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The recent unreported judgement of Kawaley J in the Grand Court of the Cayman Islands of Butterfield Trust (Cayman) Limited v A,B,C et. al (Cause 119 of 2020) raised a number of interesting issues in relation to a ‘category two’ Public Trustee v Cooper[1] application brought by the Trustee of a Cayman Islands trust (the “Trust”) involving the appointment of the whole of the Trust Fund to a sole discretionary beneficiary which resulted in the termination of the Trust, issues surrounding the construction of the Trust instrument, and whether (or not) the proposal to appoint out the whole of the Trust Fund to a single beneficiary was ‘detrimental’ to the interests of the minor and unborn beneficiaries.
Robert Mack (Head of Private Clients and Trusts) and Sarah Allison (Partner) of HSM Chambers acted for the Primary Beneficiary in this case.
Case Background
The Trust was a relatively standard discretionary trust for the primary beneficiary (the “Primary Beneficiary”) and her descendants of which the Butterfield Trust (Cayman) Limited was the sole professional trustee. The Primary Beneficiary was the mother of the two minor beneficiaries, defined as “B” and “C” in these proceedings, and together they constituted the whole of the living beneficial class. The beneficial class, however, was not closed as it included the descendants of the Primary Beneficiary, and any such persons who could be added to the beneficial class by the exercise of a power vested in the Trustee to do so.
The Trust Instrument contained an unusual provision which purported to prohibit any Beneficiary from benefiting from the Trust (and be labeled an “Excluded Person”) if they became resident in certain countries, including Australia (the “Exclusionary Provision”). Prior to the creation of the Trust the Primary Beneficiary and her minor children were all residents of Australia, and the minor children were born there and had spent their entire lives in Australia. Prior to the creation of the Trust the family migrated from Australia to avoid being classified as “Excluded Persons” so they would be capable of receiving benefits from the Trust. The Exclusionary Provision was designed to ensure the Trust was as tax efficient as possible, however, it had the unintended side effect of forcing the Primary Beneficiary and the minor beneficiaries uproot themselves from Australia and relocate to a foreign country.
Problems began to arise within the family unit as a result of their ‘forced’ migration from Australia. Despite the family’s attempt to adjust to their new lives, they failed to find their footing and longed to return to Australia. Due to the Exclusionary Provision the family recognized they would be deemed “Excluded Persons” and would remain that way so long as they resided in Australia. Given the fact the Primary Beneficiary and her children were the only living beneficial objects of the Trust, a technical question arose, although it was not touched upon in the judgement, of whether the Trust could continue to subsist without any eligible beneficial objects once the Primary Beneficiary and her minor children were deemed “Excluded Persons”. The Judge, however, was not required to address the issue but conclusions on this technical point varied between the legal advisors involved.
In late 2019 the Primary Beneficiary informed the Trustee of her desire to repatriate to Australia with her family. Both the Primary Beneficiary and the Trustee procured detailed Australian tax advice exploring the tax implications flowing from that decision. After considering the tax implications and all possible alternative options to sustain the Trust one of which included migrating the Trust to Australia, the Trustee determined the best course of action was to appoint out the whole of the Trust Fund to the Primary Beneficiary while she remained a non-Australian tax resident and for the Trust to terminate (the “Proposal”). All other possible options produced problematic technical issues or highly inefficient tax outcomes.
Prior to the Judgement in this matter, one of the minor beneficiaries developed a medical condition which necessitated her urgent return to Australia for specialist treatment. This minor beneficiary was also, due a pre-existing medical condition, more susceptible to contracting the COVID-19 virus and it was determined to be in her best interests that she should return to Australia with her father which in the view of her parents had superior medical facilities to cope with the growing global pandemic.
As a result of that family decision the minor beneficiary was deemed an “Excluded Person”[2] upon her return to Australia. This raised a further technical issue, as the Proposal would likely transgress an overarching provision of the Trust Deed which prohibited the exercise of any of the Trustee’s powers in such a manner which might directly or indirectly benefit an Excluded Person (the “Overarching Restriction”). The Proposal, if carried out, would therefore likely end up providing an Excluded Person with an indirect benefit as it was almost certain that some of the funds received by the Primary Beneficiary would be used to financially support an Excluded Person (the minor Australian resident beneficiary) over the course of time. Although the Trust Instrument contained a wide power of amendment which was capable of varying the terms of the Trust Instrument to enable an Excluded Person to enjoy an indirect benefit from the Trust, that power was subject to the Overarching Restriction which meant such variation of the Trust Instrument would not be possible without the intervention of the Court (the “Amendment Problem”).
Legal Summary
The combination of the Exclusionary Provision, the Overarching Restriction, and the Amendment Problem, coupled with the fact the Proposal was unquestionably a momentous decision in the life of the Trust, caused the Trustee to apply to the Grand Court of the Cayman Islands to invoke its inherit supervisory jurisdiction over the administration of Cayman Islands trusts in accordance with Section 48 and 72 of the Trusts Law (2020 Revision) (the “Trusts Law”) and Grand Court Rule Order 85, Rule 2 and ‘bless’ the Proposal.
Section 48 of the Trusts Law allows any trustee of a Cayman Islands trust to apply to the Court. “Any trustee or personal representative shall be at liberty, without the institution of suit, to apply to the Court for an opinion, advice, or direction on any question respecting the management or administration of the trust money…and the trustee or personal representative acting upon the opinion, advice or direction given by the Court shall be deemed, so far as regards that person’s own responsibility, to have discharged that person’s duty as such trustee or personal representative in the subject matter of the said application.”
Section 72 of the Trusts Law empowers the Court to vary the terms of a Cayman Islands trust on behalf of minor and unborn beneficiaries provided that any such amendment or arrangement would not be “to the detriment of [such] person.”
Grand Court Order 85, Rule 2 enables trustees, amongst others[3], to apply to the Court for the determination of any question arising out of the administration of a Cayman Islands trust or for any relief the Court may grant including for any question arising out of the execution of a Cayman Islands trust. As such, Order 85, Rule 2 compliments Section 48 and Section 72 of the Trusts Law.
The learned judge outlined the factors he considered in reaching his judgement:
- Does the Trustee have the necessary power to enter into the proposed transaction?
- Is the Court satisfied that the Trustee has genuinely formed the view that the proposed transactions are in the interests of the Trust and its beneficiaries?
- Is the Court satisfied that this is a view that a reasonable Trustee (having taken the same enquires and faced with the same circumstances) could have properly arrived at?
- Is the Trustee operating under any conflict of interest, which would prevent the Court from approving the Trustee’s decision?
The learned judge concluded each of the above factors had been satisfied.
The learned judge concluded the Trustee had the necessary power to distribute the whole of the Trust Fund to the Primary Beneficiary in accordance with the Proposal. The learned judge also accepted that notwithstanding an indirect benefit might accrue to an Excluded Person it nevertheless consented to the variation of the Trust Instrument to remove the restriction prohibiting an Excluded Person from taking an indirect benefit from the Trust and that on the whole the Proposal was in the interest of the beneficiaries.
The learned judge concluded the Trustee had made genuine and thorough enquires regarding the implications surrounding the Proposal, including the Australian tax implications arising which played a significant factor in the Trustee reaching its decision to agree the Proposal.
Lastly, the learned judge found there was no conflict of interest which might prevent him from approving the Proposal, as all parties involved in the Application including the protector and the guardian ad litem for the minor beneficiaries had supported the Application. As such, the learned judge ‘blessed’ the Proposal.
