Schofield J
IN THE GRAND COURT OF THE CAYMAN ISLANDS
HOLDEN AT GEORGE TOWN, GRAND CAYMAN
BEFORE THE HON. MR. JUSTICE SCHOFIELD
BETWEEN: ROGER AUSTIN LEARMONT
PLAINTIFF
AND: INTEGRITAS TRUST MANAGEMENT (CAYMAN) LTD
DEFENDANT
Mr. Charles Quinn - for the Plaintiff
Mr. Angus Foster - for the Defendant
JUDGMENT
This settlement is expressed to be subject to the laws of the Cayman Islands. The Plaintiff/settlor seeks rectification of the deed of settlement to bring it within the Cayman Islands law as it relates to the rule against perpetuities. In these Islands we follow the Common Law rules whereas the deed was drawn up with the English rules and a Bermudian precedent in mind. This inadvertently produced a deed which offends the perpetuity rules in Cayman. The result is that the settlement deed does not give effect to the settlor's intentions because many of its clauses are void.
The Grand Court has jurisdiction in Equity to grant the remedy of rectification of a voluntary settlement (see James Jeremy Bond and others v. Integritas Trust Management and others CC 40, 58, 59, 66 and 67 of 1988). The remedy may be granted to give effect to the true intentions of the settlor and convincing proof is required of that intention (see Joscelyne v. Nissen [1970] 1 ALL E R 1213 as followed by this Court in Barry Stanley Briage v. Integritas Trust Management (Cayman) Ltd and others CC 252 of 1989).
In this case we have convincing evidence from the settlor who succinctly states that he intended to enter into a valid settlement not useless sheets of paper. The sheets of paper seem, in fact, not to be entirely useless because certain clauses in them appear to be valid, but the settlor probably means that they are useless for his purposes. I am convinced by the settlor's affidavit as supported by
those of his solicitors, Andrew Garth Pollard and Anthony George King, that the deed as presently drafted does not give effect to his true intentions and that the invalid clauses render the trust unworkable for his purposes.
Being convinced that the deed does not give effect to the settlor's intentions should I then exercise my discretion to order rectification? The remedy "must be cautiously watched and jealously exercised" (per Evershed M R in Whiteside v. Whiteside [1950] Ch. 65 at p. 71). I should not order rectification if there is a convenient alternative remedy available to him (see Berry Stanley Briggs v. Integritas (Supra)). The trust was set up legitimately to minimise the settlor's tax liabilities in the United Kingdom. There are two possible alternative avenues of approach with a view to achieving the settlor's intentions and I have heard evidence from Christopher Robert Bailey, an English solicitor specialising in this field of law, on those alternatives. He has satisfied me that both those alternative avenues are potentially costly and are fraught with difficulties and could well lead to the attraction of high tax penalties in the United Kingdom. It cannot be said in those circumstances that the alternative remedies are convenient. Furthermore, it may well be that the settlor's intentions are completely, or substantially at least, frustrated by pursuing those avenues.
In this case the trustees consent to the application. It is in the interests of all parties for the deed to be rectified. The case falls within the same framework of circumstances as the cases giving rise to Bond (Supra). In Bond the remedy was readily granted and I see no reason to withhold it in the present case.
I grant the orders as prayed in paragraphs (1) and (2) of the originating summons filed on 20th April, 1990.
D. Schofield
Judge
8th May, 1990