UBS Ag, London Branch v Glas Trust Corporation Ltd & Anor [2017] EWHC 1788 (Comm) (13 July 2017)

UBS Ag, London Branch v Glas Trust Corporation Ltd & Anor [2017] EWHC 1788 (Comm) (13 July 2017)

The Note Trustee cannot adopt and claim reimbursement of the AHG expenses en bloc as proposed, without independently scrutinising whether each expense is properly incurred under clause 25.4 of the Issuer Deed of Charge and clause 10.5 of the Note Trust Deed. The trustee must exercise independent judgment and cannot surrender its discretion to third parties. The Extraordinary Resolution of 31 March 2016 is invalid to the extent it purports to authorise such adoption without proper scrutiny.

Citation
[2017] EWHC 1788 (Comm)
Parties
Claimant: UBS AG, London Branch; First Defendant: GLAS Trust Corporation Limited; Second Defendant: Fairhold Securitisation Limited
Jurisdiction
England and Wales
Judgment Date
13 July 2017
Procedural Posture
Commercial Court Claim for Declaratory Relief / Judgment After Trial
Outcome
Declarations granted in favour of UBS; Note Trustee's proposed adoption of AHG expenses as originally formulated is not permitted.
Legal Topics
Securitisation, Trustee Powers and Duties, Priority of Payments, Interpretation of Trust and Transaction Documents, Indemnity of Trustees
Banking and Finance Trusts and Equity Commercial Law Securitisation Trustee Powers and Duties Priority of Payments Interpretation of Trust and Transaction Documents Indemnity of Trustees

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Parties

UBS AG, London Branch

Claimant

GLAS Trust Corporation Limited

First Defendant

Fairhold Securitisation Limited

Second Defendant

Procedural Posture

Commercial Court Claim for Declaratory Relief / Judgment After Trial

Legal Issues

  1. 1 Whether the Note Trustee is entitled to incur and claim reimbursement of the AHG expenses under clause 25.4 of the Issuer Deed of Charge and clause 10.5 of the Note Trust Deed
  2. 2 Whether the adoption of the AHG expenses by the Note Trustee was a proper exercise of its powers
  3. 3 Whether the Extraordinary Resolution of 31 March 2016 was valid and effective

Ratio Decidendi

The Note Trustee cannot adopt and claim reimbursement of the AHG expenses en bloc as proposed, without independently scrutinising whether each expense is properly incurred under clause 25.4 of the Issuer Deed of Charge and clause 10.5 of the Note Trust Deed. The trustee must exercise independent judgment and cannot surrender its discretion to third parties. The Extraordinary Resolution of 31 March 2016 is invalid to the extent it purports to authorise such adoption without proper scrutiny.

Court Disposition

Declarations granted in favour of UBS; Note Trustee's proposed adoption of AHG expenses as originally formulated is not permitted.

Orders

  • Parties to agree terms of order reflecting the court's preliminary views and requiring independent scrutiny by the Note Trustee of any AHG expenses before adoption.