Commentary
The case was interesting for a variety of reasons. It is the first time the Cayman Islands Court has applied the ‘no detriment’ test introduced by an amendment to Section 72 of the Trusts Law (2020 Revision). Prior to the revision of Section 72 of the Trusts Law in 2020, it was necessary to show that any proposed Court sanctioned variation of a trust instrument must be for the ‘benefit’ of any beneficiary affected. It is debatable whether (or not) the Proposal would have satisfied the previous ‘benefit’ test, and the somewhat more neutral ‘no detriment’ test likely made the learned judge’s decision to approve the Proposal easier.
The Exclusionary Provision was quite unusual as the vast majority of trust instruments do not purport to restrict where beneficial objects may or may not reside. The fact the Exclusionary Provision was specifically targeted at the country the family considered home, however well intentioned, actually caused much suffering for the family. Although the Exclusionary Provision was designed to make the Trust as tax efficient as possible, it had the side-effect of fracturing family ties in their home country, and traumatized the minor beneficiaries. It also resulted in much family disharmony. As such, any tax benefits achieved were effectively wiped out by the detrimental effects on the family unit arising from their ‘forced migration’. The learned judge acknowledged that “…genuine family welfare concerns…” played a major role in his decision, thus effectively outweighing any tax benefits achieved by the Exclusionary Provision. This wider concept of ‘benefit’ outside of financial considerations was further exacerbated by the presence of the global COVID-19 pandemic as acknowledged by the learned judge. That such a unique external factor should play into the learned judge’s decision making process is unprecedented in the author’s experience.
Lastly, the fact pattern was highly unique[4]. The Trust was intended to last for multiple generations however it was terminated in under two years from its creation. The Trustee was faced with three very stark choices (1) Take no action and allow the Trust to either fail for want of beneficial objects or (the alternative analysis) allow the Trust to go into ‘hibernation mode’ awaiting the day (if any) that one or more of the beneficiaries ceased to become resident in a restricted country (2) Take some form of action to either migrate the Trust, or earmark a portion of it for the minor and unborn beneficiaries in some manner, despite the prohibitive tax consequences that would arise[5] or (3) Approve the Proposal.
Looking at all the available options none were wholly satisfactory and each brought its own level of risk for the Trustee. Doing nothing would either result in the Trust failing or the beneficiaries likely never receiving any further benefit from it, implementing some sort of scheme outside of the Trust would attract prohibitive tax consequences capable of wiping out the entire value of the Trust Fund, and carrying out the Proposal meant depriving all but the Primary Beneficiary of any possible financial benefits. In reaching his decision the learned judge took the view that the intentions of the Primary Beneficiary towards her minor children were pure, and that the minor beneficiaries would in due course receive some financial benefits via their mother during their lifetimes. The learned judge also took comfort from the fact the minor beneficiaries remained beneficiaries of other family trusts and were therefore capable of receiving benefits from those family trusts over the course of their lives. In the end, the learned judge was satisfied the Proposal was the best possible option amongst a range of otherwise unpalatable options and ‘blessed’ the Proposal.
Footnotes
[1] [2001] WTLR 901. The ‘category two’ variant being where there is no real doubt as to the nature of the trustees’ powers and how the trustees wish to exercise such powers but because the decision is particularly momentous, the trustees wishes to obtain the blessing of the court for the action on which they have resolved and which is within the scope of their powers.
[2] The way in which the rules of domicile operate for minors from an Australian perspective is that it follows the domicile of the father where the parents are married. This created a separate technical issue in that the minor beneficiary who did not return to Australia was also deemed to have resumed an Australian domicile of dependency. A debate arose amongst the legal advisors as to whether that meant the minor beneficiary who did not return to Australia should also be deemed an “Excluded Person”. This was not touched upon in the judgement and since the Proposal envisioned the Primary Beneficiary alone would receive the whole of the Trust Fund it had no impact on the ruling.
[3] Includes executors, administrators, beneficiaries or an estate or a trust (excluding beneficiaries of STAR trusts), and enforcers of STAR trusts (see Order 85 Rule 2(4)).
[4] The learned judge stated the circumstances were “…strikingly unusual…”.
[5] Australian tax advice concluded that some options under consideration could have resulted in a rate of tax amounting to 100% thus completely wiping out the value of the Trust Fund.
HSM is proud to once again be ranked by Benchmark Litigation Latin America in their 2020 assessment of notable dispute resolution law firms in the Cayman Islands.
This recognition highlights HSM’s ability to successfully handle litigation and dispute matters.
In addition to the firm being recognised, HSM Partner Ian Lambert and HSM Senior Associate Adam Crane have been featured as Litigation Stars along with HSM consultant William Helfrecht.
Benchmark Litigation shares that HSM’s dispute group “successfully obtained the Cayman Islands recognition of the Hong Kong appointed interim receivers over a private equity fund in the Cayman Islands. Litigation stars Ian Lambert and Adam Crane acted as the attorneys for the Joint Official Liquidators of several registered funds referred to as the “AwalCos,” defending claims within liquidation proceedings for each of those funds. The duo contributed to the successful group defense of the AwalCos at trial, and acted for the AwalCos in the appeal before the Cayman Islands Court of Appeal in May and June 2019. The appeal was heard over the course of six weeks and is expected to become precedent-setting related to asset recovery/tracing and proprietary claims. This complex matter involves contracts and parties governed by the laws of various jurisdictions, including the Cayman Islands, Saudi Arabia, Bahrain, UK, Switzerland and United States, and was subjected to various cross-border proceedings including Chapter 15 recognition in the Southern District of New York/Delaware, United Kingdom, Switzerland and Saudi Arabia. Lambert and Crane also represent two Official Liquidators appointed by the Cayman Court over respective funds in an ongoing liquidation matter.”
Benchmark Litigation Latin America is known to be the definitive guide to the region’s leading litigation law firms and lawyers. They have been researching and publishing firms since 2008 and their coverage expands beyond Latin American to cover areas in the Unites States, Canada and most recently, Europe and the Asia-Pacific region.
Our property lawyers in the Cayman Islands share the important characteristics and differences between leases, licences and period tenancies.
What is a Licence?
A licence is a permission given by the proprietor of land or a lessor which allows the licensee to do some act in relation to the land or the land comprised in the lease which would otherwise be a trespass, but does not include an easement or a profit.[1]
Typically used to permit non-exclusive occupation of a property on a short term basis, true licences merely create a personal right, providing permission for a licensee to do something on a licensor’s property, such as occupy the property, and do not transfer a proprietary interest.
Access arrangements pending a binding contract
It is not unusual for a prospective tenant or purchaser to require early access to a property (for example to start trading or fitting out the premises) whilst in the process of agreeing documentation such as a lease or purchase agreement and pending completion of same. Such early access may also be granted under the terms of a carefully drafted licence to occupy.
What is a Lease?
A lease is both a contractual relationship and an estate in land, and therefore capable of existing independently of contract. There are many types of leases and ways of describing them. However, generally where a document has any of the following characteristics, it will likely be construed as a lease:
- (i) It grants exclusive possession;
- (ii) It is for a fixed term (i.e. period of length of tenancy); and/or
- (iii) It provides for payment (i.e. rent).
