Capcar Enterprises Ltd v Westport Trust Company Ltd and Others

• Jurisdiction: Bermuda
• Judgment Date: 12 May 2016
• Neutral Citation: [2016] SC Bda 55 Civ
• Date: 12 May 2016
• Docket Number: CIVIL JURISDICTION 2011: No. 197
• Court: Supreme Court (Bermuda)

[2016] SC (Bda) 55 Civ

In The Supreme Court of Bermuda

CIVIL JURISDICTION 2011: No. 197

Between:-

Capcar Enterprises Ltd

Plaintiff

and

(1) Westport Trust Company Limited (as Trustee of the Laylash Trust)

(2) Lois Wilson

Defendants

(1) Onesimus Nzabalinda

(2) David Randolph Wilson (in both cases as Trustees of the Laylash Trust)

Respondents

EX TEMPORE RULING

1 The Plaintiff claims $45,900 in commission payments said to be due under a written contract between the Plaintiff and the Second Defendant which the Plaintiff claims the Second Defendant entered into both on her own behalf and on behalf of the First Defendant as Trustee of the Laylash Trust (‘the Trust’). The First Defendant denies that the Second Defendant entered into the contract on its behalf.

2 If at trial the Plaintiff succeeds against the First Defendant, then the First Defendant, who is no longer Trustee, would look to claim an indemnity against the trust fund. The applicable principles are set out inLewin on Trusts, Nineteenth Edition, at para 21–010:

‘Atrustee's right of indemnity affords protection to the trustee by entitling him to pay or reimburse himself out of trust property in respect of the personal liabilities which he incurs in the administration of the trust, but normally only where the liabilities are properly incurred. Thus there are two distinct relationships. The first is the relationship between the trustee and the third parties with whom he deals in the administration of the trust, or to whom he otherwise incurs liabilities. This will generate personal liabilities for the trustee, and so far as these personal liabilities are concerned, the terms of the trust will generally be of no direct importance. The second is the relationship between the trustee and the beneficiaries in connection with the liabilities incurred by virtue of the first relationship. The second relationship is concerned with the trustee's rights of indemnity, and depends upon the terms of the trust and the manner in which the trust has been administered by the trustee. Normally, there will be no direct dealings between third parties and the beneficiaries. The third party will claim against the trustee and the trustee will claim against the trust property in which the beneficiaries are beneficially interested.

3 The Plaintiff does not want to risk suing a ‘man of straw’. Before proceeding further with its claim against the First Defendant, therefore, thePlaintiff wishes to know if the trust fund has sufficient assets to meet the indemnity if called upon to do so. To this end the Plaintiff has issued a summons against the Respondents, who are the two current Trustees, pursuant to Order 38, rule 13 of the Rules of the Supreme Court 1985 (‘RSC’):

‘(1) At any stage in a cause of matter the Court may order any person to attend any proceeding in the cause or matter and produce any document, to be specified or described in that order, the production of which appears to the Court to be necessary for the purpose of that proceeding.

(2) No person shall be compelled by an order under paragraph (1) to produce any document at a proceeding in a cause of matter which he could not be compelled to produce at the trial of that cause...