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Appleby Services (Bermuda) Ltd. (As Trustee Of The Bermuda Longtail Trust) -V- (1) Edward Karl Furtak (2) Jennie Louise Furtak (3) Colleen Nicole Furtak (4) Samantha Laureen Furtak (A Minor) (11 October 2014)

October 2014 Trusts

BERMUDA

SUPREME COURT

TRUSTS – SPECIFIC PERFORMANCE – LIEN OVER TRUST ASSETS – STATUS QUO – CONTROL OF BOOKS AND RECORDS – INDEMNITY

This matter has a long procedural history, however, this summons, issued by the Plaintiff Trustee sought specific performance of the first Defendant by way of an instruction to a Costa Rican law firm to release and deliver the legal books of Fairway Hasting (a Costa Rican corporation and asset of the Bermuda LongTail Trust) to the Plaintiff’s Costa Rican attorneys. At this juncture, all the Trustee was seeking to do was gain control of the books and records of the Costa Rican company for conservatory purposes.

It was uncontroversial that the Plaintiff Trustee was entitled to exercise a lien over Trust assets in respect of future liabilities. However, the first Defendant relied on various dicta to support its position that the lien attached only to assets in the Trustee’s control. The clearest authority cited was Wester -v- Borland [2007] EWHC 2484 (Ch), where Norris J stated at paragraph 10: “Nor is it controversial that the trustee has a right of lien over trust funds in his hands in support of that indemnity”. However, the Judge held, this argument unsustainable because, read in the light of other authorities, all that Norris J appears to have meant was the lien attaches to trust funds under the trustee’s control prior to a transfer.

 

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Appleby Services (Bermuda) Ltd. (As Trustee Of The Bermuda Longtail Trust) -V- (1) Edward Karl Furtak (2) Jennie Louise Furtak (3) Colleen Nicole Furtak (4) Samantha Laureen Furtak (A Minor) (11 October 2014)

 

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