BRITISH VIRGIN ISLANDS
COURT OF APPEAL
COMMERCIAL APPEAL – WHETHER TRIAL JUDGE MADE INCORRECT FACTUAL FINDINGS – DISCRETIONARY TRUST – RESPONSIBILITIES OF TRUSTEES – DUTY OF DISCLOSURE TO BENEFICIARIES – ACCOUNT OF TRUST ASSETS BY TRUSTEE – BURDEN OF PROOF – BREACH OF TRUST – PERSONAL LIABILITY TO ACCOUNT – KNOWING RECEIPT
A discretionary trust called the ZVM Trust (the “Trust”) was created by a wealthy businessman, in favour of, among others, his daughter, two individuals, and his son. The Trustee of the Trust at the material time was a company, whose director included one of the beneficiaries, (i.e. the son). Following the death of the businessman, several beneficiaries sought to have the Trustee of the Trust account for the assets, as they were convinced that the Trust had very substantial assets and were transferred to the son in breach of the terms of the Trust. The Trustee’s refusal to account resulted in these beneficiaries seeking orders that: (1) the Trustee be held accountable for the assets of Trust; (2) the Trustee be removed and (3) its director (the son) be held liable to account as a Constructive Trustee on the basis of knowing receipt.