Bermuda: Privy Council Considers The Personal Liability Of Trustees

Investec Trust (Guernsey) Limited and another v Glenalla and others [23.04.2018]
Last Updated: 10 October 2018
Article by Matt Andrews, Mark Chudleigh and Alex Nurse
Most Read Contributor in Bermuda, September 2019

On 23 April 2018, judgment was handed down by the Privy Council in the long running dispute of Investec Trust (Guernsey) Limited and another v Glenalla and others. The judgment has a number of important implications in respect of trustees' limitations of liability, but also in aspects of private international law that reach beyond trustee law.


This litigation involved a trust called the Tchenguiz Discretionary Trust (the TDT) which was set up for the benefit of Robbie Tchenguiz and his family in 2007. The TDT was subject to the law of Jersey, but operated out of Guernsey.

A number of companies within the TDT claimed repayment of loans said to be owed to them by Investec Trust (Guernsey) Limited (ITG) and another company, as former trustees of the TDT. Kaupthing Bank had exercised rights of security over these companies when the financial crisis hit in 2008. It was the liquidators of those companies (Grant Thornton) who sought repayment of the loans from ITG as the party to the relevant loans.

Privy Council

The Privy Council was asked to consider whether the former trustees were personally liable for the loans, or whether Article 32 of the Trust (Jersey) Law 1984 protected them, and limited Grant Thornton's right of recourse to the TDT fund. The Privy Council considered the law that governed the discharge of the liabilities by the former trustees, with the majority noting:

The time has come to recognise that as a general rule the common law will recognise and give effect to limitations of liability which arise under an entity's constitutive law by reason of the particular status or capacity in which its members or officers assume an obligation.

The Privy Council held that the Jersey trust law limits a trustee's liability to a third party where that third party knows that they are contracting as a trustee, which was the case in this instance.

With regard to the trust assets, the Privy Council panel also held that Article 32 of the Trust (Jersey) Law 1984 does not create a direct right of access to the trust assets in respect of liabilities to third parties. A trustee is entitled to an indemnity out of trust assets and the creditor can "piggy back" on that right (subject to any limits imposed by the law or the relevant trust deed). However, if that trustee has acted in breach of trust, they may lose their right of indemnity, and as they will not be personally liable for the debts either, the relevant creditors may lose out.

Private international law

The panel also considered whether the Jersey Trust law would apply in Guernsey, where the former TDT trustees operated (the relevant loans were governed by either English or Guernsey law). This was a matter of private international law, and for a number of reasons, the panel concluded that Article 32 should apply. Amongst those reasons was the fact that the common law should recognise that issues around trustees' capacity and liabilities are to be governed by the law of the relevant trust.


It should also be noted that Guernsey has an equivalent provision providing protection for trustees of a Guernsey Trust, where they contract with a third party who knows they are acting as a trustee (Section 42 of the Trusts (Guernsey) Law, 2007). Section 42 provides that they have no personal lability in this instance.

Looking at another off shore jurisdiction, under Section 98 of the BVI Trustee Act 1961 (as amended), a Trustee will be personally liable in respect of a contract with a third party that was properly entered into, but only to the extent of the trust property, if the third party is aware of the fiduciary capacity in which they were acting.

The position set out above is contrasted with the UK, where liabilities incurred by a trustee of an English trust can be enforced against their personal assets. However, the trustee can still limit his liability by contract. The offshore jurisdictions of Bermuda and the Cayman Islands, like England, do not have any legislation that specifically limits the liability of trustees to third parties in certain situations.

As a consequence of the Investec judgment, if a party is contracting with an entity that was created subject to the law of another jurisdiction, it would be wise to consider seeking local advice on the effect of the law governing that entity's formation documents.

One further important point of note in the judgment of the Privy Council related to the ability to appeal from the Guernsey Court of Appeal. The panel held that under Section 16 of the Court of Appeal (Guernsey) Law 1961, a party can appeal to the Privy Council as a matter of right, where the value of the dispute is equal to or exceeds £500.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions