Quistclose trusts – what they are, when they arise and what

to do about them

Who we are

What we will cover

• What is a Quistclose trust?

• Case study A – no Quistclose trust exists

• Case study B – Quistclose trust exists

• Distinctions between the two

• Steps to take if you think a Quistclose trust may exist.

What is a Quistclose Trust?

“ A Quistclose Trust exists where party A lends money to Party B for a particular and clearly set out purpose.”

Quistclose Trust in practice

Case study A

• Personal experience/background• 3 categories:

– Instruction received but not processed– Instruction received and processed, money

left IOM but frozen in KSFUK– Instruction received and processed, money

left KSFUK but frozen by RBS

• Du Preez (Habana) v KSF & others• Why did it fail?

Case study B

• Barclays Banks Ltd v Quistclose Investments Ltd 1986

Distinctions between the two case studies

• No new monies

• No condition on deposit

So where might QT’s arise?

• Undertaking to use funds for property purchase – can’t use for disbursements.

• Transfer to third party with clear instructions of use.

Conclusion

• Come to us!

• Richard will now answer any questions you may have!

Richard Gore

richard.gore@gregglatchams.com

0117 906 9424

Polly Frost

Polly.frost@gregglatchams.com

0117 906 9452