Royal
Courts of Justice
Strand
London WC2A 2LL
Wednesday, 3rd December 2003
BEFORE:
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MR J SMALL (instructed by Hugh Cartwright & Amin) appeared on behalf
of the claimants
MR E JOHNSON (instructed by CMS Cameron McKenna) appeared on behalf of the defendants
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1. This is a claim by the trustees of the registered charity Bochasanwasi Shri Akshar Purushottam Swaminarayan, also known as the Swaminarayan Hindu Mission (to which I shall refer as "the charity") for an account of profits with regard to the use made by the London Borough of Brent (to which I shall refer as "the council") of the sum of £550,000 paid to the council by the trustees on 17 December 1992. Breach of trust by the council is admitted. The remaining issues relate to the quantification of the profits made by the council and the terms on which they should be discharged.
2. Although the issue may be relatively shortly stated, it is necessary to go into the background facts in some detail. On 25 April 1990 the then trustees of the charity bought a 6.5 acre site at Quainton Street, in Neasden, London NW10 on which to build its proposed new temple. Subsequently, the trustees changed their mind and decided to build the new temple on the same site as the old. Accordingly, they determined to dispose of the site in Quainton Street for residential development, for which they obtained planning permission conditional upon entering into a section 106 agreement with the council as the local planning authority. That agreement was concluded on 17 December 1992.
3. The relevant provision is contained in Clause 5.1, entitled "Highway Improvements Payment":
The Owner shall on the date hereof deposit with the council the sum of five hundred and fifty thousand pounds (£550,000) which the council covenants with the Owner shall be solely attributable to paying for highway improvements and/or traffic management measures necessary to improve access arrangements to/from the Site compromising alterations to the junction of Neasden Lane North and Quainton Street which the council shall use its reasonable endeavours to complete prior to the issue of the Certificate of Substantial Completion of the Highway Works and which in the opinion of the Engineer are necessary in the interests of highway safety and the free flow of traffic for improving the vehicular and pedestrian user for persons using the Site and for the general public as a result of the increased highway use caused by the Development.
5.2: The Council shall place the said sum in a designated interest bearing account with interest accruing to the fund and following satisfaction of the condition precedent contained in Clause 4.1 may draw down from the account in respect of expenses properly incurred pursuant to the Council's covenant of this sub-clause and any amount of the said sum and accrued interest remaining in the account upon completion of the Council's highway improvements and traffic management measures shall forthwith be released and repaid to the Mission (whether or not it shall then be the owner).
5.3: The Council shall upon the written request of the Mission at any time and from time to time, deliver to the Mission statements containing full details of the sums drawn down in the manner in which they have been expended.
4. On 17 December 1992 the trustees duly paid £550,000 to the council as required by clause 5.1. The council then paid it into an account with the Co-operative Bank plc, which was neither designated nor interest bearing. It is now accepted that the failure of the council to comply with the terms of clause 5 constituted a breach of trust on their part. Between 18 December 1992 and 21 March 2000, the council held that sum as part of its general funds and it was available for use in its money market operations (also described as its treasury management policy). The written and oral evidence shows that this policy involves the notional pooling of all the 200 or so accounts of the council so as to ascertain the overall financial position of the council as of any given day. A decision was then made, either to lend or to borrow on the money market in order to cover the balance, whether debit or credit. The pooling of the funds gave the council access to a lower rate of interest for borrowing and a higher rate for lending. The benefit of this rate differential (known as "the margin") accrued to the council on a daily basis, either for use for its own purposes or in augmentation of its funds.
5. On 3 January 1993 the trustees sold the land, with the benefit of the planning permission, to Fairclough Homes Limited. On 1 April 1993 the council moved its accounts from the Co-operative Bank plc to NatWest plc. On 7 January 1994 there was a telephone conversation between an officer of the council, Mr Rankmore, and a representative of the developer (ie Fairclough Homes Limited) from which it is plain that the trustees had asked for payment of the interest they believed to be accruing on the designated interest bearing account.
6. The council's officer added the following comment as recorded in his contemporary note:
Amish Patel of the Hindu Mission ... had previously requested that the council refund the interest on the deposit – this is not a requirement of the agreement until the end of the works (also the money has been placed in the current account of the Highways Client which is not interest bearing). RAS [ie Mr Sainsbury] is correcting the situation.
Mr Sainsbury, to which that note refers, was the principal client officer of the engineering services division of the council.