Exclusive possession
The distinguishing feature of a lease is that, unlike with a licence, the tenant or lessee has exclusive possession of the let property.[2] A person has exclusive possession if he can exercise the rights of the landowner and exclude both the landlord and third parties from the land (i.e. exclusive occupation of accommodation).
Notably, possession is not the same as occupation: a tenant or lessee may have possession by virtue of being able to receive the rents and profits of the land (reflecting the right of ownership) but the person in occupation could be the sub-lessee to whom the lessee has granted a sub-lease.
What about a periodic tenancy?
A periodic tenancy is a tenancy from year to year, half year to half year, quarter to quarter, month to month, week to week or the like.[3] A periodic tenancy is deemed to exist where:
- (i) in any lease the term is not specified and no provision is made for the giving of notice to terminate the tenancy, the lease shall be deemed to have created a periodic tenancy;[4] or
- (ii) the proprietor of land permits the exclusive occupation of the land or any part thereof by any other person at a rent but without any agreement in writing, that occupation shall be deemed to constitute a periodic tenancy;[5]
For periodic tenancies created by (ii) above, the period of the period tenancy shall be the period by reference to which the rent is payable, and the tenancy may be determined by either party giving to the other notice, the length of which shall subject to any other law, be not less than the period of the tenancy and shall expire on one of the days on which rent is payable.[6]
Notably, as with leases or agreements for leases for a term not exceeding two years, periodic tenancies do not need to be registered.[7]
Will labelling an agreement a licence make it a licence?
Importantly, just because a document purports to create a “licence” does not mean that it will be construed as a licence instead of a lease. Calling a lease a licence does not make it so. The court will analyse the form and terms of the agreement along with the substance of the rights and obligations created under the agreement when deciding whether it is a licence or a lease.
The fact that the “licence” is for a fixed period of time does not necessarily prevent it from being a licence, as a licence can be for a fixed term. Similarly, if the licensee is required to make a payment under the licence (which the parties call a “licence fee”), this will not necessarily prevent the arrangement from being regarded as a licence.
Where there is a written agreement documenting rights of occupation, it is a question of construction as to whether there is a tenancy or a licence to occupy. The court will consider the agreement as a whole. It has been held that the court should not award marks for drafting or attempt to determine whether general clauses in a written agreement are more like clauses found in a tenancy or a licence. Instead, the owner’s rights and powers should be evaluated “together and cumulatively” in determining whether an agreement contains a grant of exclusive possession.[8]
Advantages and Disadvantages of Each Arrangement:
Leases
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Periodic Tenancies
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Licences
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Stamp Duty
Stamp duty is payable on any document described as a lease, tenancy, agreement to lease, licence (where exclusive possession is granted), or any other document which grants leasehold title to a property.
There are severe penalties for the late-stamping or non-stamping of instruments required to be stamped.[12] As such, it is important to ensure that stamp duty is paid where required, and that when in doubt, legal advice is sought regarding the nature of the agreement and whether stamp duty is payable. Pursuant to the Stamp Duty Law (2019 Revision) (“SDL”), stamp duty is payable on all written documents[13] which convey or transfer a proprietary interest, including a leasehold interest[14] of a parcel or parcels of land. Stamp duty is payable on any document described as a lease, tenancy, agreement to lease, licence (where exclusive possession is granted), or any other document which has the effect of granting the right to use property for a fixed or defined period of time, other than perpetuity (i.e. leasehold title to a property).
How much Stamp Duty is payable?
Leases are subject to a stamp duty assessment to establish the amount of ad-valorem stamp duty payable. Stamp duty is payable on the average annual rent over the term (i.e. the length of the lease) or the market rent,[15] whichever is higher.
The rate of stamp duty payable is dependent on the lease term. When determining the term of the lease any provisions or options within the lease for extending the lease term must be included.[16]
Rates based on Lease Term
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Payable by?
Under the Stamp Duty Law, in respect of any “conveyance or transfer of land, strata title or interest therein” the transferee must ensure that the relevant instrument is filed and the duty paid. With leases, the tenant or lessee is under the statutory obligation to pay the stamp duty within forty-five (45) days of the grant of the lease. Notably, however, the parties can negotiate who actually pays the stamp duty.
Penalties
The law prescribes severe penalties for the late-stamping or non-stamping of instruments required to be stamped.[17] As such, it is important to ensure that stamp duty is paid where required, and that when in doubt, legal advice is sought regarding the nature of the agreement and whether stamp duty is payable.
Thinking of leasing or licencing your residential or commercial property?
Contact our property team at HSM and we can guide you on the more suitable option for your needs and assist you with drafting, reviewing documents, negotiations and registration where necessary.
Footnotes
[1] Section 2 of the Registered Land Law (2018 Revision)
[2] Street v Mountford [1985] AC 809
[3] Section 2 of the Registered Land Law (2018 Revision)
[4] Section 45(1) of the Registered Land Law (2018 Revision)
[5] Section 45(2) of the Registered Land Law (2018 Revision)
[6] Section 45(3) of the Registered Land Law (2018 Revision)
[7] Section 28 of the Registered Land Law (2018 Revision)
[8] Esso Petroleum Co Ltd v Fumegrange Ltd [1994] 2 EGLR 90
[9] Colchester and East Essex Co-operative Society v Kelvedon Labour Club [2003] EWCA Civ 1671
[10] Per section 98(1) of the Registered Land Law (2018 Revision), without prejudice to section 127, a licence is not capable of registration.
[11] Section 98(2) of the Registered Land Law (2018 Revision)
[12] Section 22 of the Stamp Duty Law (2019 Revision)
[13] Notably, as stamp duty is only payable on written documents, oral agreements providing exclusive possession will not attract stamp duty. Accordingly, oral lease agreements can be attractive to those seeking to avoid stamp duty or for those seeking the simplicity and ease of such arrangements. However, there are inherent disadvantages to such agreements, especially if there are any disputes or there is ever any need to clarify the terms of the agreement. It has been said that oral agreements are not worth the paper they are written on.
[14] Whether or not it is registerable with Lands and Survey
[15] Lands and Survey’s Valuation and Estates Office will undertake a Market Valuation to establish the Market Rent.
[16] The calculation for ‘length of lease’ does not include any ‘option(s) to renew’, only to ‘options to extend’.
[17] Section 22 of the Stamp Duty Law (2019 Revision)
The long-awaited Trade Marks Act, No. 8 of 2015, (‘the New Act’) and accompanying Trade Marks Regulations, 2020, (‘the Regulations’) came into effect in Trinidad and Tobago on 25 June 2020.
The Act was originally passed in June 2015, but its implementation was delayed pending the finalisation of the accompanying Regulations. The Trade Marks Act, Chap. 82:81 (‘the Repealed Act’) has been repealed. The new official fees and forms are available on the Intellectual Property Office website at http://ipo.gov.tt/.
What’s new?
Trade mark applications can now be filed electronically and will be published through an online Trade Marks Journal, instead of in the local newspaper. These measures eliminate the need for the payment of official publication fees. Certificates will also be issued electronically. Trinidad and Tobago is now one in only a handful of Caribbean countries to modernise in this manner. It is hoped that other Caribbean countries will follow their lead, especially in light of the COVID-19 pandemic and its restrictions, which have accentuated the need for a more efficient way of working.
