An expanded core of trusteeship or non-derogable residual obligation? A critical evaluation of pro-beneficiary approaches towards anti-Bartlett clauses after Zhang Hong Li v DBS Bank [2019] HKCFA 45

Abstract

Abstract Anti-Bartlett clauses are commonly incorporated into trust deeds to enable settlors to freely exercise control and management over the trust company, while relieving trustees of any management or supervisory duties in that regard. These clauses are eminently sensible and should be given their literal effect insofar as they do not offend the irreducible core of trust duties. After the Hong Kong Court of Final Appeal reaffirmed this contractarian position in Zhang Hong Li v DBS Bank (Hong Kong) Ltd [2019] HKCFA 45, experts and scholars have recently revived efforts to narrow the scope of anti-Bartlett clauses for beneficiary protection. Their suggestions include the introduction of a non-derogable residual duty and/or an expanded core of trust duties to supervise the trust company’s affairs even in light of the anti-Bartlett clauses. This article submits that there is limited scope for these proposed developments, chiefly because the scope of these suggested duties are incompatible with other trust law concepts and defined without sufficient certainty.