7. The matter came to the notice of Mr McLeod, who was then, I think the group accountant for the council. He recorded in a memorandum of the 7 February 1994 (page 15 of bundle C):
I confirm that the Council will lose the "margin" of the interest payable on the account compared with that which we have to borrow on the market. Therefore, when any monies need to be repaid the Centre will calculate any interest due (from 11 November) and transfer that into the account.
8. On 10 February 1994 the trustees of the charity wrote asking for a statement of account, including the amount of the accrued interest. Five days later, on 15 February 1994, Mr Sainsbury wrote to Mr McLeod insisting that the sum be transferred to an interest bearing account. It is clear that his insistence was not due to any concern for the charity, rather that the council -- in particular the engineering section -- would have to fund any cost overrun in respect of the works described in clause 5.1 of the section 106 agreement. He therefore wanted the deposit made by the trustees as a contribution to the cost, augmented so far as possible, by the interest which should have accrued in the designated account. On 4 March 1994 Mr Sainsbury replied to the charity. He said had asked for the details of "calculated interest accrued" and pointed out that clause 5 made no provision for the payment of interest to the charity before the conclusion of the highway works. He wrote again on the 28 April 1994 to inform the trustees that "up to 11 March 1994 interest of £24,723.70 was accrued on the amount received."
9. By September 1994 the residential development on the Quainton Road site had been completed. Shortly thereafter the certificate of substantial completion of the highway works was also issued. On 6 December 1994 Fairclough Homes Limited, the developer, wrote to the council complaining that, although the development and on-site road works had been completed, none of the off-site (for which the £550,000 had been paid) had even been started. On behalf of the trustees, he asked for the return of £550,000 together with the accrued interest. On 17 December 1997 there was an inter-office memorandum from Mr Sainsbury to Mr McLeod. Mr Sainsbury asked for the figure for interest accrued to see how much was available if the off-site works were carried out in the year 1998/1999. There seems to have been no contemporaneous answer to the demands for repayment made on behalf of the trustees.
10. Then, on 17 July 1998 the highways department of the council advised that accrued interest on this account to the end of March 1998 was £179,000. On 17 August 1999 (ie over a year later) the trustees, this time via their solicitors, again demanded the return of £550,000 with the interest earned to date. They received no proper response. On 25 January 2000 the trustees' solicitors again demanded confirmation that the deposit was in a separate deposit account and a full account of the interest earned.
11. The Substitutive response of the council came on 1 March 2000 and, so far as relevant, is in the following terms (page 74, bundle C):
I have taken legal advice on this matter and the answers to the points raised in your letter are as follows:
1. To date the monies have been held in a separate National Westminster current account. Interest has been calculated using National Westminster deposit account rates and after allowing for expenditure this produces a balance of £704,947.41 as of the 29th February 2000. It is our intention to transfer the updated balance into a National Westminster Business Reserve account in the next few days.
2. The statement of account is enclosed with this letter.
3. A copy of the National Westminster Business Reserve account interest rates is enclosed with this letter to enable your clients to check that the correct interest has been added.
4. The section 106 agreement relates to the planning permission is registered as a local land charge and is a public document. Furthermore it is not personal to your clients and binds successors in title to the land affected thereby. Therefore the Council cannot give an undertaking that it will not discuss its contents with any third party.
It is the intention of the Council to utilise the Highway Contribution together with interest accrued in accordance with clause 5.2 of the Agreement to implement one of the alternative schemes proposed for improving this junction. Due to the significant increase in accidents in this section of Neasden Lane the Council engaged a firm of consultants to carry out a route study in order to improve traffic and pedestrian safety in the area. Accident data suggests that Quainton Street junction is one of the worst in the area and it is our intention to implement a suitable scheme as soon as possible. The delay in proceeding with the scheme has been caused by difficulties in acquiring the necessary land.
On completion of the junction improvement works and traffic management measures, any remaining monies will be returned to your client in accordance with the agreement.
12. On 21 March 2000 the sum of £547,462.72 (being the amount of the original deposit of £550,000 less £2,537.28 paid for the works done allegedly in accordance with the agreement) was paid into an interest bearing NatWest business reserve account, number 95798331. In addition, the council paid into that account the sum of £158,649.02 by way of interest.
