingent beneficiaries under several trusts, from continuing and or commencing further proceedings in the State of Florida.

BACKGROUND
1

I have adopted the factual matrix contained in the plaintiff's submissions with modifications to incorporate the opposite view of the 3rd and 4th defendants where necessary.

2

The plaintiff is (i) a trust company incorporated under the laws of The Bahamas; (ii) a licensee under the Banks & Trust Companies Regulation Act (iii) ‘resident’ in and carries on business in The Bahamas, exclusively.

3

The plaintiff is and has been since 1993, the trustee of various trusts which were established under the laws of The Bahamas for the benefit of certain members of the first through fourth defendants' family. These trusts include:

  • (a) The “Butterfly Trust” which was (i) established pursuant to a Trust Agreement dated 7th January, 1993 (the “Butterfly Trust Agreement”) made as between LAG, as Grantor and POTC, (now the plaintiff) as Trustee (ii) amended by a First Amendment to the Butterfly Trust dated 12th February, 1993 and (iii) eventually divided into four (4) separate trusts; and

  • (b) The “Santiago II Trust”, the “Naranjal II Trust”, the “Miramar II Trust” and the “Caimito II Trust” (together, the “Other Bahamian Trusts”) which were each established pursuant to separate Trust Agreements dated 21st June, 2007 made as between LAG, as Grantor and POTC, (now the plaintiff) as Trustee.

4

These Bahamian Trusts are all discretionary trusts.

5

The Santiago II Trust and the Miramar II Trust were established for the principal benefit of JA D and JO D and contemplate that they will not receive distributions thereunder until they have attained twenty-five (25) years of age.

6

The Sixth defendant is a professional financial advisor who serves as Protector of the Relevant Bahamian Trusts. He was appointed Protector of the Santiago II Trust, the Miramar II Trust, the Naranjal II Trust, and the Caimito II Trust in July, 2008 and continues to hold that office.

7

The plaintiff, in accordance with the terms of the Butterfly served as the settlor for four “spinoff trusts,” the Senna Trust, the Montjuic Trust, the Segura Trust and the Montblanc Trust (collectively the “Spinoff Trusts”). All of these trusts were settled on 30th July, 2008 and executed in Florida.

8

The Senna Trust and the Montjuic Trust were designed to distribute the proceeds from the Butterfly Trust to the Minor Beneficiaries JO D (and his descendants) and JA D (and his descendants) respectively. The plaintiff settled the Butterfly Spinoff Trusts in Florida, and they provide for Florida law to govern over their validity and interpretation.

9

The plaintiff also created the Segura Trust and the Montblanc Trust to distribute the proceeds of the Bahamian Trusts to the Minor Beneficiaries. The Segura and Montblanc Trust Agreements are near identical to the Senna and Montjuic Trusts.

10

The Sixth defendant, a Florida resident was the founding trustee and protector of the Spinoff Trusts. The First defendant has replaced the Sixth defendant as Trustee of the Spinoff Trusts.

11

The plaintiff's position is that the Spinoff Trusts are actual US Trust, notwithstanding the Butterfly and the other Bahamian trusts have settled and funded them.

12

The Butterfly Trust and the Other Bahamian Trusts (together, the “Relevant Bahamian Trusts”) are each expressed to be governed by the laws of The Bahamas.

13

The administration of each of the Relevant Bahamian Trusts is and has been from the respective trusts' inception carried on in and from The Bahamas. The third and fourth defendants assert that some administrative functions took place in Florida. The administration of the US Spinoff trusts has been carried on in the State of Florida.

14

The principal assets of the Relevant Bahamian Trusts comprise holding companies (i) incorporated under the laws of The Bahamas and (ii) which hold, inter alia, shares in some significant corporate entities as well as assets and investments, which are managed in and from The Bahamas by POCL.

15

The First defendant, ALD, the Second defendant, CD, the Third defendant, JO D and the Fourth defendant, JA D are each respectively, the primary discretionary beneficiary under four (4) Separate Butterfly Trusts.

