The Chief Justice has recently provided helpful guidance to
practitioners seeking confidentiality orders in section 47
applications by handing down an ex tempore ruling in In the Matter of the BCD Trust,
supporting the anonymisation and corresponding orders required to
ensure that such applications are: "dealt with as private
applications, where there is no obvious public interest in knowing
about an internal trust administration matter."
Section 47 of the Bermudian Trustee Act 1975 allows for the
restructure of trusts in circumstances where the requisite power to
implement the variation is absent from the trust instrument. It
gives the Court jurisdiction to authorise transactions which it
deems expedient for the trust.
This provision, at present only found in Bermuda and no other
jurisdiction, allows the Court to exercise its discretion in
sanctioning the variation of administrative powers of the trust
which may impact beneficial interests. The beneficiaries'
consent to the variation is not required.
Reliance can be placed on section 47 to inter alia:
Vary the beneficial interests of the
Extend the perpetuity period of the
Ratify decisions made by (de-facto)
trustees when their appointment or retirement is defective;
Vary investment powers;
Add powers to appoint trustees;
Modernise provisions deemed expedient
for the trust, e.g. trustee charging powers.
The applications often relate to trusts of substantial value
with ultra high net worth beneficiaries who are not necessarily in
the public eye. It is desirable for such applications to be kept
confidential to assist maintaining the privacy and safety of the
beneficiaries, particularly minors. This is because should the
extent of wealth and other facts relevant to the trust structure be
made publicly available, there is a real risk that certain
beneficiaries may be negatively targeted and attacked, for example
kidnapping and ransom.
Additionally, certain trust structures hold assets, or their
beneficiaries are, related to well known companies. Therefore,
there is a potential risk that such companies could be adversely
impacted should they become publicly linked to court proceedings
regardless of the fact that generally section 47 applications tend
to be non-contentious.
It has been the regular practice of the Bermuda Court, where the
facts have justified it, for section 47 proceedings to be
anonymised, the related files sealed, and the hearings heard in
camera. However, there is no automatic entitlement to these
arrangements which are designed to keep the matters
Section 6(10) of the Bermuda Constitution expressly permits
Court proceedings to be held in private where it is deemed
necessary or expedient for the protection of the private lives of
persons concerned in the proceedings. In every case there are
competing public and private interests and it is for the Court to
determine the correct balance between those competing interests.
The recent decision of In the Matter of the BCD Trust will
therefore bring much needed comfort, for those trustees and
beneficiaries who were previously concerned about participating in
section 47 proceedings.
This view has recently been reinforced by the Chief Justice in
an unreported s.47 application hearing held subsequent to the BCD
ruling. When granting the confidentiality orders sought, the Chief
Justice emphasised that in addition to the usual concerns about
privacy and safety of beneficiaries, applications such as this
basically concern internal trust administration rather than
contentious litigation and as such there is no need for these types
of applications to be public.
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.
Confidentiality of corporate documents and information is one of
the key attractions of incorporating a company in the BVI. A
company search of the BVI Registrar of Corporate Affairs will only
disclose certain information and documents.
The primary sources of regulation of M&A in the British Virgin Islands are the Business Companies Act, 2004 (the "Companies Act") and common law.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
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).