13. On 22 February 2001 the trustees commenced an action against the council (which has been called -- and I will refer to as -- "the traffic action") seeking the return of the £550,000 plus interest. It claims to be entitled to such a return on the grounds: first, the section 106 agreement has been rescinded; second, deductions have been made for the cost of the works which do not qualify under the terms of clause 5.1 of the agreement; and, third, that the delay in commencing the works constitutes a breach of contract and gives rise to a consequential liability of the council for damages and a breach of contract.
14. The works envisaged by clause 5.1 of the agreement did not in fact commence until March 2001. I understand that they have now been completed and the council claims that the proper costs thereof, deductible from the deposit and interest, will leave a balance of £37,000 due to the trustees. This is disputed. But it is clear that if the council is right a deposit of £550,000 alone is insufficient to cover the whole of the cost of those works.
15. In the course of the traffic action, during the usual processes of disclosure, the trustees learned for the first time, on 6 February 2002, of the designated account and the fact that it had not been opened until March 2000. Indeed, one of the more remarkable features of this case is the concealment by the council of the fact that the deposit had not been dealt with in accordance with clause 5 of the section 106 agreement. Repeated enquiries by, or on behalf of, the trustees were met with either no answer or partial and disingenuous responses.
16. On 1 March 2002 the trustees made an application in the traffic action for permission to amend in order to bring claims for breach of trust. That application was refused by Mr John Martin QC (sitting as a deputy judge in the Chancery Division). The consequence of that decision was that on 14 March 2002 the claim form in this action was issued seeking an account of profits, damages and interest for breach of contract and/or trust. Amended particulars of claim were served on 11 September 2002. The trustees claim that the actions of the council were in breach of contract or trust. That is now admitted. The relief sought is two-fold: namely, first, an account of profits and payment of sums is found to be due; and second, an order for restoration to the designated interest bearing account of the amount which, but for the council's breach of trust, it would have held, and in either case interest.
17. The council served their defence on 13 September 2002. In effect, the material allegations are admitted. In paragraph 10.3 they contend that the interest of £158,649, paid into the designated account on 21 March 2000, represented all the interest which would have been earned if the full amount of £550,000 had been put into a designated interest bearing account on 17 December 1992. The council admitted they had made an additional profit of £78,000-odd, but claimed that such profits had been spent on the day they were realised and were, in any event, not available to the trustees. It indicated that it was prepared to pay that sum to the trustees with simple interest, but contended that there should not be any wider account, nor should they be charged with any higher rate of interest.
18. On 20 November 2003 there was an exchange of correspondence between the solicitors for the council and those for the trustees. It had the effect of limiting the issues that I now have to decide. The effect of the letter was that the solicitors for the council agreed that the earnings from the use of the trustees' money came to £295,519.57, but £158,649 was the amount of interest which the deposit of £550,000 would have earned if dealt with as clause 5 required. That interest should be paid on the outstanding capital sum (whatever I might judge it to be) at what is described as the CLP rate, compounded daily.
19. They accordingly formulated the outstanding issue as being whether, on 21 May 2000, the council was liable to pay into the designated account opened on that day, either £295,519 or the balance of £136,870.55 (that is £295,000-odd less £158,000-odd). The letter in response from the trustees' solicitors effectively accepted that the interest element outstanding to the credit of the designated account would accrue to the benefit of the council, leaving them only with a claim to what was left of the £550,000 original deposit.
20. The defence of the council was supported by witness statements from Mr Chris Thompson, the principal treasury officer of the council; Mr Stephen Hughes, the principal finance officer of the council; and Mr Duncan McLeod, now the deputy director of the council to whom I have already referred. Each of them was cross-examined on his witness statement. It was clear from their evidence that their concern throughout was to maximise the return to the council through the inclusion of the £550,000 in the treasury management operations.
21. They only ensured that the £550,000 was placed to the credit of a designated interest bearing account when driven to do so by the demands of the trustees. They considered that so long as the council paid interest in due course, equal to what the initial deposit would have earned, that was sufficient to discharge the obligations of the council. They were wrong. They seek to excuse their conduct by a lack of legal advice. Whether, and if so what, legal advice was available to them, and why it was not sought, has not been explored in evidence. In any event, it is not relevant to any issue I have to decide. It is clear that the actions of the council and its dealings with the £550,000 deposited by the trustees were deliberate and designed by the council for its own benefit without any, or any sufficient, regard to the obligations of the council or the rights of the trustees.
