In November 2019, the Hong Kong Court of Final Appeal upheld an anti-Bartlett clause in a trust deed and ruled that the trustee had no overriding duty to supervise the management of an underlying company.
Anti-Bartlett clauses were developed in response to the 1980 English High Court decision of Bartlett v Barclays Bank Trust Co. Ltd. The Court held that Barclays Bank Trust, which was the sole trustee of a trust whose sole asset was a controlling block of shares in a company, had a duty to supervise the management of the company. To address this, anti-Bartlett clauses have been included in trust deeds in certain common law jurisdictions to exclude the trustees' duty to enquire and supervise investments by the trust in an underlying holding company. Trust instruments in Canada do not typically include anti-Bartlett clauses.
Briefly, Ji Zhengrong ("Ji") and Zhang Hong Li ("Zhang") settled a Jersey-law governed trust (the "Trust") in 2005. DBS Bank (Hong Kong) ("DBS Bank") was the trustee at the relevant time. The sole trust asset was a share in a British Virgin Islands company called Wise Lords Limited ("Wise Lords"). DHK Management Limited ("DHK Management"), a company in the same group as DBS Bank, was the sole corporate director of Wise Lords at the relevant time. Ji was the investment advisor for Wise Lords and directed all of its investments. The settlors had executed a letter of wishes stating that the trustee should always consult with Ji regarding all matters and that her recommendations are final and should be followed.
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