Jamaica's Supreme Court has struck out a claim by executors of the late hotel mogul Gordon "Butch" Stewart's estate that sought a "red flag" audit of several companies, ruling the executors lacked the legal standing to bring the case. According to Antigua News Room, the decision delivers a significant victory to Sandals Hotels boss Adam Stewart in a long-running family dispute over his father's estate.
Justice Cresencia Brown Beckford announced the ruling orally on March 26, with the written decision released Wednesday. The judgment blocks an attempt by the executors to carry out a red-flag audit of Gorstew Limited, Appliance Traders Limited, and their subsidiaries.
In 2024, the executors had sought court authorisation for the urgent audit, citing serious concerns about how the companies had been managed since Butch Stewart's death on January 4, 2021. The executors — Trevor Patterson, Cheryl Hamersmith-Stewart, Elizabeth "Betty Joe" Desnoes, and Martin Veira — include Hamersmith-Stewart, who is Butch's common-law widow.
Adam Stewart applied to have the case struck out, arguing it was an abuse of process and that the executors lacked authority under the Trusts Act to bring the claim. In a 24-page opinion, Justice Brown Beckford agreed, ruling that the executors were acting in their capacity as executors, not as trustees, and that the Trusts Act does not govern executorial functions.
"In view of this finding, the executors in seeking to carry out this red flag audit are acting [as] executors and not trustees of the will of the Founder," Justice Brown Beckford wrote. "In that event, they do not have standing under the Trusts Act to bring this claim."
The judge further noted that executor duties and trustee duties, while they may overlap, "are not, in law, synonymous." She also found that executors "do not automatically become trustees of the will despite the will naming them as 'Executors and Trustees,'" adding that such terminology in Butch Stewart's will was used "for convenience only."
The court examined the relevant clause of the will governing the ATL Group, which includes Gorstew Limited and Appliance Traders Limited, and found that those shares were not placed in trust.
The court also considered a proposal to appoint US-based accounting firm Alvarez and Marsal to conduct the audit. Adam Stewart's legal team had argued the appointment would breach the Public Accountancy Act — an argument the judge found "not without merit" in principle. However, it ultimately failed because the application before the court sought authorisation to conduct an audit, not to appoint a specific firm.
The executors were ordered to pay Adam Stewart's legal costs and were granted permission to appeal.
The ruling is seen as a significant win for Adam Stewart and his siblings, Brian Jardim and Jaime Stewart, in the ongoing dispute over the administration of their father's estate.
Adam Stewart was represented by Walter Scott KC, Ian Wilkinson KC, and attorneys Conrad George, Anna Gracie, André Sheckleford, and Gabrielle Chin. The executors were led by Michael Hylton KC and Kevin Powell KC, along with attorney Timera Mason. John Graham KC and attorney Peta-Gaye Manderson appeared on behalf of Gorstew Limited.