22. Before referring to the submissions of the parties it is convenient to take stock of the admissions made by them. First, it is now common ground that the council is liable for breach of trust in not dealing with the sum of £ 550,000 deposited with the council by the trustees on 17 December 1992, as required by clause 5 of the section 106 agreement. Second, the amount of interest which such sum would have earned before 21 March 2000, if the council had complied with its obligations on 17 December 1992, is £158,649.02. Third, when the designated interest bearing account was opened by the council on 21 March 2000, the council transferred to its credit sums equal to the original deposit of £550,000 less deductions authorised by clause 5.1 and the notional interest of £158,649.02. Fourth, the profits made by the council, from the use of the deposit of £550,000 in the treasury management operations between 17 December 1992 and 21 March 200 is £295,519.57.
23. In those circumstances, the case for the trustees can be summarised as follows. They submit that the council committed a breach of trust in its dealing with the charities' money from 17 December 1992 to 21 March 2000, from which it derived profits of £295,519.53. The obligation of the council to account for such profits was not discharged by the transfer of the notional interest of £158,649 to the separate account with NatWest on 21 March 2000 because such transfer was unilateral and made without the consent or approval of the trustees and was an insufficient amount. Further, no such profit should be held subject to the provisions of the section 106 agreement because it is not interest accruing to that fund and to do so would perpetuate a conflict of interest or duty on behalf of the council. Further, they submit that it would not be right to allow the £158,649.02 to remain subject to the provisions of clause 5 because that would not constitute a proper accounting for the profits as the council remain interested under clause 5. In addition, it would confer a benefit on the council by increasing their security currently insufficient for the highway works. Moreover, it submitted, it would tend to influence the council into increasing the highway works so as to use up the increased deposit available. They suggest that to require the council to pay to the trustees the full amount of the profits would not lead to any unjust enrichment of the charity because that proposition is no ground for allowing the trustee to retain profits if improperly made. In any event, generosity in the calculation of interest, which the council claims to have shown, is irrelevant, even if true. In support of these arguments I was referred to well known passages in Regal (Hastings) Limited v. Gulliver [1967] 2 AC 134, page 143; Boardman v. Phipps [1967] 2 AC 46, page 123; Attorney General for Hong Kong v. Reid [1994] 1 AC 324; and Twinsectra v. Yardley [2002] 2 AC 164.
24. The case for the council, in summary, is as follows. The amount of the profit for which it is accountable is indeed the sum of £295,519. But deducting the notional interest credited to the interest bearing account with NatWest on 21 March 2001 (namely the balancing figure of £136,870) they submit that in assessing the profit to be disgorged, the court must have regard to the actual or net profit made, and to all the circumstances of the case. It is submitted that it is not the case of accounting for profits made from the use of the specific asset but by analogy with the use of a business. It points out that if the sums to be repaid do not come within the terms of clause 5, the charity may benefit from a double recovery --the potential for that double recovery is in fact recognised by the trustees in their letter of 20 November 2003. In support of these submissions, I was referred to Regal (Hastings) Ltd v. Gulliver, page 154; Goff & Jones, The Law of Restitution, 6th Edition, pages 711 to 713; Warman v. Dyer (1995) 128 ALR 201, page 210 to 211; and O'Sullivan v. Management Agency Limited [1985] 1 QB 428, page 458 E-H.
25. I turn now to my conclusions. In my view it is necessary at the outset to determine the nature of the trust which the council failed to observe. In Twinsectra v. Yardley [2002] 2 AC 164, a solicitor, a Mr Sims, received money from a lender, Twinsectra, on behalf of his client (although in fact the client of another solicitor -- but that does not matter) Mr Yardley against his undertaking. The undertaking he gave was that the money so borrowed would be used only in the purchase of property by his client; that the solicitor would release the money to the client from time to time for that purpose; and would repay the loan, with interest, in due course.
26. The nature of the arrangement was described by Lord Hoffmann (with whom Lords Slynn, Steyn and Hutton agreed) in paragraph 13 of his speech in the following terms:
In my opinion the effect of the undertaking was to provide that the money in the Sims client account should remain Twinsectra's money until such time as it was applied for the acquisition of property in accordance with the undertaking. For example, if Mr Yardley went bankrupt before the money had been so applied, it would not have formed part of his estate, as it would have done if Sims had held it in trust for him absolutely. The undertaking would have ensured that Twinsectra could get it back. It follows that Sims held the money in trust with Twinsectra, but subject to a power to apply it by way of loan to Mr Yardley in accordance with the undertaking. No doubt Sims also owed fiduciary obligations to Mr Yardley in respect of the exercise of the power, but we need not concern ourselves with those obligations because in fact the money was applied wholly for Mr Yardley's benefit.
