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ARTICLE · 13 JULY 2023

Privy Council Clarifies Proper Purpose Rule To Bermuda Trustee's Powers

Carey Olsen
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The recent and keenly awaited UK Privy Council judgment of Wen-Young Wong & Ors v Grand View Private Trust Company, 2022, clarifies the boundaries of trustee powers in Bermuda.

BermudaCorporate/Commercial Law
Helen Wang
Helen Wang
Ryan Chong
Ryan Chong
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The recent and keenly awaited UK Privy Council judgment of Wen-Young Wong & Ors v Grand View Private Trust Company, 2022, clarifies the boundaries of trustee powers in Bermuda.

The key issue before the formal body of advisers to the UK sovereign was whether the trustee of a settlement "exercised for a proper purpose" an express power contained in the trust deed to add and exclude discretionary objects, having added a purpose trust as an object and removed all family members comprising the entire class of objects.

THE BACKGROUND

The trust settlors were two brothers who founded Formosa Plastics Group, one of the largest business conglomerates in Taiwan.

The founders established two Bermuda trusts back in 2001. The first was Global Resource Trust No 1 (GRT). Its principal asset was an investment holding company owning Formosa Plastics Group's shares, estimated to be worth some USD560 million as of 2019.

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