Mayer Brown represented the appellants in the long-running case of Zhang Hong Li & Ors v DBS Bank (Hong Kong) Ltd & Ors, which has been closely followed by the trust and private wealth industry around the world as it raises important issues relating to duties of trustees and the effect of “anti-Bartlett” clauses in trust instruments.
On 22 November 2019, the Hong Kong Court of Final Appeal (CFA) handed down its judgment notwithstanding a post-hearing settlement between the parties because of the general public importance of the issues involved. The CFA confirmed the effect of the anti-Bartlett clauses in the case and stated that had the case not been settled, it would have unanimously overturned the decisions of the Court of First Instance and the Court of Appeal, both of which found liability against the trustee and the corporate director of the trust's private investment company for breach of a “high level supervisory duty”, notwithstanding the existence of the otherwise effective anti-Bartlett clauses.
The CFA's decision came as a huge relief as anti-Bartlett clauses have long been regarded as an effective tool and widely used to limit duties of trustees. Certainty over their effect is highly important to all stakeholders in the trust world.