27. Lord Millett considered that there was what has been described as a "Quistclose trust". At page 100 he said this:
I would reject all the alternative analyses which I found unconvincing for the reasons I have endeavoured to explain, and hold the Quistclose trust to be an entirely orthodox example of the kind of default trust known as a resulting trust. The lender pays the money to the borrower by way of loan, but he does not part with the entire beneficial interest in the money, and insofar as he does not it is held on a resulting trust for the lender from the outset. Contrary to the opinion of the Court of Appeal, it is the borrower who has a very limited use of the money, being obliged to apply for the stated purpose or return it. He has no beneficial interest in the money, which remains throughout in the lender subject only to the borrower's power or duty to apply the money in accordance with the lender's instructions. When the purpose fails, the money is returnable to the lender, not under some new trust in his favour which only comes into being on the failure of the purpose, but because the resulting trust in this favour is no longer subject to any power on the part of the borrower to make use of the money. Whether the borrower is obliged to apply the money for the stated purpose or merely at liberty to do so, and whether the lender can countermand the borrower's mandate while it is still capable of being carried out, must depend on the circumstances of the particular case.
28. Thus, in my judgment, it is clear that the council received the deposit in a fiduciary capacity. It was under a duty to place it to the credit of an interest bearing designated account. It had a limited power to apply it and the interest earned on it for its own benefit as a contribution to the costs of its highway works, as described in clause 5.1 of the agreement. Subject thereto, it held the deposit in trust for the trustees of the charity. The council had no beneficial interest in the deposit but was entitled to benefit from it in the proper exercise of its fiduciary power. Subject to that, the council held the deposit and the accrued interest in trust for the trustees of the charity. Such fiduciary capacity attracted all the obligations of a more conventional trustee. They are well known and have been described in differing terms in the cases to which I have referred.
29. It is sufficient for present purposes to refer to the speech of Lord Sankey in Regal (Hastings) Ltd v. Gulliver, page 144, where he said this:
The rule of equity which insists on those, who by use of a fiduciary position make a profit, being liable to account for that profit, in no way depends on fraud, or absence of bona fides; or upon such questions or considerations as whether the profit would or should otherwise have gone to the plaintiff, or whether the profiteer was under a duty to obtain the source of the profit for the plaintiff, or whether he took a risk or acted as he did for the benefit of the plaintiff, or whether the plaintiff has in fact been damaged or benefited by his action.
The liability arises from the mere fact of a profit having, in the stated circumstances, been made. The profiteer, however honest and well-intentioned, cannot escape the risk of being called upon to account.
But the obligation to account for the secret profits is an equitable remedy. The obligation extends to the actual or net profit. Thus, in Regal Hastings Limited v. Gulliver, page 154, Lord Wright referred to the obligation to account for "the net profit". In O'Sullivan v. Management Agencies Limited, page 458 E-H, Lord Justice Dunn referred to the need, in assessing the advantage gained, to look at the whole situation in the round. In the same case Lord Justice Fox referred to the need for the court to do what is practically just. In some cases this leads to an allowance of time and trouble, as in Boardman v. Phipps, in others to an allowance of a share of profit as in Warman v. Dyer. This case is not concerned with any such allowance to the council, nor, in my view, is this a case of accounting for a business rather than a specific item of property. As counsel for the council suggested, the issue is: how much profit should be repaid now, to whom and on what terms?
30. Both parties' contentions appear to me to fail to observe the logic of the principle they respectively espouse. Thus, the submission for the council would entail requiring the sum of £136,870 to be credited to the designated interest bearing account, there to be subject to the power of the council to use it for defraying the costs of the highway works. But to avoid the charge of continuing conflict of interest and duty, the council has agreed to pay the sum I find to be due direct to the trustees. By contrast, the submission of the trustees has led them to avoid the accusation of double recovery to concede the entitlement of the council to the interest element of the designated account, but to maintain their claim to that part of the balance as represents the original deposit of £550,000.
