Guernsey Legal Resources

    Under the Trusts (Guernsey) Law 1989, s.39(1)(a), a retiring trustee “may require that he be provided with reasonable security for liabilities . . . before surrendering the trust property.” When such a trustee makes an application for security for outstanding fees, the court has a duty, in assessing the quantum of security to be awarded, to balance the s.39 requirement against the need to avoid an order which would cause the respondent injustice. For example, the court would need to balance the legitimate concern of a retiring trustee company that its fees would not be paid by the respondent (the incoming trustee, who intended to move abroad and who might remove assets from Guernsey in the process) if an order for security were not granted, against the need not to choose a level of security so high that it would prevent the respondent from challenging the retiring trustees’ fees (Pearson v. Naydler, [1977] 1 W.L.R. 899, dicta of Megarry, V.-C. applied). The sole criterion for ordering security is what is just in the circumstances of a particular case (Leyvand v. Barasch, English Ch. D., The Times, March 23rd, 2000, dicta of Lightman, J. applied).