A warning to trustees: contracts and personal liability
In the Royal Court of Guernsey case Investec Trust (Guernsey) Ltd & Bayeux Trustees Ltd v Glenalla Properties Ltd and others [Civ 1462/2010], the court was asked to consider the circumstances in which trustees could be personally liable to repay loans obtained in their capacity as a trustee. The court specifically highlighted the importance of using express wording in agreements to ensure that the trustee’s liability is restricted to exactly what was intended.
Investec Trust (Guernsey) and Bayeux Trustees (the trustees) were the former trustees of TDT, a Jersey law trust. While they were trustees of the trust, the trustees entered into deeds of novation in order to assume liabilities for loans owing to four British Virgin Islands (BVI) companies, which were owned by the trust. These loans were not recorded in any formal written agreements. They were unsecured, interest free and repayable on demand. The loans were not intended to constitute corporate borrowing, but rather were intended as intergroup transfers.
The relevant issues arose when the BVI companies were put into liquidation and the companies’ liquidators sought repayment of the loans from the trustees…
Click on the link below to read the rest of the Wragge Lawrence Graham & Co briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Wragge Lawrence Graham & Co
News from The Lawyer
Briefings from Wragge Lawrence Graham & Co
HMRC can refuse to pay a refund of overpaid VAT to a supplier.
Wragge Lawrence Graham & Co’s finance litigation experts bring you the latest on the cases and issues affecting the lending industry.