Williams v Central Bank of Nigeria
On 19 February 2014, the Supreme Court gave judgment in the case of Williams v Central Bank of Nigeria. The issue in the case was whether s21(1)(a) of the UK Limitation Act 1980 disapplies the statutory limitation period in respect of claims by a beneficiary under a trust against an accessory (a knowing recipient of trust property or a dishonest assistant) to a fraudulent breach of trust.
In particular, the court looked at the issue of whether a stranger to a trust who dishonestly assists in a breach of trust, or knowingly receives trust property paid out in breach of trust, is a ‘trustee’ within the meaning of s21(1)(a).
Lord Sumption (with whom Lords Neuberger and Lord Hughes agreed) held that the act is concerned only with actions against ‘true’ trustees, and a stranger to a trust (although he may have dishonestly assisted the true trustee or knowingly received trust property) is not himself a ‘true’ trustee and, accordingly, a claim against him is not within the scope of s21(1)(a)…
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The Trusts (Special Provisions) Amendment Act 2014 provides certainty regarding how far settlors can go without calling the validity of the trust structure into question.
This memorandum has been prepared for the assistance of those who are considering registration of a foreign limited partnership in the Cayman Islands.