Abstract
The Court of Appeal for Bermuda (Clarke P, Smellie JA and Subair Williams JA) recently handed down judgment in Grand View Private Trust Company Limited v Wong 20 April 2020, overturning the decision by Kawaley AJ at first instance and rejecting his use of the so-called substratum principle to limit the scope of widely drawn powers. The trust and wealth management industry should breath a collective sigh of relief. The industry is able to sell modern discretionary trusts to wealthy clients precisely because of their flexibility and the extent of the powers they contain, particularly discretionary powers of amendment, powers to add and remove beneficiaries and powers to distribute and resettle assets. The decision at first instance threatened to undermine that flexibility and to hamper the way in which trustees operate trusts of this kind. It is suggested that the Court of Appeal was right to reject the argument based on the supposed substratum rule. The argument gives inappropriate and independent life to what (if it is useful at all in this context) should only be a conclusionary metaphor; the argument involves what philosophers might describe as “unjustified reification”, or what the rest of us may think of as the tail wagging the dog. Use of the substratum metaphor risks distraction from the true task, that is, the proper construction of the words used in the relevant instrument in the light of the admissible factual matrix. The purpose of this article is to examine the Court of Appeal’s decision in Grand View, and tentatively to offer some thoughts on the analytical framework within which the validity of the exercise of powers is assessed.
ASSESSMENT OF COMPETITIVENESS OF MACHINE TOOL COMPANY
