Paul Grant examines the significance of the Privy Council’s judgment in Perry v Lopag Trust Reg No 2, wherein the dismissal of the appeal reveals the court’s hesitance in challenging “concurrent findings of fact”, even when applied to the findings of foreign law.
A judgment from the Privy Council in Perry v Lopag Trust Reg No 2 (Cayman Islands)  UKPC 16 reveals further insight into the approach an appeal court is likely to take where there is a challenge to findings of foreign law.
It is trite that the Privy Council will decline to hear appeals which seek to challenge “concurrent findings of fact” – findings of fact from a lower court which have been affirmed by an appellate court – except in “exceptional circumstances”. As stated in the landmark case of Devi v Roy  AC 508, “…[t]here must be some miscarriage of justice or violation of some principle of law or procedure” for such appeals to be heard.
The Perry v Lopag judgment, as such, sets a precedent for deciding the extent to which that practice applies to the findings of foreign law, with the Privy Council designating these findings of foreign law as a “special category”. The court determined that, while the findings of foreign law are not categorised as law, appellate judges may examine and apply the relevant foreign laws in the same manner as the original trial judges.
In 2013, Israeli businessman Mr Perry transferred the single issued share in a Cayman Islands company to Lopag Trust Reg, a trust company based in Liechtenstein. Mr Perry’s widow and her elder daughter later challenged this transfer in the Cayman courts on two principal grounds: (i) that it was void or should be set aside as it breached Mrs Perry’s matrimonial rights under Israeli law (the “matrimonial claim”); and (ii) that it should be set aside for equitable mistake because Mr Perry would not have transferred the share had he known that discretionary beneficiaries did not have effective rights to enforce the trustees’ obligations under Liechtenstein law (the “mistake claim”).
Mrs Perry and her daughter argued that findings of foreign law should be treated differently, since judges can use their legal training and experience to analyse and reach their own conclusions in relation to foreign law, and, as such, there was no need for appeal courts to defer to the conclusions of the courts below.
The trial judge dismissed the claim in relation to both grounds and the Cayman Court of Appeal dismissed the appeal. The claimants then appealed to the Privy Council, who subsequently dismissed the appeal.
The Privy Council, as a starting point, confirmed that findings in relation to foreign law are findings of fact because a domestic judge “is not to be imputed to know foreign law”, and will typically rely on evidence provided by suitably qualified experts in the relevant foreign law. However, the Privy Council also affirmed that such findings of fact are a “special category”, as there is a “spectrum of circumstances” as to when and to what extent a domestic judge can rely on his own skill and experience to ascertain the foreign law and apply it to the case in question.
At one end of the spectrum are cases where the foreign law in question is a common law system analogous to domestic law, wherein the judges at first instance, in the appellate courts and/or the Privy Council must use their legal skills and experience to analyse the foreign law issue.
On the opposing end of the spectrum, in cases where the foreign legal system in question is not a common law system, the judge is likely to be heavily dependent on the evidence of the foreign law experts, with the judge’s own skills and experience playing a minimal role. In such cases, the Privy Council will refuse to hear appeals against concurrent findings when they lack exceptional circumstances. As the foreign law becomes less applicable to domestic law, it becomes increasingly more unlikely that an appeal court would intervene.
The Privy Council applied the “spectrum” approach to the Cayman courts’ findings in relation both to the matrimonial claim and the mistake claim, upholding its typical practice on concurrent findings of fact.
It held that the matrimonial claim concerning Israeli law lay at or very close to the end of the spectrum in which foreign findings of fact should be treated as concurrent findings of fact, as the initial judge was dependent on expert evidence from two Israeli law experts who were forensically cross-examined.
The Privy Council also upheld this practice in respect of the mistake claim, which was rejected after hearing two experts on Liechtenstein trust law, providing reasons for preferring the evidence of one expert over the other. As the lower courts had been satisfied that Liechtenstein law was sufficiently different both from Cayman law and English law, and that the experts had been widely cross-examined, the Privy Council agreed, and applied its typical practice in relation to concurrent findings of fact.
It thus remained whether Mrs Perry and her daughter had demonstrated the existence of exceptional circumstances for the appeal, as required for an appeal against concurrent findings of fact.
While the claimants argued that there were exceptional circumstances because the judge had made findings of fact for which there was no evidential basis whatsoever, thus erring in law, the Privy Council found, instead, that to meet the “high hurdle” set in Devi v Roy, the relevant finding of fact would have to be of such materiality to the decision in this case that it could not stand. As the claimants failed to prove this, the appeal was dismissed.
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28 November 2023
28 November 2023