The Paralysed Trustee: A Cayman Approach

While it is a relatively rare occurrence, circumstances can arise in the life of a trust that lead a trustee to the view that its hands are effectively tied and which potentially put the proper administration of the trust, and the interests of its beneficiaries, in great peril. Such a set of circumstances were considered by the Grand Court of the Cayman Islands (the "Court") earlier this year, and the resulting judgment offers guidance and comfort to both trustees and beneficiaries facing troubles of this nature.

In the judgment concerning In the Matter of Various Trusts (unreported, 22 February 2017), the Honourable Justice Mangatal considered an application (the "Application") made jointly by the beneficiaries of various trusts governed by Cayman Islands ("Cayman") law (collectively, the "Plaintiffs") for orders substituting a new trustee in the place of the original, and apparently hamstrung, trustee of those trusts.