Under the Repealed Act, trade marks were registered in either Part A or B of the Register, Part A being for “distinctive” marks and, Part B being for marks with a lower level of distinctiveness yet “capable of distinguishing” goods or services of one proprietor from those of another. This distinction no longer exists under the New Act. Any sign which is capable of distinguishing will be accepted under the provisions of the New Act, so long as the usual absolute and relative grounds requirements are otherwise met. Trade marks registered in Parts A or B of the Register under the Repealed Act are now simply considered registered trade marks under the New Act without the former categorisation.
To the extent that non-conventional marks, such as sounds, scents and tastes, can be represented graphically and are capable of distinguishing, they are protectable under the New Act. However, in practice, the requirement for graphical representation is a challenging standard to meet for these types of marks and, therefore, it is yet to be seen how progressive this revision will be in practice.
Under the Repealed Act, Trinidad and Tobago was operating on the basis of the 7th Edition of the Nice Classification, which classifies goods and services in Classes 1 to 42. Applications filed under the New Act must now be classified in accordance with the latest version of the Nice Classification (as updated from time to time). Currently the 11th Edition of Nice is in effect. When trade marks with goods and/or services classified under the 7th Edition of the Nice Classification are renewed, they must be reclassified into the latest Edition of Nice at the same time. It is also possible to file an amendment application in order to reclassify the goods and services covered by an existing trade mark registration into the latest edition of Nice under the New Act, where reclassification is needed, at any time.
Brand owners may see a reduced number of office actions handed down under the New Act as a result of the abolishment of the archaic requirement for the association of similar / identical trade marks owned by a single proprietor. Any entry in the Register kept under the Repealed Act indicating that an existing registered mark is associated with any other mark also ceased to have effect with the implementation of the New Act. This also means that trade marks which were previously associated can be assigned separately, if desired.
The New Act also offers: enhanced protection for “well-known” marks under Article 6bis of the Paris Convention; protection for collective marks (protection under the Repealed Act extended to certification marks, but not collective marks); revised rules on grounds of revocation on grounds of non-use; and new criminal sanctions and enforcement measures.
What’s next?
Trinidad and Tobago still intends to accede to the Madrid Protocol in accordance with Section 57 of the New Act. Further Regulations will be required in order to give effect to the provisions of the Madrid Protocol once Trinidad and Tobago becomes a contracting party. In the future, it will be possible to designate Trinidad and Tobago as part of an application for International Registration or base an International Registration on a national Trinidad and Tobago trade mark application, where the applicant has a personal connection to Trinidad and Tobago (i.e. whether as a citizen, by domicile or by way of a local industrial or commercial establishment). Once Trinidad and Tobago accedes to the Madrid Protocol, it will join a small number of Caribbean Islands to do so to date, namely, Antigua and Barbuda, Cuba, the Caribbean Netherlands (BES Islands), Curacao and St. Maarten. However, it should also be noted that the French Caribbean can be protected under an International Registration designating France too, as well as a national French trade mark registration, of course.
It will be interesting to see if Trinidad and Tobago’s accession to the Madrid Protocol results in a lower number of locally filed trade mark applications by brand owners and a corresponding increase in the number of office actions issued by the Intellectual Property Office as a result, as we have seen in Antigua and Barbuda.
Grand Cayman has always been a destination for day-trippers and snowbirds alike. In 2019, we saw the highest arrival numbers in recorded history of the tourism industry, and while 2020 has seen less foot traffic, the Cayman Islands Government has attracted immensely positive attention and favourable sentiments at home and abroad for their handling of the COVID-19 pandemic. As a result of strict measures including a swift and early lockdown, exceptional healthcare, and some of the highest per capita testing measures in the world, the Cayman Islands are cautiously coming out of lockdown in time for summer and officially reopened for business.
The Cayman Islands, made up of three jewel-like islands in the Northwest Caribbean Sea, the largest being cosmopolitan Grand Cayman, is home to a thriving business community and quiet residential enclaves, and an ideal and welcoming locale for the residential investor. Thanks to these islands’ management of the Novel Coronavirus, Grand Cayman, in particular, has seen renewed interest in potential residents of independent means.
There are many reasons to consider this an ideal place to settle for the long term. With the borders expected to reopen in September 2020, it is easy to travel from Miami, New York and Toronto, there are also regular direct flights from Heathrow. Facilities for private jet aircraft are as readily available as berths for yacht owners. Reliable utilities and telecommunications mean that your business continuity is guaranteed, even in the worst weather. Setting up a business can be arranged remarkably quickly and in many cases, is easier than in other business markets and financial centres.
Residency by independent means is a straightforward process while acquiring real estate for the residential investor is a simple and streamlined procedure and can be expedited by a competent attorney. Restrictions on the foreign ownership of property are minimal, and beyond the one-time stamp-duty paid upon purchase, there are no subsequent property taxes.
And if you just might be at the stage of your career or investment trajectory when it is time to begin thinking of where to spend your retirement, there are few locales as well situated and equipped as Cayman to consider for watching the sun set as a new profession. Grand Cayman boasts miles and miles of pedestrian-friendly footpaths and bicycle lanes, even along the famous Seven Mile Beach. Sunscreen and regular health checks are highly recommended due to our proximity to the equator, but these can be carried out locally thanks to easy access to accredited medical doctors, along with the region’s leading cardiac and tertiary care hospital with a second opinion always less than an hour’s flight away.
Equal parts cosmopolitan and private, you will find that your privacy is respected here in Cayman and your safety and security always ensured; the Cayman Islands enjoy one of the lowest crime rates in the world and our status as a British Overseas Territory ensures the protection of the United Kingdom from all contingencies. Livable, accessible, safe and welcoming – you will find the routes to long-term residency are remarkably simple. Why not come for a visit? Chances are that you will want to stay for a while.
As a full-service law firm, HSM is able to assist clients with setting up a business, residency requirements and property transactions. Author and Partner, Linda DaCosta, manages our property team and has been practicing in the Cayman Islands legal field for over 25 years.
Associate Alastair David covers this case, which has relevance to permanent residence applications and revocations. On 29 April 2020, the Grand Court in the Cayman Islands handed down a decision in the case of Ellington v Chief Immigration Officer of the Cayman Islands. The Grand Court concluded that:
- The Law surrounding Prohibited Immigrants was incompatible with Section 9 of the Bill of Rights; and
- The decision of the Immigration Appeals Tribunal was wrong in Law.
Currently, the Attorney General is appealing against the decision with respects to (i) and therefore this article will focus on (ii).
The Background
Mr Ellington is a Jamaican national who has resided in the Cayman Islands since 2007. Up until 2013, Mr Ellington’s stay in the Cayman Islands was rather unremarkable. He had a series of work permits and had no convictions recorded against him. However, in August 2013, he married his first wife (a Caymanian) and then on 23 September 2013, was involved in a robbery which took place in a supermarket. Mr Ellington’s part in the robbery was that of a ‘getaway driver’ and he pleaded guilty to being an accessory after the fact to the robbery. Justice Quin sentenced him to a custodial sentence of 2 years and made no recommendation in regards to his deportation from the Cayman Islands.
In consequence of his sentence, being a term of imprisonment of greater than 12 months, Mr Ellington automatically became designated a Prohibited Immigrant, by operation of Law.
In December 2013, while Mr Ellington was a serving prisoner at HMP Northward, his wife gave birth to a child. As Mr Ellington’s wife was Caymanian and settled in the Cayman Islands their child was born Caymanian. While Mr Ellington was serving his sentence he applied for an Residency and Employment Rights Certificate (“RERC”) as the Spouse of a Caymanian. When Mr Ellington was released in February 2015 his application was still pending.
