The Isle of Man High Court has confirmed that it will in appropriate cases make orders protecting the privacy of settlors, beneficiaries and trust affairs in relation to trustee applications to court.
An important procedure for trustees and beneficiaries is the ability to apply to court to determine questions of doubt or to approve important decisions, which arise in the administration of a trust. The potential for publicity arising from the fundamental principle of open justice is, however, a disadvantage of such an application, in particular where the trust is family related rather than in a commercial context. Often there will be acceptable alternatives to an application to court, however, the risk of publicity can discourage such applications leading in some cases to sub-optimal decisions. A recent important Isle of Man decision in the case of the Delphi Trust has clarified how the Isle of Man courts will balance principles relating to open justice and privacy in relation to such applications and confirmed that the court will where appropriate make orders protecting privacy.
In this case, the trustee applied to the court for assistance under the court’s inherent jurisdiction and/or section 61 Trustee Act 1961 (which section allows a trustee to apply to court for directions on questions concerning the management and administration of a trust). The trustee sought a declaration as to the validity of the trust, the class of beneficiaries, and the validity of certain transfers of assets to the trustee. The trustee further sought an order that the proceedings be held in private and judgments etc anonymised as a major charitable beneficiary had expressed concerns that the publicity associated with the matter might have adverse consequences for the charity (e.g. that donations could drop).
Download the full article here: Privacy in trustee applications in the Isle of Man