Mahme Trust v Tayeb (2002)


The payment of money to the chairman of a trust's managment committee was not authorised under Liechtenstein law.


(1) The payments to T had been authorised by the terms of an instruction to that effect to the Trust's bank signed by T. The claimants had failed to establish on the balance of probabilities that that instruction had been procured by a fraudulent misrepresentation by T. The supposed explanation for the payments attributed to him by the claimants was simply improbable. (2) However, Liechtenstein law required T's remuneration to be authorised by the trustees. They had not signed the instruction to the bank, from which it followed that the payments to T were not authorised by the trust. (3) In the circumstances T was liable to repay the amount claimed to the Trust.

Judgment for the claimants.


Action by the claimant, a Liechtenstein trust ('the Trust'), and one of its beneficiaries ('M') to recover from the first defendant ('T') just over $1 million paid out to him by way of remuneration for his services as chairman of the Trust's managing committee, which money was paid to the third defendant ('Landglaze'). The claimants' primary case was that they were entitled to recovery of the payments because they had not been authorised by the two trustees of the Trust. They contended in the alternative that, if the Trust had authorised or ratified the payments, they had been procured by a fraudulent representation made by T that the purpose for which the payments were required was not as remuneration for himself but as the payment of an administration fee to the Trust's bank.