A RERC as the Spouse of a Caymanian gives the holder the ability to live and work in the Cayman Islands outside of the Work Permit regime. Unlike an RERC obtained under the points system, the holder of an RERC as the Spouse of a Caymanian can work in any role in the Cayman Islands and pay no annual fee whereas an RERC holder who obtained his RERC through the points system can only work in the job title on his RERC and they (or their employer) are expected to pay an annual fee the equivalent to that of a work permit for their occupation.
Upon his release from custody Mr Ellington was treated as a “tourist visitor” for the purposes of the Immigration Law.
In October 2015, Mr Ellington’s relationship with his first wife broke down and he soon after entered into a relationship with a new woman who he was later to marry. As a result of the breakdown in his first marriage, Mr Ellington’s RERC application was rejected. Mr Ellington’s second wife was also Caymanian and had a Caymanian child from a previous relationship.
Mr Ellington was formally divorced from his first wife on 21 September 2016 and he married his current wife on 1 October 2016.
A new RERC as the Spouse of a Caymanian application was submitted on 10 November 2016. That application was eventually rejected on 27 April 2017 by the Caymanian Status and Permanent Residency Board (“the Board”).
By the time of the rejection of the second RERC application, Mr Ellington was only permitted to stay in the Cayman Islands as a result of an interim injunction obtained on 10 November 2016, preventing his removal from the Cayman Islands pending a leave application to Judicially Review his designation as a Prohibited Immigrant.
Mr Ellington appealed the rejection of his RERC to the Immigration Appeals Tribunal (“IAT”) and while the IAT accepted the Board erred in Law in their initial decision, they declined to grant him an RERC as the Spouse of a Caymanian. The IAT’s “reasoned” decision for rejecting the application was as follows:
“By unanimous vote the Tribunal refused to grant RERC as a result of consideration of the appellant’s character under Section 31(3) (c) of the Immigration Law (2015 Revision), namely his conviction and sentence to 2 years imprisonment… The Tribunal accept that the marriage was stable… but the one allegation that remains is the conviction.”
Appeal to the Grand Court
The Appellant appealed to the Grand Court on a number of basis. The main ground was:
- The IAT had failed to consider the Appellant’s and his family’s Constitutional Rights, i.e. their section 9 Bill of Rights (“BOR”) right to a family and private life.
Position of the Parties
The Appellant’s position was straight forward. As a result of the BOR, the Tribunal were required to consider whether or not it was “reasonably justifiable” to reject his application.
The Attorney General defended the appeal on the basis that:
- Section 9 of the BOR was not engaged by the rejection of the RERC.
- The Factors in Section 31(3) Immigration Law (2015 Revision) (“the Law”) were the only considerations.
The Law
Section 9 Bill of Rights
(1) Government shall respect every person’s private and family life, his or her home and his or her correspondence.
(3) Nothing in any law or done under its authority shall be held to contravene this section to the extent that it is reasonably justifiable in a democratic society —
(a) in the interests of defence, public safety, public order, public morality, public health, town and country planning, or the development or utilisation of any other property in such a manner as to promote the public benefit;
(b) for the purpose of protecting the rights and freedoms of other persons;
(e) to regulate the right to enter or remain in the Cayman Islands.
Section 24 Bill of Rights
- It is unlawful for a public official to make a decision or to act in a way that is incompatible with the Bill of Rights unless the public official is required or authorised to do so by primary legislation, in which case the legislation shall be declared incompatible with the Bill of Rights and the nature of that incompatibility shall be specified.
Section 31 Immigration Law (2015 Revision)
(1) The spouse of a Caymanian may apply to the Chief Immigration Officer or the Caymanian Status and Permanent Residency Board for permission to reside in the Islands and if such application is successful the Chief Immigration Officer or the Board, as the case may be, shall grant to the applicant a Residency and Employment Rights Certificate for a period of seven years and such Certificate when granted may, upon application, be renewed at the discretion of the Chief Immigration Officer or the Board.
(3) The Chief Immigration Officer or the Board shall take into account the following, namely that-
(a) the spouse of the applicant is Caymanian;
(b) the marriage is not a marriage of convenience;
(c) the applicant is of good character;
(d) the applicant is in good health as evidenced by a recent medical certificate;
(e) the marriage is stable; and
(f) the applicant and his spouse have sufficient financial means to support himself and his dependants listed on the application as accompanying him.
(6) The spouse of a Caymanian shall have no right to reside or be gainfully employed in the Islands unless he is the holder of a Residency and Employment Rights Certificate granted under this section and he shall not be entitled to apply for, or to be granted, a work permit or the renewal of a work permit, but where a work permit is in effect on the date of the marriage he may continue to work under the terms and conditions of the work permit until its expiration.
(7) Notwithstanding subsection (6), whenever the Board or the Chief Immigration Officer is satisfied that there are exceptional circumstances it or he may grant or renew a work permit for the spouse of a Caymanian for a period not exceeding three years in total after which no further permits may be granted or renewed in respect of that person unless the marriage is dissolved.
(9) Where a person who is the spouse of a Caymanian and who has at any time been-
(a) the holder of a work permit;
(b) employed by the Government of the Islands; or
(c) employed in the Islands by the Government of the United Kingdom,
applies for a Residency and Employment Rights Certificate under this section, then in the absence of exceptional circumstances the Board or the Chief Immigration Officer shall approve his application.
Judgment
In his Judgment Williams J confirmed that not only was Section 9 of the BOR engaged with regard to RERC applications but that the Tribunal had to consider Section 9 when dealing with an application.
- The Plaintiff’s family life consists of his relationships with members of his family. Therefore his relationships with his wife or any relevant children under 18 are considered to be family life that he has a right to have, protected under s.9 of the BOR. The wording of s.9(1) BOR implies a positive obligation on the part of the state to respect existing family life, not just a negative duty to avoid expulsion. If there is a failure to respect family life, the question moves on to whether the interference is necessary or reasonably justifiable in a democratic society for a reason permitted in s.9(3) of the BOR.
- In an application by a person for residency rights under an RERC if their spouse is a Caymanian settled in the Cayman Islands, consideration must be given to both spouses’ rights under s.9 BOR….
- I am satisfied that s.9 BOR arguments in a RERC application or in cases where the remaining parent or child is a Caymanian will come into play and they involve the weighing up of these opposing rights.
As the Tribunal had not considered Section 9 of the BOR Williams J granted the appeal and remitted the matter back to the Tribunal.
Relevance to Other Matters
The Judgment of Ellington has potentially far reaching effects in respect to the Permanent Residence system in the Cayman Islands. For the first time, the Grand Court has stated that Section 9 considerations must form part of a formal decision process when considering RERCs. The question becomes whether or not this case also impacts:
- RERC applications under the points system.
- Revocation of RERCs as a result of a breakdown in marriage.
RERCs under the Points Scheme
Currently, neither the Board, the Director of Workforce Opportunities and Residency Cayman (“WORC”) nor the IAT (when considering matters on appeal) appear to consider Section 9 of the BOR or at least the reasons given for their decisions do not specifically reference Section 9 Paragraph 76 of the Judgement in Ellington, certainly gives support to the contention that a two stage consideration should take place in all RERC applications and therefore there appears to be no logical reason why a decision maker should not consider the applicant (and his families) constitutional rights when considering an application under the Points System.