16

JA D and JO D (the respondents) are also named as discretionary beneficiaries under the Other Bahamian Trusts. JO D and JA D (“the Minor Beneficiaries”) are the minor children of the fifth defendant and the late SD (viz. a nephew of LAG) who were married in 1992 but subsequently divorced in 1997/1998. SD died in a plane crash in 2005.

17

The Fifth defendant is the sole living parent and guardian of the respondent, with whom they both reside at General Arrando No. 13, 28010 Madrid, Spain. As the natural and legal guardian of the Minor Beneficiaries, she has full power to exercise all legal rights and powers pertaining to their property interests both in the United States and abroad. On 3 May 2006, the Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, appointed the fifth defendant as plenary guardian of the Minor Beneficiaries' property.

THE DISPUTE
18

Beginning in or about 2006, BG began making demands of the plaintiff for information and complaints with respect to certain aspects of the Butterfly Trust's administration. The issues raised included: (1) BG's access to trust documents and other information (2) whether The plaintiff was obliged to establish a Management Committee (3) complaints as to the investment strategy adopted by The plaintiff in the administration of the trusts and (4) whether The plaintiff could engage its affiliates in the administration of the trusts.

19

On 24th December, 2013 the plaintiff commenced this action by an Originating Summons. On 11th July, 2014 the plaintiff lodged an Amended Originating Summons, which was amended pursuant to Order 20 rule 1 of the Rules of the Supreme Court (“RSC”).

20

On 17th July, 2014 the plaintiff applied for and obtained the leave of the Registrar to serve the Amended Originating Summons out of the jurisdiction at the Spanish address of the fifth defendant.

21

On or about 24th July, 2014, two copies of the Amended Originating Summons were delivered by a Spanish Notary acting as local agent for counsel for the plaintiffs at the apartment building at which the third and fourth defendants reside with their mother, the fifth defendant. The documents were given to the building's doorman/concierge, Mr. Angel Calvo who undertook to give the said documents to the fifth defendant.

22

On 8th August, 2014, the third and fourth defendants, with leave obtained from the Registrar on 7th August, 2014, entered a conditional appearance to the action.

23

On August 21st, 2014 the third and fourth defendants filed a Summons seeking an Order that the service of the Amended Originating Summons on the third and fourth defendants be set aside on the grounds that:

  • (a) Service of the Amended Originating Summons on the Third and Fourth Intended defendants was irregular in that [BG], in her capacity as mother, natural guardian, and Court appointed plenary guardian of the property of the Third and fourth Intended defendants, was never properly served with the documents in accordance with the Procedural Rules of Spain and/or the Hague Service Convention for effective service of an originating motion;

  • (b) No leave was sought by the plaintiffs or granted to the plaintiffs to issue a Notice of Originating Summons for service out of the jurisdiction in accordance with Order 6 Rule of the Rules;

  • (c) The Intended Third and Fourth defendants were served with an Amended Originating Summons not intended for service outside of the jurisdiction and where the time for entry for appearance was only fourteen days which is not in accordance with the provisions of the Rules for time to enter an appearance, given that such time is customarily 28 days where service is to be out of the jurisdiction; and,

  • (d) The Second Affidavit of Sandra Lightbourn made in support of the application for leave to serve outside of the Jurisdiction discloses no good and arguable case on the merits as is required under Order 11 rule 4(2) of the Rules when seeking leave to serve out of the jurisdiction.

24

In response to the application the plaintiff applied by Summons on 14th August, 2014 for an order, inter alia, deeming the service upon the fifth defendant to be valid. The relevant portion of the plaintiffs Summons sought as follows:

“An Order pursuant to Order 70 rule 12 of the Rules of the Supreme Court 1978 deeming the Amended Originating Summons filed herein on 16th July, 2014 to have been validly served upon [JO G] and [JA G] c/o [BG]”

25

In an oral ruling delivered on 27th August, 2014 I held that there was no requirement to...

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