fbpx

Instruction Sufficient to Allow Third Party Reliance on Arrangements

5th August 2019 By Arman Khosravi

The purchase of properties abroad is a process that can be replete with disputes and financial losses for the unwary or unadvised. Whilst some foreign countries have presented few issues, others have had more chequered histories.

Recently, investors went to court to recover their losses resulting from a failed holiday resort in Cabo Verde. The promoters of the failed scheme had instructed the UK bank they dealt with to open a ‘segregated client account’ to hold investors’ money. The account had restrictions on making withdrawals but did not specifically identify the investors whose money was held in it.

When the scheme foundered, those who lost their investments argued that they could rely on the promoters’ instructions and that the money in the account was effectively held on trust for them. The bank argued that the client account did not identify any investors, just a class of beneficiaries, and that the investors could not rely on a contract between the scheme promoters and the bank, because they were not a party to it.

Both of the bank’s arguments were dismissed by the Court of Appeal. The instruction to the bank to set up a segregated client account was sufficient for the clients of the promoters to be able to depend on it being ‘ring fenced’ from the promoters’ own funds and indebtedness.

Source: Concious

Latest News

Award That Requires Borrowing Made Into Court Order

17th May, 2024 By

Disagreements between separating couples all too often result in litigation that substantially reduces the assets available to them, as was illustrated by a case that recently reached the High Court. At issue was whether awards made by arbitrators in financial remedy proceedings can be made into court orders even if that would require one of the parties to borrow money. The couple had previously had a relationship lasting a few years before resuming their relationship in 2015. They had two children before separating again in 2019. Following their separation, the...

Inheritance Disputes – Costs Risks Can Be Reduced

15th May, 2024 By

Arguments about what someone promised before their death can lead to significant legal costs. However, if faced with a claim against the estate, there may be steps the beneficiaries or executors can take to reduce the risks, as a recent High Court case illustrated. A man had left a farmhouse and agricultural land in Cornwall to his wife, with whom he had also jointly owned a neighbouring area of land. After his death, one of the couple's daughters and her husband claimed that he had told them he wanted them...

Share Rounding Error Does Not Prevent CGT Relief

13th May, 2024 By

There are often very specific rules that must be complied with in order to claim tax reliefs, but if a small mistake arises, the courts may be able to provide assistance. In a recent case, the First-tier Tribunal (FTT) found that an investor was entitled to Entrepreneurs' Relief on the disposal of his shares in a company, despite owning one share fewer than he needed to qualify for it. The investor had agreed to purchase 5 per cent of the shares in the company for £500,000. He wished to own...

Wife Entitled to Maintenance Until Sale of Family Home

10th May, 2024 By

When divorcing couples disagree on how assets should be divided, the courts will seek to arrive at a fair outcome for both parties. In deciding how the proceeds of sale of a former couple's home should be apportioned, the Family Court agreed with the wife that she should receive maintenance payments until the sale took place. The couple had married in 2006. Following a brief separation, they had reconciled for two years before finally separating in 2022. The husband and wife both contended that they should be entitled to about...