A decision to grant or reject an RERC under the points system would appear to engage Section 9 of the BOR in that a decision to reject that application would mean that the individual would have to leave the Cayman Islands. Section 37 (4) Immigration (Transition) Law, 2018 makes it clear that a failed applicant would have to leave the Cayman Islands when it says:
(4) Where an application under subsection (1) has been refused and the applicant has not appealed against such refusal or has appealed against such refusal and lost the appeal, the applicant is barred from re-applying under the provisions of that subsection and shall leave the Islands upon the expiration of any period during which the applicant was allowed to work under section 66(4) unless the applicant is entitled to remain by virtue of any other provision of this Law; and such debarment shall continue –
(a) in the case of a worker, until the worker re-qualifies under the criteria contained in this section having taken the break in stay required under section 66(1); or
(b) in the case of a Government employee, for a period of nine years following the date of the refusal of the Government employee’s application or any subsequent appeal in respect of that application.
However, one issue that an applicant would have to overcome in seeking to require a decision maker to apply a two stage test would be the current Law. Section 37 (3) Immigration (Transition) Law, 2018 states:
(3) In considering an application for permanent residence under subsection (1), the Board or the Director of WORC upon applying the criteria set out in the points system shall only grant permanent residence to all applicants attaining one hundred and ten points or more.
Whether Section 37(3) is compatible with the BOR and, in particular, Section 9 and Section 24 of the BOR, is a matter which will need to be determined by the Courts (save for a change in the Law). On any reading of Section 37(3) it would appear that it prevents a Section 9 consideration and therefore might well be incompatible with the BOR.
Revocation of RERCs as a Result of a Breakdown in Marriage
If an individual is married to a Caymanian or to a RERC holder, they can obtain an RERC based upon their marriage. However, if their marriage was to come to an end, the Section 40 (1) of the Immigration (Transition) Law, 2018 states:
(1) Subject to subsection (2), the holder of a Residency and Employment Rights Certificate who is the spouse of a Caymanian or has obtained a Residency and Employment Rights Certificate as a result of his or her marriage to the holder of a Residency and Employment Rights Certificate under section 37(16) or any other earlier analogous provision, shall forfeit his or her rights under that Certificate if –
(a) the holder falls within any of the provisions of section 51;
(b) the holder’s spouse ceases to be a Caymanian or to be a Residency and Employment Rights Certificate holder;
(c) within ten years of the marriage, the marriage is dissolved or annulled;
(d) the holder ceases to be legally and ordinarily resident in the Islands; or
(e) the holder and his or her spouse are living apart –
(i) under a decree of a competent court;
(ii) under a deed of separation; or
(iii) in circumstances where, in the opinion of the Board or the Director of WORC, the marriage has irretrievably broken down.
It would appear that Section 40 (1), like Section 37 (3), leaves no discretion to the decision maker to consider Section 9 of the BOR. In circumstances where the spouse whose RERC is to be forfeited has lived in the Cayman Islands for greater than nine years thus, meaning the individual cannot obtain a work permit, the decision to revoke the RERC may very well lead to that individual leaving.
It would therefore appear likely that where the revocation of an RERC would lead to an individual’s removal from the Cayman Islands by operation of Law, given the fact that they will have no alternative permission, Section 9 of the BOR may very well be engaged and therefore should be considered.
When one adds the potential consideration that the person affected may be the victim of spousal abuse and there is no caveat to exempt those individuals, the Law could very well be challenged and be declared incompatible with the BOR.
Conclusion
The case of Ellington may very well prove to be as important as the cases of Razgar[1] and Huang[2] in the United Kingdom. The Grand Court has confirmed that Section 9 of the BOR is engaged in the consideration of RERC applications and therefore decision makers will have to now consider Section 9 and a failure to do so will likely lead to their decisions being overturned in the Courts.
It remains to be seen whether or not Ellington will have the same effect as Razgar and Huang did in the UK, as no doubt the Department of WORC and the Board will try and argue that the Ellington only applies to a small minority of cases. However, the decision in Ellington should not be minimised. For the first time the Grand Court has confirmed that Section 9 considerations apply to Immigration decisions and it is suspected that this will not be the last time that the Grand Court is required to rule on such matters. It appears likely that more and more decisions in the Cayman Islands will involve (indeed must involve) a two stage consideration along the lines set out in Razgar and Huang.
[1] R (Razgar) v Secretary of State for the Home Department [2004] UKHL 27
[2] Huang v Secretary of State for the Home Department [2007] UKHL 11
The HSM Group has promoted four Senior Associates to Partners across its Cayman Islands law firm.
Linda DaCosta, Sarah Allison and Kerrie Cox became Partners of HSM Chambers and Sophie Peat became a Partner of HSM IP.
Linda has been practicing in the Cayman Islands for over 20 years. She manages HSM’s property team and also has a wealth of experience in regulatory matters, employment law and contractual disputes.
Kerrie is a highly experienced advocate and litigator in employment, commercial, general civil and family law.
Sarah manages HSM’s Debt Solutions and Recovery department and is an integral member of their Insolvency team.
Sophie manages HSM’s Intellectual Property team and is well-versed on IP legislation across the Caribbean/Latin America. She also contributed to the committee responsible for drafting new IP legislation in the Cayman Islands.
“Our firm’s strength comes from our people. These promotions recognise their valuable contributions over the years and I look forward to continuing to grow our firm with them,” shares HSM Managing Partner, Huw Moses OBE. This move showcases their dedication to these practice areas and is testament to the firm’s ongoing commitment to the Cayman Islands.
An Analysis of Bennett v. Diaz (2020) (unreported, Cause No: 215 of 2015). HSM Senior Associate Kerrie Cox shares how the Cayman Islands’ Grand Court has settled a long-standing controversy which has plagued those injured in road traffic accidents over many years.
In short, by the enactment of Motor Vehicles Insurance (Third Party Risks) Law (1964) (Motor Insurance Law), the legislation established a stand-alone prescribed limitation period of 3 years for an injured party to bring a claim arising from a vehicle accident. This provision endured the 1991 Revision though to its present form in 2012, under s.17 (s.17).
Although this limitation period ultimately corresponded with s.13(4)(a) of the Limitation Law (originally enacted in 1991) for personal injuries (i.e. 3 years from the date of the accident), because claims resulting from a road traffic accident were deemed to be governed exclusively by the Motor Insurance Law, this had historically prohibited injured parties from seeking the court’s discretion to extend the period of limitation under s.39 of the Limitation Law.
In a detailed and far-reaching judgment consisting of 45 pages, Mr. Justice McMillan in Bennett v. Diaz (2020) (unreported) (Bennett) determined that the introduction of the Limitation Law impliedly repealed s.17. Consequently, going forward, the Limitation Law now governs personal injury claims arising from road traffic accidents.
Case Background
The background to the case is only relevant to the extent that the plaintiff failed to issue proceedings within 3 years from the date of a motor vehicle accident. Consequently, she sought the court’s discretion to extend the primary period of limitation under s.39 of the Limitation Law.
In response, the defendant admitted liability but pleaded the expiry of the limitation period set out in s.17, and predictably denied the applicability of ss. 13 and 39 of the Limitation law.
The central question before the court was whether the Limitation Law, when originally enacted in 1991, impliedly repealed s.17. If so, this would enable the Court to consider its jurisdiction to exercise a power under section 39 of the Limitation Law for those injured in a motor vehicle accident.
