UBS Ag, London Branch v Glas Trust Corporation Ltd & Anor

UBS Ag, London Branch v Glas Trust Corporation Ltd & Anor

The Note Trustee cannot adopt and pay the AHG expenses en bloc as proposed without independent scrutiny and determination that each expense is properly incurred under the trust and transaction documents. The prior approach of automatic adoption was a surrender of the trustee's duty and not legally sustainable. The Note Trustee must review expenses on a case-by-case basis for conformity with its powers and duties.

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 / Judgment After Trial
Outcome
Declaratory relief granted in favour of UBS; Note Trustee's prior approach to adoption of AHG expenses rejected.
Legal Topics
Trustee Expenses, Securitisation, Priority of Payments, Interpretation of Trust Deeds
Trust Law Banking and Finance Law Contract Law Trustee Expenses Securitisation Priority of Payments Interpretation of Trust Deeds

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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 / Judgment After Trial

Legal Issues

  1. 1 Whether the Note Trustee is entitled to incur and claim reimbursement of expenses incurred by an ad hoc group of Noteholders under the relevant trust and transaction documents
  2. 2 Whether the adoption of such expenses by the Note Trustee is consistent with its duties and the contractual provisions

Ratio Decidendi

The Note Trustee cannot adopt and pay the AHG expenses en bloc as proposed without independent scrutiny and determination that each expense is properly incurred under the trust and transaction documents. The prior approach of automatic adoption was a surrender of the trustee's duty and not legally sustainable. The Note Trustee must review expenses on a case-by-case basis for conformity with its powers and duties.

Court Disposition

Declaratory relief granted in favour of UBS; Note Trustee's prior approach to adoption of AHG expenses rejected.

Orders

  • The adoption by the Note Trustee of the AHG expenses cannot proceed as previously proposed.
  • The Note Trustee must independently scrutinise and determine on a case-by-case basis whether any AHG expenses are properly incurred before payment.