Investec Trust (Guernsey) Ltd et al v Glenalla Properties Ltd et al: Guernsey Court of Appeal holds trustee not personally liable
The Court of Appeal of Guernsey has overturned the decision of the Royal Court of Guernsey holding the Guernsey-based former trustees of a Jersey law trust personally liable to repay debts amounting to £183m plus interest.
The court has held that the former trustees are entitled to rely on the provisions of article 32 of the Trusts (Jersey) Law 1984 (TJL) to limit their personal liability, notwithstanding that the governing law of the obligations was not the law of Jersey.
The Court of Appeal could not find any direct guidance in the authorities or in authoritative writings regarding the status of a trustee (as a legal concept) under the domestic law of the trust in relation to contractual obligations undertaken by the trustee. However, the Court of Appeal considered that assistance could be drawn from what it considered to be a generally accepted rule of private international law regarding companies and partnerships whereby the law of the place of incorporation determines, among other things, the extent of an individual member’s liability for the debts and liabilities of a company and partnerships…
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ESMA has concluded that ‘no obstacles exist to the extension of the passport to Guernsey and Jersey’.