Supreme Court of Bermuda rectifies a trust deed to correct an obvious mistake …

In an ex tempore ruling published on 1 May 2017, in the case of Church Bay Trust Co Ltd v Attorney General [2017] SC Bda 34 Civ, Chief Justice Kawaley has exercised his equitable powers to rectify the wording of a trust deed on the grounds that the settlor must have made a mistake in limiting the trustee’s power to appoint additional beneficiaries to the temporal period while the settlor was still alive.

Now that the settlor had died, the trustee had taken it upon itself to draw the matter to the Court’s attention, with a view to correcting what it considered to be an obvious mistake on the part of the settlor (so that additional friends and family members could be added to the list of beneficiaries, if appropriate, post-mortem).

The Court appears to have been satisfied, on the basis of the evidence and the authorities, and, particularly, on the basis of a Letter of Wishes and various contemporaneous exchanges, that a mistake had indeed been made, and that it should be rectified.

The trust deed had been drafted in such a way that, absent any other surviving beneficiary, the remaining beneficiary would be ‘charity generally’, represented by the Attorney General.

But even the Attorney General appears to have decided that the evidence was sufficiently compelling that he would not oppose the application, but support it.

The judgment appears to be a straightforward application of the Court’s equitable jurisdiction to rectify for mistake, of which there are many examples and precedents in the English case law.

On one analysis, it is a positive development for Bermuda as a trusts jurisdiction that there is yet another locally reported trusts case to add to the jurisdiction’s trusts jurisprudence (even if the case was decided without the benefit of full, adversarial argument or detailed reasoning).

In an ideal world, mistakes would not happen: but it is quite reassuring to know that they can be readily corrected, when appropriate…

 

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