London Capital & Finance Plc v Global Security Trustees Ltd [2020] EWHC 597 (Ch) (13 February 2020)

London Capital & Finance Plc v Global Security Trustees Ltd [2020] EWHC 597 (Ch) (13 February 2020)

GST should pay LCF's costs on the indemnity basis because GST unreasonably resisted removal as trustee, failed to address conflicts of interest, and acted in its own commercial interests rather than as fiduciary. GST is not entitled to indemnity for its own costs or liability to pay LCF's costs under the Security Trust Deed, as these were not reasonably and properly incurred and amounted to wilful misconduct.

Citation
[2020] EWHC 597 (Ch)
Parties
Claimant: London Capital & Finance Plc (in Administration); Defendant: Global Security Trustees Limited
Jurisdiction
England and Wales
Judgment Date
13 February 2020
Procedural Posture
Claim for Removal and Replacement of Trustee and Related Relief / Post Judgment, Consequential Issues and Costs
Outcome
Claimant's application for costs granted; costs to be paid by Defendant on indemnity basis; payment on account ordered; Defendant's claim for indemnity dismissed; other issues adjourned or left for further application.
Legal Topics
Removal of Trustee, Costs Orders, Trustee Indemnity, Appointment of Replacement Trustee
Trusts and Equity Civil Procedure Removal of Trustee Costs Orders Trustee Indemnity Appointment of Replacement Trustee

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Parties

London Capital & Finance Plc (in Administration)

Claimant

Global Security Trustees Limited

Defendant

Procedural Posture

Claim for Removal and Replacement of Trustee and Related Relief / Post Judgment, Consequential Issues and Costs

Legal Issues

  1. 1 Whether GST should pay LCF's costs and on what basis
  2. 2 Whether GST is entitled to indemnity for its costs and liability under the Security Trust Deed
  3. 3 Whether the Security Trust Deed needs to be assigned to the new trustee

Ratio Decidendi

GST should pay LCF's costs on the indemnity basis because GST unreasonably resisted removal as trustee, failed to address conflicts of interest, and acted in its own commercial interests rather than as fiduciary. GST is not entitled to indemnity for its own costs or liability to pay LCF's costs under the Security Trust Deed, as these were not reasonably and properly incurred and amounted to wilful misconduct.

Court Disposition

Claimant's application for costs granted; costs to be paid by Defendant on indemnity basis; payment on account ordered; Defendant's claim for indemnity dismissed; other issues adjourned or left for further application.

Orders

  • GST to pay LCF's costs of the claim on the indemnity basis, subject to detailed assessment.
  • GST to make a payment on account of £150,000 to LCF.