08 May 2019

Bermuda Court exercises inherent jurisdiction to appoint protectors

In the Matter of the H Trust [2019] SC (Bda) 27 Com (30 April 2019), the Supreme Court of Bermuda delivered an important judgment in which it exercised its inherent supervisory powers over trusts to appoint protectors.

In its decision, the Court also reaffirmed the wide breadth of the Court’s jurisdiction under Section 47 of the Trustee Act 1975 (“Section 47”) to grant powers to trustees to vary trusts when it is satisfied it is “expedient” to do so.

The trustee applied to the Court seeking orders: (i) declaring that the current protector of the trust had not been validly appointed in accordance with the provisions of the trust deed; (ii) appointing new protectors to fill the vacancy; and (iii) pursuant to Section 47 conferring on the trustee the power to vary the trust deed to enable the trustee to appoint protectors if the position became vacant in the future and to pay remuneration to professional protectors from the trust fund.

In granting all three orders the Chief Justice held: firstly, that the current protector had not been validly appointed; secondly, that the Court was satisfied that it had the inherent jurisdiction to appoint protectors in certain circumstances where the trust instrument makes provision for such an office; thirdly, that the proposed appointment of the protectors nominated was in the best interests of the due administration of the trust; and finally, that the proposed variations to the trust deed were within the broad ambit of the concept of “transaction” included in Section 47 and were expedient.

Carey Olsen Bermuda Limited represented the successful trustee in the case. 

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