In separate but related proceedings, the BVI courts have permitted an applicant to inspect documentation relating to the liquidation of certain BVI companies.

Facts

In Robert Tchenguiz v Rawlinson & Hunter Trustee SA (the TFT Trust claim) Tchenguiz sought delivery of all proof of debt and claim documentation submitted by the defendant trustees to the joint liquidators in the liquidation of the companies.

In Robert Tchenguiz v Mark McDonald (the 3.14 applications) Tchenguiz sought inspection of documents on the court file pursuant to Civil Procedure Rule 3.14. The impetus behind Tchenguiz's desire to seek disclosure was to hold the trustee to account for allegations that it had made against him in separate proceedings involving the liquidation of the companies. The trustee's behaviour called into question broader issues about its conduct and integrity; as a beneficiary of the trust, Tchenguiz had the right to ensure that the trust was being administered properly.

Decision

In the TFT Trust claim, relief was granted subject to an undertaking by Tchenguiz not to use the documents for any purpose other than to seek the administration of the trust. The court held as follows:

  • As Tchenguiz was close to the economic position of a beneficiary absolutely entitled (ie, a discretionary beneficiary), relief should be granted.
  • It would not be appropriate to limit documents to those which specifically set out the claims of misconduct against Tchenguiz since it was key for him to see how these claims were deployed in the proceedings.
  • The provision of an undertaking by Tchenguiz not to use the documents for ulterior purposes was sufficient.

In the 3.14 applications, Tchenguiz was permitted to inspect certain affidavits in the proceedings on the basis that he had shown a good reason or legitimate interest to see the relevant evidence.

Comment

The decisions solidify the open-justice policy and highlight the importance of allowing beneficiaries to oversee trustees' activities in order to ensure that the trust property is properly managed and that trustees can be held to account accordingly.

For further information on this topic please contact Vicky Lord at Harney Westwood & Riegels' Hong Kong office by telephone (+852 5806 7800) or email (vicky.lord@harneys.com). Alternatively, contact Deirdre MacNamara at Harney Westwood & Riegels' London office by telephone (+44 20 7842 6080) or email (deirdre.macnamara@harneys.com). The Harneys website can be accessed at www.harneys.com.

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