On March 27 2003 the Judicial Committee of the Privy Council (as ultimate appellate court for the Isle of Man) delivered its eagerly awaited judgment in Vadim Schmidt as Appellant against Rosewood Trust Limited as Respondent. The appellant was successful, in that the Privy Council overturned the February 26 2001 decision of the Staff of Government Division of the High Court of the Isle of Man. However, the effect of the judgment is to remit the matter to the Isle of Man High Court for further consideration in the light of comments of the Privy Council contained in its judgment.
Vadim Schmidt was the son and the administrator of the estate of the object of discretionary powers under two discretionary settlements. He sought extensive disclosure of information and documents from the trustees. At first instance, the High Court had granted the application, and in so doing had indicated that while it was prepared to protect the interests of other third parties, it did not regard it as proper or possible to do anything to protect the separate interests of other beneficiaries or objects of powers under the settlements (an aspect which greatly concerned the trustees). As a part of its order, the court put in place provisions for review of some of the documentation prior to any decision as to whether it should be disclosed. Rather than placing such review in the hands of wholly independent parties, the court allowed heavy involvement on the part of the applicant’s legal and accountancy advisers in a way which would have required the creation of ‘Chinese walls’.
Download the full article: Privy Council Decision on Production of Information