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C v D

Supreme Court of Bermuda, 3-4 December 2012

Court: Overseas
Frank Hinks QC, Paul Adams

Certain beneficiaries of a civil law Foundation and a Bermuda trust purportedly settled by the Foundation brought proceedings in two jurisdictions seeking declarations that the Foundation and the trust were invalid ab initio.  In the Bermuda proceedings the claimant beneficiaries also made a number of alternative claims, including breach of trust claims, claims for declarations as to the fiduciary nature of certain powers, a claim for the removal of the trustees from office and a claim seeking to force a reorganisation of the structure.  The Foundation was joined as a party to the Bermuda proceedings but sought a stay of those proceedings and, in the alternative, disputed jurisdiction.  Before the Foundation's application came to be heard, a settlement was reached between the various beneficiaries.  An application was then made to the Supreme Court of Bermuda for approval of the settlement and such approval was granted.  Frank Hinks QC and Paul Adams acted for the claimant beneficiaries.

This case was unusual in that the structure which the claimants were seeking to have declared invalid had been in existence for a great many years. It also raised interesting issues as to the interplay between civil and common law. Then, once a settlement had been reached, the parties had to grapple with difficult issues as to (i) how the settlement could be approved notwithstanding that there were persons who might have been interested in the assets if the structure was invalid who had not signed up to the settlement, and (ii) how the settlement as approved by the court could be made fully binding on the Foundation notwithstanding that the Foundation was not willing to enter an appearance in Bermuda.

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