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Cayman Court considers relevant ‘gateways’ for accessing a confidentiality order in relation to a non-contentious trust application

In a recent decision of the Grand Court of the Cayman Islands (In the Matter of a settlement dated 16 December 2009), Justice Kawaley granted the trustee’s ex parte application for confidentiality protections, including to place only an anonymized version of the Court documents on the public file and for all applications relating to the intended substantive directions application to be heard in private.

Having considered certain provisions in the Cayman Islands Constitution and the interaction between privacy and open justice rights, the Court observed that the relevant ‘gateways’ for accessing a confidentiality order in relation to a non-contentious application will typically be (1) the welfare of minors and/or (2) the protection of the private lives of persons concerned in the proceedings.

In granting the confidentiality orders sought, the Court was satisfied that there was no public interest in open justice which outweighed the countervailing interests of protecting the welfare of minor beneficiaries, protecting the private lives of the adult beneficiaries and generally protecting the trustee’s ability to peaceably hold and administer the trust assets. However, the Court made clear that applicant trustees who obtain ex parte confidentiality orders are subject to continuing duties to make full and frank disclosure, including a positive duty to make disclosure to the Court either before or after a confidentiality order is obtained if for instance information about the trust or beneficiaries’ wealth is in or enters the public domain.

The Court also provided some helpful guidance on the correct procedure for seeking confidentiality orders in trust administration cases and said “What doing justice means in the present context of interim applications for confidentiality orders in trust administration cases may be summarised as follows. The Court is required to act as a judicial watchdog, with one eye on the private needs of locally established trusts and the other eye on the public requirements of open justice. In procedural terms, such applications may properly be commenced following the procedure applicable to interlocutory injunction applications, commenced by interlocutory summons issued in the intended action. That is because the relief sought and granted is in effect an interlocutory injunction.”

 

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