Between 2007 and 2009, a former trustee accepted additions to the trust fund from an individual without appreciating that, under the terms of the trust instrument, the act of making those additions rendered the contributor a "settlor" and, by operation of the definitional machinery, an "excluded person" who could no longer benefit from the trust. Distributions were subsequently made to or for the benefit of that individual, and assets were transferred to related trusts established for his children in which he also held an interest. On the trustee's analysis, each of these steps had been taken in breach of trust.

Seeking to rectify the position, the current trustee turned to a remedy that will be familiar to trust practitioners: an application under section 64A of the Trusts Act (2021 Revision), the statutory codification of the Hastings-Bass  jurisdiction in Cayman law, for declarations that the relevant deeds of addition were void. Before filing the substantive proceedings, the trustee adopted what has become the established two-stage approach: by first making an ex parte  on notice application for confidentiality and anonymisation orders designed to shield the trusts, the family, and the proceedings from the public; followed by the substantive section 64A proceedings.

The Chief Justice identified the constitutional starting point in determining whether to grant a confidentiality order: the principle of open justice. Sections 7(1) and 7(9) of the Constitution require that proceedings be conducted in public and, as Newman JA observed in AHAB, "the administration of justice in Cayman must comply with the principle of open justice".

That principle, however, is not absolute. The Chief Justice noted how section 7(10) of the Constitution expressly permits derogation where it is "necessary or expedient in the interests of justice”, including where publicity would prejudice the interests of justice, involve the welfare of minors, or compromise the private lives of the persons concerned.

Drawing on a rich line of authority, the Chief Justice distilled the applicable test into three clear questions:

1. Gateway: Does the case fall within a recognised category permitting derogation from open justice?
2. Proportionality: Is the confidentiality sought necessary and proportionate?
3. Countervailing interest: Is there any public interest that outweighs the privacy interests engaged?

Applying the three-stage test to the present case, the Chief Justice found this to be "a paradigm case for the grant of confidentiality orders”.  The Court found that: the proceedings were properly characterised as internal trust administration matters; that there was no suggestion of public misconduct, regulatory concern, or wider public interest engaged; and that the information at stake (encompassing financial affairs, family relationships, and the identity and status of beneficiaries, including minors) was described as "inherently private”.

The Court accordingly granted the relief sought: anonymisation of the parties by initials, the filing of an anonymised originating summons only, sealing of the court file, private hearings, and anonymised publication of any resulting judgments or orders.

This judgment serves as a welcome restatement of the principles governing confidentiality in Cayman Islands trust proceedings.

For parties to trust applications and proceedings, the Chief Justice's three-stage test provides a clear framework that must be squarely addressed in every application:

1. Identify the gateway: establish that the matter falls within a recognised category permitting derogation from open justice.
2. Demonstrate necessity and proportionality: show that the confidentiality sought is no more than is required to protect the interests engaged.
3. Negate any countervailing public interest: affirmatively address the absence of factors that would tip the balance against confidentiality.

Obtaining confidentiality orders in trust cases is not a “rubber stamping” exercise. The matters outlined above must be properly advanced in evidence to support the relief sought.

The Harneys Private Wealth team in Cayman regularly acts for trustees, beneficiaries, protectors, court-appointed administrators and other interest holders across a wide variety of trust and estate matters and has extensive experience in securing confidentiality orders and other protective relief.