The Legal Framework and Historical Perspective
It is important to understand that before the introduction of the Motor Insurance Law in 1964, there was no limitation period for torts or other wrongful acts relevant to personal injury in the Cayman Islands. Therefore the 1964 legislation was a means to introduce some form of limitation of actions concerning those injured by the negligence of other road users.
The Motor Insurance Law was revised in 1991 (8th March) and although the first Limitation Law was enacted 4 months later in July 1991, the formal text of s.17 (unchanged from the 1964 legislation) remained in situ.
S.17 states as follows:
[17] “Notwithstanding anything contained in any other law or in any rule of law or equity, no action shall be brought in any court by or on behalf of any person after the end of the period of three years from the date on which a cause of action accrued for any injury or damage against or in respect of which a vehicle is required to be insured under this Law.”
Notably, the introduction to s.17 clearly expresses that its provisions, which includes the period of limitation, prevail over any other law, rule or equity (see also below, s.44 of the Limitation Law).
The Cayman Islands first introduced specific legislation concerning the limitation periods for claims by virtue of the Limitation Law 1991. Concerning personal injury matters, the following provisions under Part II apply:
13(1) This section applies to any action for negligence, nuisance or breach of duty……where the damages claimed by the Plaintiff ….include damages in respect of personal injuries….
(3) An action to which this section applies shall not be brought after the expiration of the period applicable with subsection (4) or (5).
(4) Except where subsection (5) applies, the period applicable is three years from-
(a) the date on which the cause of action accrued; or
(b) the date of knowledge (if later) of the person injured.
Part III of the Limitation law addresses discretionary exclusion of time limits:
39(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which –
(a) Section 13 or 16 prejudices the plaintiff or any person who he represents; and
(b) Any decision of the court under this subsection would prejudice the defendant or any person whom he represents,
the court may direct that those provisions shall not apply to the action, or shall not apply to any specified cause of action to which the action relates.
Accordingly, s.39 permits the court to exercise a broad equitable discretion to allow an action to proceed despite the limitation period prescribed by s.13.
Section 44 of Part IV provides a ‘savings’ provision as follows:
44(1) This Law does not apply to any action ………..for which a period of limitation is prescribed by or under any other Law………
Thus, the combination of S.17 and Section 44 of the Limitation Law resulted in the Grand Court previously considering itself bound to determine that in a personal injury claim arising from a motor vehicle, the Limitation Law did not apply.[1]
The Plaintiff’s Fresh Approach: Hansard and Application of Pepper v. Hart [1993] AC 583
Faced with the conventional course by the court in the application of s.17, the Plaintiff sought to argue that when the Limitation Law was introduced, it impliedly repealed the provision under s.17.
In order to progress this submission, the Plaintiff sought to cite references from Hansard during the original debates of the Limitation Law. However, this of itself proved to be a legal obstacle.
By s.11 of the Legislative Assembly (Immunities, Powers and Privileges) Law (2015 Revision) (Legislative Assembly Law), permission was required from the Speaker before any evidence could be adduced in court relating to debates or proceedings in the Legislative Assembly. Formal permission was refused[2] and as a consequence, the Plaintiff thereafter successfully applied for leave to bring judicial review proceedings.
The substantive hearing was contested and over the course of a two day hearing, the Attorney-General argued, inter alia, that s.26 of the Legislative Assembly Law excluded the jurisdiction of the court in respect of the permissive power. This was rejected by the Grand Court which ultimately declared that ss.11 and 26 were unconstitutional and of no effect.
Equipped now with the text of the material Hansard debate[3], the Plaintiff was required the leave of the court to admit the same into evidence, the purpose of which was to assist the court in the construction exercise concerning the context in which the Limitation Law was passed and the ‘mischief’ that the legislation was intended to address.
In summary, the general principles set out in Pepper v. Hart state that subject to any question of Parliamentary privilege (which, in effect, had been resolved within the judicial review proceedings), the rule excluding reference to Parliamentary material as an aid to statutory construction should be relaxed so as to permit such reference where:
- legislation was ambiguous or obscure or led to absurdity,
- the material relied upon consisted of one or more statements by a Minister or other promoter of the Bill together if necessary with such other Parliamentary material as was necessary to understand such statements and their effect, and
- the statements relied upon were clear.
Mr. Justice McMillan was therefore required to determine the nature of the material in giving his consideration as to whether it would be of ‘real help’ in resolving the case and in arriving at a properly informed decision. Although several passages were examined, it was clear that in introducing the Limitation Law 1991, the then Attorney General (as promoter) acknowledged that the legislation was largely drawn on the UK’s Limitation Act 1980 and he emphasised the intended application of Section 13 as follows:
“it deals with damages in respect of personal injuries that arise either because of negligence, nuisance, or breach of duty however arising. But the classic action for personal injury is the action for damages arising out of a motor car accident or a road traffic accident where the victim will be claiming against another party, the driver. I mention that as an example, just to bring home, in simple language, what we are talking about. But in fact, those sections apply to all forms of action, however they might arise in which personal injury is the essence of it.” [emphasis added]
The Judge concluded that it was beyond doubt what the people of the Cayman Islands were clearly and authoritatively told about the new Limitation Law, its purpose and intention. Furthermore, the Plaintiff had a basis to argue that the apparent inconsistent provisions of s.13 of the Limitation Law and s.17 led to an ‘absurdity’. Accordingly, supported by both history and context, the court determined that the conditions for permitting reference to Hansard were satisfied and the issues of construction in the case were of public importance.
Implied Repeal of s.17
There is a general presumption against implied repeal and therefore the burden of establishing the doctrine lies on the party asserting it. Implied repeal is described in Bennion as circumstances where the provisions of an Act are inconsistent with the provisions of an earlier Act, the earlier provisions may be impliedly repealed by the later. In West Ham Church Wardens v. Forth Mutual Building Society,[4] Mr. Justice Smith defined the test as:
“……whether there has been a repeal by implication by subsequent legislation is this: are the provisions of a later act so inconsistent with or repugnant to the provisions of an earlier act that the two cannot stand together.”
Later Lord Justice Laws in Thoburn v. Sunderland City Council stated:[5]
“The rule is that if Parliament has enacted successive statutes which on the true construction of each of them make irreducibly inconsistent provisions, the earlier statute is impliedly repealed by the later. The importance of the rule is, on the traditional view, that if it were otherwise the earlier Parliament might bind the later, and this would be repugnant to the principle of Parliamentary sovereignty.”
The Plaintiff argued that her case met all the criteria for when a statute is repealed by implication:
- The provision in the first statute (s.17) is taken away by the second (Limitation Law), especially in circumstances in which the Legislature is attempting to set out a comprehensive code.
- The two standing together would lead to absurd consequences; or
- The relevant provision of the earlier statute is plainly repugnant to the relevant part of the subsequent statute.
In the context that the Limitation Law was a ‘comprehensive reforming statute’ [6] and that the official record of the Legislative Assembly showed that it was intended to apply to the victims of traffic accidents, the court was persuaded that there was no rationale for distinguishing road traffic accidents.
In his findings, Mr. Justice McMillan had found the extracts from Hansard to be of very considerable value. Whilst acknowledging that it was not the role of the court to ‘legislate’, implied repeal arises to give effect to the legislative will, and to ensure that it is respected and followed as distinct from being undermined.
