Serious failings by Trustee amount to a breach of trust: Charles Russell Speechlys advises the Hon. Mrs Dawson-Damer in appeal of long-running trust dispute

Charles Russell Speechlys, together with Counsel, Richard Wilson KC, Christopher McCall KC, Andrew Holden, Sparsh Garg and John Minns (of the Bahamian bar) are proud to have represented the Hon. Ashley Dawson-Damer in her appeal to the Judicial Committee of the Privy Council (JCPC).

For over 10 years and in proceedings spanning three jurisdictions, the Hon. Mrs Dawson-Damer has been fighting for the right to be properly considered as a discretionary beneficiary of a Bahamian trust known as ‘Glenfinnan’.

In 2006 and 2009, the trustee of Glenfinnan, Grampian Trust Company Ltd (Grampian) had appointed out 98% of Glenfinnan ($402 million) onto new trusts of which Mrs Dawson-Damer is not a beneficiary. Mrs Dawson-Damer was neither notified nor consulted in relation to this decision, nor was information sought from her by Grampian in relation to its decision.

The trial judge, the Honourable Chief Justice Winder, found following the trial that Grampian had given a “very cursory/curt assessment of Ashley’s circumstances and fell short of what a prudent and diligent trustee ought to have conducted. In particular Grampian failed to give any proper consideration of whether provision ought to be made for Ashley from Glenfinnan in the context of a resettlement of assets onto new discretionary trusts.”

The JCPC has recognised that Grampian’s conduct amounted to “sufficiently serious failings” to constitute a breach of Grampian’s fiduciary duty; indeed, during the course of the JCPC Hearing, Lord Leggatt described Grampian’s conduct as “about an inept as possible behaviour as you could conceive”. This element of the decision overturns the decision of both the Supreme Court and the Court of Appeal in The Bahamas. However, the JCPC declined to exercise its discretion to rescind the 2006 and 2009 appointments on the basis that the court was persuaded that the trust was dynastic in nature and intended for future beneficiaries.

Ziva Robertson, Partner, says:

The Privy Council's recognition of the trustee's breach of fiduciary duty is notable, highlighting the need for accountability and diligence in trust management. However, despite this acknowledgment, no remedy was provided, and the appointments out of Glenfinnan were not disturbed. The Court left open the question of whether the test for setting aside trustees’ erroneous decisions includes the question of whether a trustee acting properly “would” or “might” have acted differently, and appears to suggest that either approach would be correct in different factual circumstances. The decision further underscores the importance ascribed by the Courts to the intentions of the settlor, sometime at the expense of the legitimate expectations of the beneficiaries – and even when the trustee has been found to have acted in breach of fiduciary duty.

 The Charles Russell Speechlys team was led by Ziva Robertson (Partner), with support from Jennifer Ronz (Legal Director), Sarah Moore (Senior Associate) and Lydia Kember (Associate).

A link to the JCPC’s judgment can be found at Ashley Dawson-Damer (Appellant) v Grampian Trust Company Ltd and another (Respondents) (Bahamas) - JCPC