In October 2022, the Privy Council finally handed down judgment in the Z Trust (II) appeals (ETJL v Halabi; ITGL v Fort Trustees [2022] UKPC 36). This decision concerns the under examined (and hitherto rather dull) topic of the nature and scope of the right of a trustee to recover liabilities and expenses from the trust assets.
Although both appeals concerned Jersey law, the decision will have significance throughout the common law world. This is an important decision for trustees and anyone dealing with a trustee hoping to be paid from trust funds. It has particular importance in circumstances where the trust fund is ‘insolvent’, ie, where the trust’s assets are insufficient to meet the amounts due for reimbursement under the trustees indemnity.
