Goldinger’s Trustee v Whitelaw and Son 1917 AD 66

Goldinger’s Trustee v Whitelaw and Son 1917 AD 66

Issue: Whether a trustee can be held liable for the debts of the trust estate if they incur the debts in the course of their administration of the trust.

Facts:

Goldinger was a trustee of a trust estate. Goldinger incurred debts in the course of his administration of the trust estate. Goldinger's trustee in insolvency sued Whitelaw and Son, a creditor of the trust estate, for damages, alleging that Whitelaw and Son had induced Goldinger to incur the debts by making false representations.

Key Facts:

• Goldinger was a trustee of a trust estate.
• Goldinger incurred debts in the course of his administration of the trust estate.
• Goldinger's trustee in insolvency sued Whitelaw and Son, a creditor of the trust estate, for damages, alleging that Whitelaw and Son had induced Goldinger to incur the debts by making false representations.

Court's Decision:

The Appellate Division of the Supreme Court of South Africa (AD) held that Whitelaw and Son were liable to Goldinger's trustee in insolvency for damages. The AD reasoned that a trustee is personally liable for debts incurred in the course of their administration of the trust estate, unless they have excluded their personal liability by express agreement.

The AD also reasoned that Whitelaw and Son had induced Goldinger to incur the debts by making false representations. The AD found that Whitelaw and Son were aware that Goldinger was acting in his capacity as a trustee and that they had taken advantage of Goldinger's position as a trustee to induce him to incur the debts.

Application of the Law to the Facts of the Case:

The AD applied the law to the facts of the case and found that Whitelaw and Son were liable to Goldinger's trustee in insolvency for damages. The AD ordered Whitelaw and Son to pay Goldinger's trustee in insolvency the amount of the debts that Goldinger had incurred.

Conclusion:

The AD's decision in Goldinger’s Trustee v Whitelaw and Son 1917 AD 66 is a significant case because it clarifies the law relating to the personal liability of trustees for debts incurred in the course of their administration of the trust estate. The decision emphasizes that a trustee is personally liable for debts incurred in the course of their administration of the trust estate, unless they have excluded their personal liability by express agreement.

The decision also provides guidance to trustees and creditors of trust estates on their rights and obligations. Trustees should be aware that they may be personally liable for debts incurred in the course of their administration of the trust estate. Creditors of trust estates should be aware that they may be able to recover damages from trustees if they induce the trustees to incur debts by making false representations.