31. In my view, it is convenient to consider the position as of 20 March 2000 (ie the day before the designated account was opened). At that date there was no doubt that the council was obliged to replace the original deposit to the credit of the designated interest bearing account, and to restore to that account the interest which should have been received by the council, as trustee, had it performed its duty earlier. Thus, the credit of the notional interest to the designated interest bearing account on the 21 March discharged the duty of the council as trustee to that extent. The fact that the trustees did not know or agree to that action cannot disguise the fact that it took place. Similarly, I do not accept the contention of counsel for the trustees that the notional interest so credited was not "interest accruing to the fund or accrued interest" for the purposes of clause 5.2 in the section 106 agreement. It may have been notional in the sense that it had not accrued from day-to-day since the deposit was made on 17 December 1992, but it was real in that it was actually credited to the account on 21 March and, as agreed, is of the same amount as would have accrued by 21 March, but for the council's breach of trust. To that extent, it made good the consequences of the breach of trust and must be seen by this court in that light. But, as is also agreed, the restoration of the aggregate amounts credited to the designated interest bearing account on 21 March 2000 did not discharge the liability of the council to account for the profits made by its breach.
32. In the case of a conventional trust, with successive or concurrent interests, any one beneficiary may sue in respect of a breach of trust, but that beneficiary is not alone entitled to the fruits of the action. A reversioner cannot defeat the claim of a life tenant by insisting that the defaulting trustee pays the capital wrongly applied to him, free from the terms of the trust. Nor can one of two co-owners defeat the interest of the other by insisting that the mis-applied trust property is paid to him alone. The remedy of an account is the same. Whilst it does not exist to make good any deficiency in the trust fund, it is an accessory to the trust fund. It exists for the benefit of all those entitled under the trust. No one beneficiary may take the profits for himself, free from the terms of the trust.
33. Finally, it is necessary to consider the nature of the profit of £295,519 made by the council at the expense of the trustees from the use of the deposit of £550,000. It is clear that it comprise two elements. The first is the benefit to be derived from the retention of interest at the normal commercial rate; the second is the further benefit from the use the business of the council in the operation of its treasury management. By depositing the sum of the notional interest for the credit of the designated interest bearing account on 21 March 2000, the council necessarily reduced the profit for which it was accountable by the like amount.
34. It follows that I accept the submission for the council that the profit for which it remained accountable was the balance, namely £136,870. In my judgment, it is also clear that such continuing obligation was to account to the trust of which the council remained the trustee on the terms of clause 5. If the council is prepared to forego such rights as it would have had under clause 5 over the further sum of £136,87 by agreeing that it be paid to the trustees free from those rights, it is entitled to do so. But its actions in that respect do not have the consequence of entitling the trustees to insist that the earlier payment of £158,649 should have been similarly applied by payment to the trustees free from the rights of the council under clause 5. Nor, in my judgment, does such a consequence merit the comment that so to hold enables the council to profit from its own wrong. To the contrary, such benefit as the council may have obtained from the credit of the notional interest in a designated interest bearing account on 21 March 2000, derived, not from its own wrong, but from the terms of the section 106 agreement.
35. In my judgment, therefore, the council remains liable to account for the sum of £136,870 as representing the actual profits as at the date of this judgment. It is agreed that interest should accrue on that sum from 21 March 2000 to the date of payment, at the rate described in the correspondence between the parties' solicitors, dated 20 November 2003, as the CLP rate compounded daily.
36. In the case of a conventional trust, an order for an account of profits against an existing trustee would ordinarily be accompanied by other orders for the replacement of that trustee, or the imposition of other safeguards to safeguard the fund from further breaches of trust. This case does not allow for any such further orders. The highway works have been completed. The traffic action--in which the eligibility of those works for contribution from the deposit and accrued interest is to be determined -- is due to be heard in January 2004. The sums I now order to be paid will, by concession of the council, be paid to the trustees alone. There is no suggestion that the balance of the deposit and interest of £37,000 in the hands of the council needs any further protection.
37. For all these reasons I will order the council to pay to the trustees the sum of £136,870, with interest at the CLP rate (as so described) compounded daily from 21 March 2000 to the date of payment. The amount of this liability is the monetary consequence of the failure of the council to recognise and perform its fiduciary obligations to the trustees of the charity. The burden of satisfying the judgment will ultimately fall on the council taxpayers for the Borough of Brent. What, if any, further action should be taken is ultimately a matter for them rather than for me. I will hear further argument, if necessary, on the form of my order and on any issues as to costs.