Proportionality of trustee restraint in Alternative Investment Funds: punitive bar set aside after remedial action and no investor loss shown.

A six-month bar on taking up new assignments as a trustee of an Alternative Investment Fund was found disproportionate where the appellant had already taken remedial steps, including winding up the fund and repaying investors. No prejudice or loss to investors was shown, and the earlier stay had continued throughout. On those facts, the punitive restraint was considered excessive in light of the alleged negligence or inaction, and interference with the impugned order was treated as necessary to meet the ends of justice. The restraint was set aside and the bar on new trustee assignments was treated as having expired.

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Issues: Whether the six-month bar on taking up new assignments as a trustee of an Alternative Investment Fund was disproportionate and liable to be set aside.

Analysis: The appellant had taken remedial steps, including winding up the fund and repaying the investors, and no prejudice or loss to investors was shown. The earlier stay had continued throughout. In these circumstances, the punitive restraint was found to be excessive having regard to the nature of the alleged negligence or inaction, and the ends of justice were held to be met by interference with the impugned order.

Conclusion: The restraint was set aside and the appeal was allowed, with the bar on new trustee assignments treated as having expired.

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