Manager overpaying himself liable as trustee (Glenea Contracts v Friel)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Dispute Resolution analysis: The High Court’s decision in Glenea Contracts Ltd v Philip Friel last month handed a boost to businesses seeking to recover money taken by their employees. After a three-day trial before Deputy Master Scher involving allegations of fraud and misuse of confidential information, the High Court held that a senior employee who had abused his access to the company’s bank account to overpay himself for almost a decade was liable to the company as a fiduciary and trustee. The victims of employee fraud gain significant additional protections from a finding of fiduciary and trustee status: the burden is on the employee to justify any payments made to them; no limitation period applies to the recovery of sums taken over many years; and the employer can trace the money taken into the assets it was spent on, such as mortgage repayments. Written by Max Marenbon, barrister at Serle Court.