Grand View Private Trust Company Ltd and another v Wen-Young Wong and Others
| Jurisdiction | UK Non-devolved |
| Judge | Lord Richards,Lord Hodge,Lord Sales,Lord Burrows,Lady Rose |
| Judgment Date | 08 December 2022 |
| Neutral Citation | [2022] UKPC 47 |
| Docket Number | Privy Council Appeals No 0064 and 0065 of 2020 |
| Court | Privy Council |
[2022] UKPC 47
Lord Hodge
Lord Sales
Lord Burrows
Lady Rose
Lord Richards
Privy Council Appeals No 0064 and 0065 of 2020
Privy Council
Michaelmas Term
From the Court of Appeal for Bermuda
JCPC 2020/0064
Appellants (Wong, Wen-Young, aka Winston Wong, and Wong, Ray-Tseng, aka Riley Wong)
Elspeth Talbot Rice KC
Dakis Hagen KC
Rod Attride-Stirling
Emma Hargreaves
Stephanie Thompson
(Instructed by Baker & McKenzie LLP (London) and ASW Law Ltd (Bermuda))
First Respondent (Grand View Private Trust Co Ltd)
Mark Howard KC
Jonathan Adkin KC
Karyl Nairn KC
Paul Smith
Adil Mohamedbhai
Niranjan Venkatesan
(Instructed by Skadden Arps Slate Meagher & Flom (UK) LLP)
Second Respondent (Wu Wang, Hsueh-Min, aka Jennifer Wang) did not appear and was not represented
Third Respondent (Wang, Ven-Jiao, aka Tony Wang) Richard Wilson KC
James Weale
Fozeia Rana-Fahy
Charlotte Beynon
(Instructed by MJM Ltd (Bermuda) and Stewarts Law LLP)
JCPC 2020/0065
Appellant (Wang, Ven-Jiao, aka Tony Wang) Richard Wilson KC
James Weale
Fozeia Rana-Fahy
Charlotte Beynon
(Instructed by MJM Ltd (Bermuda) and Stewarts Law LLP)
First Respondent (Grand View Private Trust Co Ltd)
Mark Howard KC
Jonathan Adkin KC
Karyl Nairn KC
Paul Smith
Adil Mohamedbhai
Niranjan Venkatesan
(Instructed by Skadden Arps Slate Meagher & Flom (UK) LLP)
Second Respondent (Wu Wang, Hsueh-Min, aka Jennifer Wang) did not appear and was not represented
Third and Fourth Respondents (Wong, Wen-Young, aka Winston Wong, and Wong, Ray-Tseng, aka Riley Wong)
Elspeth Talbot Rice KC
Dakis Hagen KC
Rod Attride-Stirling
Emma Hargreaves
Stephanie Thompson
(Instructed by Baker & McKenzie LLP (London) and ASW Law Ltd (Bermuda))
Heard on 8, 9 and 10 March 2022
Lord Richards ( with whom Lord Hodge, Lord Sales, Lord Burrows and Lady Rose agree):
It is a fundamental principle of equity that a fiduciary power may be exercised only for a purpose for which the power has been conferred. The main issue on this appeal is 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, when it simultaneously added a purpose trust as an object and removed all the members of a family who had until then comprised the entire class of objects. This was immediately followed by the trustee's exercise of its discretionary dispositive power to appoint the whole trust fund to the purpose trust, thus bringing the settlement to an end.
At first instance, Kawaley AJ (formerly Chief Justice), sitting in the Supreme Court of Bermuda, held, on a summary judgment application, that the trustee had invalidly exercised its powers to add and exclude discretionary objects and its powers of appointment, and declared the trustee's acts in those respects to be void and of no effect. An appeal against this decision was allowed by the Court of Appeal of Bermuda (Sir Christopher Clarke P, Smellie JA and Subair Williams JA), which also granted leave to appeal to the Board.
Many of the relevant facts are not in dispute and, where they are in dispute, the appellants accept that, for the purposes of their application for summary judgment, they must accept as true the facts as stated in the respondent's evidence.
The settlement was created by a declaration of trust dated 10 May 2001 (the GRT trust deed) which provided that it was to be known as The Global Resource Trust No 1 (the GRT). Although the trust deed was made, and the trusts declared, by the trustee, Global Resource Private Trust Co Ltd (the GRT trustee), it is accepted that the true economic settlors were two brothers, YC Wang and YT Wang (collectively, the Founders). Starting in the 1950s, they had built a group of companies, which came to be known as the Formosa Plastics Group (FPG), into one of the largest business conglomerates in Taiwan. YC Wang, who died in 2008, and YT Wang, who died in 2014, were respectively the chairman and president of FPG.
