Cayman Islands: Justice On Display

Last Updated: 24 January 2017
Article by Morven McMillan and Maxine Bodden

Not that long ago, personal records were written by pen or typewriter. Copying them required more handwriting, carbon paper or a time consuming and occasionally messy process involving a machine called a spirit duplicator.

For third parties, obtaining copies of personal documentation would not have been straightforward. And, over time, the documentation would often be destroyed, misplaced or thrown away.

How times have changed. Technological developments, national security concerns, political pressures, changing business practices and generational factors have combined to create a wealth of accessible personal information, and, at the same time, to gradually erode traditional notions of privacy and confidentiality. Legislation is being passed in a bid to keep up with technological advances and our response to them – e.g. to force social media sites to allow children to erase online records so that their indiscretions do not come back to haunt them as adults.1

There is now widespread acceptance that respect for personal privacy must be balanced with notions of public justice; the necessities of the war against international terrorism and crime; a developing belief in the 'right' to access information on the web; press freedom; freedom of information; and the drive to increase nations' domestic revenue base by tracking down tax evaders. Transparency has become key to compliance with international legal and regulatory standards.

This is a developing area of the law that has profound implications for private clients and those who advise them. Our personal information has never been so accessible by so many. Clients, not surprisingly, can have numerous concerns, one of which is: if the family's trustee has to go to court, how public will those proceedings be?

Open justice

While duties of fidelity and confidentiality have long been central to the relationship between trustees and benefi ciaries, the starting point in any civil, criminal or public law proceedings in the Cayman Islands is open justice. The principle is enshrined in the Bill of Rights, Freedoms and Responsibilities, s7(1) providing that everyone has the right to a fair and public hearing in the determination of their legal rights and obligations. As is widely acknowledged, open justice helps to maintain public confidence in the administration of justice – not only is justice done, but it is seen to be done.

Case law in the Cayman Islands reflects this fundamental principle. As the Honourable Chief Justice Anthony Smellie QC found in AHAB v Saad Investments Co Ltd and Others,2 citing Lord Haldane in Scott v Scott:3 'In public trial is to be found... the best security for the pure, impartial, and e. cient administration of justice, the best means for winning for it public confidence and respect.'

In the Cayman Islands, this approach requires a copy of every writ, originating summons or petition issued at court to be published in a register that is open to public inspection on payment of a fee. Copies of every final judgment handed down are also available to the public on payment of a fee. Even non-parties can obtain an order from the court permitting them to access documents on the court fi le if they are able to demonstrate sufficient interest in the proceedings. Quoting then-Vice Chancellor Sir Donald Nicholls in Dobson v Hastings,4 the Chief Justice, again in AHAB, held:

'... for reasons of the proper administration of justice, only certain aspects of a case fi le are routinely made publicly available... all aspects may be made available to any person who applies, including non-parties, if the interests of justice or some other public interest (such as investigative journalism) properly so require.'

A breach-of-trust trial, for example, would ordinarily be open to the public. However, trustees are also entitled to apply to court under s48 of the Cayman Islands Trusts Law (2011 Revision) for advice and directions on any question relating to the administration of trusts. As the Chief Justice put it in A v RTCL:5 'It is a jurisdiction to which resort has been taken in a number of different circumstances and, while its boundaries have never been defined by the court, it has, from the decided cases, clearly come to be regarded as a remedial jurisdiction, for orders to be made as the justice of the case deserves.'

Such applications, while not necessarily contentious, can nevertheless involve discussion of highly sensitive matters: i) the strengths and weaknesses of a trustee's claim or defence, in Beddoe applications;6 ii) issues of commercial sensitivity that, if they become public, might prejudice the value of the trust assets and, thus, the interests of the beneficiaries; iii) questions of personal security and fear of kidnap; iv) wealth of which minor beneficiaries may not yet be aware; v) issues of mental and physical incapacity, requiring reference to confidential medical reports; and vi) highly personal grievances or sensitivities that the family would prefer to be heard behind closed doors.

This is not, however, a question of the court allowing a family to hide its difficult history behind the protection of a private hearing or anonymity orders. As Mr Justice Morgan in V v T and A explained,7 the authorities clearly establish that 'the fact that a hearing in open court may be painful, humiliating and a deterrent either to a party or to a witness is not normally a proper basis for departing from the open justice principle'.

As a result, the court will require cogent and persuasive evidence in support of confidentiality orders before derogating from the fundamental principle of open justice.8 A pragmatic approach will nonetheless be taken and, in appropriate circumstances, the court will be prepared to make orders preserving the confidentiality of the proceedings, most commonly by restricting access to the court fi le or ordering the preservation of the anonymity of the parties by referring to them by random letters of the alphabet. The Cayman Islands court has not, however, followed the practice of other o. shore jurisdictions in routinely anonymising the identity of the applicant trustees, as well as the respondent parties, when granting confidentiality orders in applications for directions.

A case in point

In Barclays Private Bank & Trust (Cayman) Ltd v C, K and the Attorney General,9 the trustee applied under Public Trustee v Cooper10 principles for the blessing by the court of a significant distribution, some USD750 million, from the trust fund to charity. The application was supported by two of the three adult beneficiaries and not opposed by the third; he was also the representative of the minors and unborn beneficiaries.

The Chief Justice agreed in that case to make anonymity orders. Had the identity of the family and the charity concerned been made public, it would not only have revealed the magnitude of the family's wealth, but risked bringing unwanted attention on the family, raising justifiable concerns about personal security and kidnapping. It also gave rise to concerns that the minor beneficiaries could be adversely influenced by knowledge of the extent of their family's wealth, in turn affecting the development of their personal values and attracting undesirable friends who might seek to take advantage of them.11

The trustee was, therefore, ordered to fi le two different versions of the application – one using random letters of the alphabet to represent the family names, which would be kept on the publicly accessible register of writs and originating process, and another with the family identified, which was to be kept sealed on the court fi le. It was also ordered that the court file should not be unsealed without an order of the court, and only on prior notice of any such application to the trustee. A written judgment on the substantive application was published but again used letters of the alphabet to disguise the identity of family members.

Open discussion

As advisors with clients who may be involved in an application for trustee directions, we must be prepared to have frank discussions with our clients about their concerns, their expectations of privacy and what they are trying to protect from public scrutiny and why, even if that discussion necessarily involves sensitive topics. The court in the Cayman Islands will primarily be concerned to do justice to the parties in an open forum, and will not be persuaded otherwise unless clients are prepared to be similarly frank with the court about their concerns and the basis for them.

Footnotes

1. For example, the so-called 'eraser button' law in California in 2013

2. [2011] (1) CILR 196

3. [1913] AC 417

4. [1992] Ch 394

5. [2004.2005] CILR 485

6. Re Beddoe [1893] 1 Ch 547

7. [2014] EWHC 3432 (Ch)

8. Grand Court Rules Practice Direction

No.3/97

9. [2014] (1) CILR 144

10. [2001] WTLR 901

11. More particularly described by the Chief Justice in a conference

paper: Con_identiality of trust proceedings in court: should they be open or private proceedings? (April 2015)

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.

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Morven McMillan
 
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