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QC defends Butterfield Trust in opera house funding dispute

Mark Cran QC defended the role of Butterfield Trust Bermuda Ltd (BTB) in pulling the plug on more than $100 million to fund the building of a performing arts centre in Lucerne, Switzerland, in the second day of proceedings in a case brought by Swiss arts foundations Rutli Stiftung and Stiftung Salle Modulable against the trust company.

The plaintiffs are arguing that BTB should release the funds to build the state-of-the-art opera house.

The case is being heard by presiding judge Chief Justice Ian Kawaley.

In addition to each side's phalanx of lawyers, observing in court yesterday were David Staples of Theatre Projects Consultants, former BTB managing director and Art 1 Trust trustee Graham Jack and Hubert Achermann of Stiftung Salle Modulable. Also observing yesterday morning was Robert Stewart, who had been a director of a foundation associated with the Art 1 Trust and whose evidence was presented by the plaintiffs on Tuesday.

Mr Cran of Attride-Stirling & Woloniecki — who according to his UK chambers was one of the most junior members of the bar to ‘take silk' and is considered a leading silk in commercial litigation — opened by reflecting on how small the world can seem to be. He compared Lucerne with Bermuda, explaining the city's population of about 58,000 was similar to Bermuda's population, and said that the arts world was also extremely small with a total of perhaps between 50 and 60 opera houses.

There would be a variety of types of ‘fog' in the material in this case, including the German language, said the QC. “It is a very fine language,” he said — but for non-German speakers, it is: “impenetrable”. Another difficulty in the case is that the German spoken “is not German as such, but Swiss German”.

“The second aspect of the fog is political speak,” he said. “A number of people involved are politicians,” and stated that what politicians say may play well to the public, “but it doesn't really amount to much”.

“The third area of fog is public relations speak.” He said Michael Haefliger, the artistic and executive director of the Lucerne Festival, who is one of the principal people involved in the opera house planning and in the case, is a “master of public relations”.

Mr Cran spent the morning going through minutes of meetings and correspondence to show that the opera house would cost more to construct than the amount of the gift from the Art 1 Trust had said they would give, and that the operational costs of the completed facility would be more than the funds available to support it. He also produced correspondence in court to show that once the Foundation responsible for planning the opera house became aware of the financing gaps, several alternative ways of financing both the construction and operational costs of the facility were explored, as well as consideration of options for the configurations of facilities for music, dance and drama at the proposed arts centre as well as the blends of performances that would be produced there.

Yesterday the QC also defended Christof Hamm, whose partner is Mr Engelhorn's daughter Vera. Alexander Layton QC had argued during the first day that Mr Hamm had played a central role in BTB's decision to stop funding. He told the court: “We say the defendant was influenced by Mr Christof Hamm to withdraw the funding.”

But Mr Cran said that it was Ms Engelhorn who had given instructions that Mr Hamm be included in all e-mails. And he added that it was Mr Hamm who had discovered a planning report that had been published on line in respect to the proposed opera house. “He found that it revealed in no less than seven different places it is made absolutely clear the city and canton will not increase the subsidy of 20 million (to pay for the operational costs.)” It also revealed the gap in operating costs, which Mr Cran described as ‘critical', adding they amounted to about $11.6 Swiss Francs.

Mr Cran said the viability of the project had been explored along with a variety of scenarios for financing both the gap in the construction costs and operating costs, but: “The 11.6 million deficit would be virtually impossible to bridge — it could only be bridged by making ... cuts in a quantity and quality of the productions,” he said.

Other issues confronting the project included a declining economy where increased public funding would be unpalatable to the electorate, the location of the opera house — one site would be visible from the composer Wagner's home — and developing concerns about the depth of commitment from the Art 1 Trust.

The case is expected to take six weeks.

Working the case: Pictured are lawyer Toby Graham, Queens Council Alexander Layton, Hubert Achermann, president of the Stiftung Salle Modulable, and lawyer Lilla Zuill. (Photo by Mark Tatem)

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Published November 14, 2013 at 8:00 am (Updated November 13, 2013 at 10:19 pm)

QC defends Butterfield Trust in opera house funding dispute

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