Shortly after the GRT was established, Grid Investors Corp (Grid), an investment holding company which was ultimately owned by the Founders and which owned shares in FPG companies (FPG shares), was transferred to the GRT trustee and remained the principal asset of the GRT. Grid's holding of FPG shares was then worth some US$90 million but has since increased significantly in value, being worth some US$560 million at the time of the appeal in Bermuda.
Reference to the detailed terms of the GRT trust deed is made below, but at this stage it is sufficient to note those persons identified in the trust deed as the beneficiaries and discretionary objects of the GRT. During the trust period of 100 years, the trustee had a discretionary power to apply the whole or part of the capital and income of the fund to or for the benefit of the children and remoter issue of the Founders. The power to add to or exclude from this class “any person or class or description of persons” is the power at issue on this appeal. No such power existed as regards the ultimate beneficiaries who had a fixed, contingent interest in the trust assets, if any, at the expiry of the trust period. They were specified as the children and remoter issue of the Founders then living, in terms which are set out later in this judgment.
On the same day as the GRT was established, another Bermuda-based trust was established at the direction of the Founders. By a deed dated 10 May 2001, Grand View Private Trust Co Ltd (Grand View) as trustee declared the Wang Family Trust (the WFT). This was something of a misnomer, because it is a purpose trust conferring no benefit on members of the Wang family or any other persons. The purposes included holding and acquiring FPG shares with a view to ensuring the continued growth, prosperity and competitive edge of FPG; providing “mutual assistance to mankind and help to those in need” through assistance to the charities established by the Founders and “improving the standard of living for mankind”; and “to implement and accomplish the Founders Vision” as set out in a statement by the Founders reproduced in a recital to the WFT trust deed. The purposes of this trust are both charitable and non-charitable. Non-charitable purpose trusts are permissible under Bermudian law by virtue of the Trusts (Special Provisions) Act 1989, as amended by the Trusts (Special Provisions) Amendment Act 1998. The trust assets largely comprise shares in investment companies owning between them FPG shares with a total value in May 2001 of some US$567 million, worth over US$3.5 billion at the time of the hearing before the Court of Appeal, assuming the same increase in value as the GRT's indirect holding.
The trustee companies, although separate entities, had common directors, of whom two (Susan Wang and Sandy Wang) were daughters of YC Wang, two (William Wong and Wilfred Wang) were sons of YT Wang, and the fifth (Wen-Hsiung Hung) had a close personal relationship with the Founders and had worked for many years for the FPG group. Mr Hung died in 2015. The Founders' immediate families are complex and extensive. Between them, they had 17 children.
The circumstances in which the GRT and the WFT were established were described in an affidavit sworn by Susan Wang in opposition to the appellants' application for summary judgment. Its contents are assumed to be true for the purposes of the application. She stated that the Founders “felt strongly that, wherever possible, one must give back to society” and “regarded FPG itself as one of their greatest legacies to Taiwanese society in view of its major contribution to the economic wellbeing of Taiwan”. The Founders also established and made very substantial contributions to higher education institutions, hospitals and other charitable foundations.
Significant holdings of FPG shares, worth some US$1.8 billion, were by 2000 held by a number of investment companies controlled by the Founders. Ms Wang says that her father made clear to her that neither of the Founders intended these FPG shares to form part of their estates on their deaths, and specifically that they did not wish to leave them to their heirs by way of inheritance. Instead, they wished them to be applied towards the perpetuation of FPG and the fulfilment of their vision of giving back to society. They hoped that their descendants would assume the role of caretakers or managers of that wealth for the greater good of society. By 2000, the Founders had turned their attention to succession planning, which included putting in place arrangements to perpetuate and formalise the basis on which the investment companies would be held, long into the future.
Following many months of discussions, involving lawyers in New York and Bermuda, it was decided that a significant portion of the assets held by the investment companies should be placed into a Bermuda purpose trust. Ms Wang says that at that time the Founders had it in mind that, as well as providing for the intended purposes, the Bermuda purpose trust would make provision for those family members who served as directors of its corporate trustee to benefit personally in some very limited way, as a means of motivating them to carry out their duties in supporting the growth and prosperity of FPG and the various charitable foundations. In early 2001, the proposal was modified and, as Ms Wang explains:
“28…At that time, it was decided that, instead of making provision within the Proposed Bermuda Purpose Trust for family members to be incentivised…there would be a separate private Bermuda discretionary trust from...
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