Isle of Man: Privacy In Trustee Applications In The Isle Of Man

Last Updated: 29 April 2014
Article by Kevin O'Loughlin

The Isle of Man High Court has confirmed that it will in appropriate cases make orders protecting the privacy of settlors, beneficiaries and trust affairs in relation to trustee applications to court.

An important procedure for trustees and beneficiaries is the ability to apply to court to determine questions of doubt, or to approve important decisions, which arise in the administration of a trust. The potential for publicity arising from the fundamental principle of open justice is, however, a disadvantage of such an application, in particular where the trust is family related rather than in a commercial context. Often there will be acceptable alternatives to an application to court, however the risk of publicity can discourage such applications leading in some cases to sub-optimal decisions. A recent important Isle of Man decision in the case of the Delphi Trust has clarified how the Isle of Man courts will balance principles relating to open justice and privacy in relation to such applications and confirmed that the court will where appropriate make orders protecting privacy.

In this case the trustee applied to the court for assistance under the court's inherent jurisdiction and/or section 61 Trustee Act 1961 (which section allows a trustee to apply to court for directions on questions concerning the management and administration of a trust). The trustee sought a declaration as to the validity of the trust, the class of beneficiaries, and the validity of certain transfers of assets to the trustee. The trustee further sought an order that the proceedings be held in private and judgments etc. anonymised as a major charitable beneficiary had expressed concerns that the publicity associated with the matter might have adverse consequences for the charity (e.g. that donations could drop).

The court referred to the well-known Public Trustee v Cooper1 categorisation of proceedings involving trustees, being (1) where the issue is whether a proposed action is within the trustees' powers (2) where a proposed course of action is within the trustees' powers but is a particularly momentous decision which the trustees consider it prudent to have approved by the court (3) where the trustees apply to court for a surrender of discretion and (4) hostile proceedings such as for breach of trust.

The court noted that the Isle of Man courts have come down firmly in favour of the fundamental principle of open justice, which the court noted is also a fundamental principle in other jurisdictions, for example the United Kingdom, Jersey and Guernsey. The European Convention on Human Rights, which the Isle of Man has enacted in the Human Rights Act 2001, provides that "in the determination of his civil rights and obligations ..., everyone is entitled to a fair and public hearing ..." On the other hand the ECHR provides that everyone "has the right to respect for his private and family life, his home and his correspondence". The court noted that it has jurisdiction to and does frequently make anonymity and privacy orders in for example, family and mental health cases. It is a question of the balance to be struck between the two principles.

The court discussed the meaning and implications of a case being heard in chambers as against in open court and noted that the use of the expression "in chambers" can lead to confusion as to whether the court is sitting in public or in private. A hearing in chambers is private in the sense that traditionally it meant a hearing in the judges room, which therefore the public could not attend without permission from the judge, but in general a judgment given in chambers is normally a public document. The court agreed with the Jersey Royal Court's view in Jersey Evening Post Limited v Al Thani2that the important distinction to be drawn is between cases heard in open court and cases heard in private and it would be best if the expressions "in chambers" and "in camera" were dropped.

The trustee in support of its case for privacy relied on Re Trusts of X Charity v Attorney General3. It had been held in that case that the court was entitled to pronounce its judgment in private in the context of an application by the trustees of a charity for directions in relation to certain pending proceedings. In relation to article 6(1) ECHR the English court in that case said that an application to the court by trustees for directions may well affect but does not normally determine the civil rights of anyone; it is designed to provide guidance to the fiduciary as to the proper exercise of his powers and only rarely could it be said to determine the rights of anyone. The Isle of Man court however was not persuaded by this authority and referred to Guardian Limited v Bermuda Trust Company Limited4in which the Supreme Court of Bermuda considered it artificial to characterise an application for directions designed in substance to confirm a beneficiary's entitlement to participate in trust assets as anything other than a proceeding for the determination of civil rights and obligations.

The Isle of Man court referred to the wide ranging relief sought by the trustee. Indeed given that the relief sought included a declaration as to the validity of the trust it is difficult to see that it did not involve the determination of rights within article 6(1) ECHR. The court decided that the interests of justice would be best served by the matter being heard in open court but with no references being made to the identity of the settlor, the trust, the beneficiary, the size of the fund or the amounts of the proposed distributions.

The court provided guidance as to how future trust applications to court should be dealt with. The court said that it is unwise to be too dogmatic as to when the court should sit in public and when it should sit in private to hear applications by trustees for directions. Normally the court would sit in private for cases within (2) and (3) of the Public Trustee v Cooper categories, for example to hear a Beddoe proceeding, or an application for surrender of discretion. However applications for rectification or construction of a trust deed, hostile actions to remove trustees and related applications for disclosure orders, and hostile proceedings for breach of trust etc., being within (1) and (4) of the of the Public Trustee v Cooper categories, would normally be heard in open court.

The court confirmed, however, that where a case is heard in open court the court has jurisdiction to make orders protecting the anonymity of the beneficiaries, the settlor, the trust and if necessary the amounts involved and any other confidential information where there is a reasonable expectation of privacy which requires protection and which overrides the fundamental principle of open justice. The court further confirmed that it accords great importance to the Isle of Man's vibrant trust industry and the need to respect the confidentiality of private trusts and the privacy concerns of settlors and beneficiaries in non-contentious matters and that such concerns can be dealt with by measures that are not as extreme as sitting in private where that is not necessary.

Trustees and beneficiaries can therefore be confident of the Isle of Man court's sensitivity to confidentiality of private information in future non-contentious applications to court relating to trusts.

Footnotes

1 Unreported December 20 1999.

2 2002 JLR 542.

3 [2003] EWHC 1462 (Ch).

4 Supreme Court of Bermuda judgment December 1 2009.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.