As regards the ‘savings’ provision contained in s.44 of the Limitation Law which addresses situations where a period of limitation has been prescribed by or is set out ‘under other law’, the Judge concluded that if there was an implied repeal of s.17, s.44 would cease to have any application.
Applying a purposive approach, the learned Judge concluded that the Limitation Law set out new and consistent periods of limitation in respect of legal proceedings of every description coming before the courts of the Cayman Islands. It followed, therefore, that whatever is inconsistent with that purpose is likely to be ‘repugnant’ in the legal sense of the word.
The court accepted unequivocally that the Limitation Law was intended to include and to cover personal injury arising out of a road traffic accident, including motor car accidents. As such, the introduction of the Limitation Law in 1991 impliedly repealed s.17.
Conclusion
The decision in Bennett has been broadly welcomed by personal injury attorneys representing Plaintiff parties. Under the restrictive provision of s.17, the court had no jurisdiction to extend time or exercise its discretion to disapply tortious time limits for those under a disability; those affected by fraud or mistake; those who discover the true nature of their injury outside of the 3 year period, or in any case in which a court considers it equitable.
With the implied repeal of s.17, traffic accident victims are no longer singled out to deprive them of rules of fairness and justice. Indeed they were expressly given, by the promoter of the Limitation Law Bill, as examples of whom the Limitation Law covered and protected. [7]
Footnotes
[1] Cole v NEM (West Indies) Insurance Limited [2009} CILR 367 and Wood v Thompson and Saxon MG Insurance Company Ltd., (Unreported, Cause No. 0229 of 2015)
[2] By letter dated October 16th 2017…”the Honourable Speaker is not prepared to subject the Hansard Reports to arguments or questioning in a court of law.”
[3] Hansard 19th June, 1991
[4] [1892] 1 QB 654 at page 658
[5] [2002] EWHC 1995 @ paragraph 37
[6] Collett JA in Cruz-Martinez v. Cupidon [1999] 1 CILR 177 @ page 180
[7] Paragraph 5 of the written submissions of Mr. Neil Timms QC, on behalf of the Plaintiff
Reported case in this area: Wilson v. Ebanks 2011 (1) CILR 447
With many Intellectual Property (IP) media sources citing a reduction in the number of IP filings since the start of the COVID-19 outbreak around the world, HSM IP is pleased to report that in May 2020 we saw a rise in trade mark and patent filings in the Caribbean and Latin America (this is based on the number of instructions received by our firm in May compared to an average month). Key business sectors making such filings include the pharmaceutical, technology and consumer goods sectors demonstrating that in these industries at least, innovation and new product launches are still thriving.
In the meantime, many Caribbean / LATAM Intellectual Property Offices / Registries (“IPOs”) have started to reopen for business, either on a full-time or part-time basis and, the majority of those still physically closed continue to offer new ways of working to ensure that the rights of brand owners and innovators are still protected throughout the global crisis. HSM IP continues to monitor the situation in each country to ensure that clients have the most up-to-date information about what is possible IP-wise.
Our team at HSM IP is available to help clients find the most practical solutions to the various issues posed. In this article, we provide you with a brief update on what you can expect now and in the coming weeks.
We are pleased to report that IPOs in the following countries have now either reopened entirely or are operating on a reduced-hours basis: Anguilla, Antigua and Barbuda, Barbados, Belize, Bermuda, the British Virgin Islands, Costa Rica, Curacao, Dominica, the Dominican Republic, Guatemala, Haiti, Jamaica, Nicaragua, Montserrat, Paraguay, Puerto Rico, St. Kitts, St. Lucia, St. Vincent, Suriname, Trinidad and Tobago, and Uruguay. Generally speaking, despite the fact that it is now largely “business as usual” in these countries from an IP-perspective, there is usually still some flexibility on deadlines before the respective IPOs given the ongoing crisis affecting businesses in the rest of the world.
IPOs which can process IP filings online include Argentina, Brazil, the Caribbean Netherlands (BES Islands), Chile, Colombia, Curacao, the Dominican Republic, Ecuador, Peru, Puerto Rico, St. Maarten and Uruguay.
Meanwhile, in the Bahamas, the Cayman Islands, Panama, and in the Turks and Caicos Islands, it is possible to submit new applications by email (although, in the Bahamas, the types of filings accepted are limited to new applications and renewals). Furthermore, in the Cayman Islands and in Turks and Caicos, IPO staff continue to process new applications remotely and IP gazettes continue to be published. However, to date no IP gazettes have been issued in the Bahamas in 2020. Furthermore, the last gazette was published in March 2019. Therefore, once things return to “normal” there is a real concern that publications will continue to be significantly delayed in the Bahamas. Also, in the Bahamas it typically takes two to three weeks after filing for the IPO to issue and provide the corresponding trade mark / patent number. However, as at 16 March 2020 (prior to the IPO closure further to the COVID-19 pandemic), the IPO had only issued application numbers for applications filed up to October 2019, so we expect further delays on this front too.
It is hoped that the currently closed IPOs in the following countries will reopen at some point in June 2020: Cuba, El Salvador, Guyana and Honduras. These IPOs are automatically extending key deadlines (e.g. renewal and office action deadlines) during the period of closure. Also, the Honduras IPO is accepting online filings during the period of closure for new applications and renewals only.
This article should be treated as a rough guide only as things are changing daily. HSM IP will continue to monitor developments in each country and is ready and able to provide tailored advice on specific queries as and when they arise. For further updates and information, please contact our Senior Associate, Sophie Peat at speat@hsmoffice.com.
The HSM Group has experienced an increase in interest for their restructuring and insolvency services, especially from businesses facing financial issues from the COVID-19 crisis. To help keep up with the demand and maintain exceptional service, HSM has reallocated its lawyers to assist in this area of the firm.
HSM’s restructuring and insolvency Cayman Islands practice now comprises of Ian Lambert, Partner and Head of Litigation, Insolvency and Restructuring; Adam Crane, Senior Associate; Peter de Vere, Head of Corporate and Commercial; Sarah Allison, Senior Associate of Debt Solutions and Shula Sbarro, Associate of Debt Solutions.
Managing Partner at HSM, Huw Moses, feels that this shift will allow the focus to be on assisting clients and businesses amidst the upheaval in normal business practices in the Cayman Islands. “It is not business as usual during COVID-19,” commented Huw. “As a full-service law firm HSM is flexible and able to meet the new needs in these challenging times.”
Ian adds, “Overcoming debt is difficult even in the best of times. In a crisis, our restructuring and insolvency lawyers create and execute coordinated solutions in a timely manner. Using a holistic approach, we draw on local and multidisciplinary skills to provide advice on all aspects of restructuring and insolvency, as well as employment, immigration and corporate issues.”
Through a comprehensive and precise analysis of the situation, HSM’s lawyers can provide sound recommendations across domestic and cross-border restructurings, guidance on the wind-down process while maximising returns to owners and if necessary, provide representation for clients in the courtroom.
To help further assist the local market in the Cayman Islands, HSM will host a free videoconference course with the Cayman Islands Chamber of Commerce on business failure liability in relation to COVID-19. This course will take place on Friday, 29 May 2020 from 9am to 11am. Participants must express interest to the Chamber at Programmes@CaymanChamber.ky and request a link to sign up to receive a Zoom invitation.
Key Contact
Ian Lambert
Partner
Head of Litigation, Restructuring and Insolvency
Tel: 1 345 815 7421
ilambert@hsmoffice.com
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