Fact. The defendant was sued because trustees originally located in Jersey and then in Liechtenstein and the BVI, in breach of trust had overpaid her as beneficiary under an express or a resulting trust. The claimants also sought to have the Court replace her with a new Appointor.
Analysis: The judge rightly held the trust was domiciled in England, the expressly chosen law being the system of law with which the trust had its closest and most real connection. However, he then surprisingly held the English court had no jurisdiction. The claim against the defendant for the overpayments in reality was a claim against her in her capacity as someone not entitled to those payments viz as a stranger, not as a beneficiary. The claim against her as holder of a fiduciary power was not a claim against her ‘as trustee’.
The official Schlosser Report and Article 23(4) should have led the court to apply a purposive construction to Article 5(6), so that it covers all proceedings relating to the internal workings of a trust, viz proceedings brought against a settlor or beneficiary or trustee or holder of a fiduciary power where relations between those persons or their rights or obligations under the trust are involved.
]]>Most offshore commentators have argued that this innovation was essential for the survival of the industry after the tax authorities in the US, UK and other commonwealth countries introduced changes effectively closing the doors on offshore trust. However, some onshore detractors criticise the offshore trust as a triumph of form over substance. From the Cayman Islands' perspective, the chorus of criticism, on close examination, will be found to be baseless. The central proposition of this article is that the trust, in the Cayman Islands, has been a triumph of form and substance; that the cutting edge legislative developments find a solid foundation in the jurisprudence of the Islands.
The article begins by reviewing some of the ways in which this onshore scepticism has recently manifested itself and then turns to exploring the case law, focusing in particular on decisions of the Cayman Islands courts, which reveal the doubters to be entirely misguided, with particular reference to the approach to disclosure of information, and the likely judicial approach to assessing the validity of the trust.
]]>That Citigroup had breached its fiduciary duty to Toll;
That Citigroup had failed to manage the conflict of interest adequately; and
That Citigroup had engaged in insider dealing.
Facts. Citigroup conducted both investment banking for clients and equity trading on its own behalf. Employees who work on the equity trading side of the business are known as ‘public side’ employees. Conversely, those employees who are exposed to sensitive information by virtue of working in areas such as the investment banking side of the business are known as ‘private side’ employees.
In January 2005, Toll Holdings Limited ("Toll") employed Citigroup's Investment Banking Division (on the company's private side), to advise them on a proposed A$4.6 billion takeover bid of Patrick Corporation Limited ("Patrick").
Analysis. This case confirms that firms may continue to rely on methods such as Chinese Walls, engagement letters and the acquisition of informed consent as means of managing conflicts of interest and modifying the relationship between the firm and its customers.
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