Restitution Discussion Group Archives
| Sender: |
Lionel Smith |
| Date: |
Thu, 16 Aug 2001 10:56:39 -0400 |
| Re: |
Agnew v Commsrs of Inland Revenue (Brumarck Investments Ltd) |
Suppose an insolvency practitioner,
believing a bank's charge over receivables to be a fixed, rather than
a floating charge (on the basis of the now discredited New Bullas Trading
case [1994] 1 BCLC 485), pays the bank £1 million, when he should
have been paying the preferential creditors (some govt debts and employees)
first (under UK Insolvency Act 1986, s 40).
It seems to me that the prima facie
claim based on Kleinwort Benson v Lincoln City Council/mistake of law
is unanswerable. Any doubts about this? It seems defences would have
to do the work.
...
The question is currently preoccupying
accountants, insolvency practitioners and banks up and down the UK.
Another thing they might think about is who is a proper
plaintiff. The analogy of Re Diplock suggests a direct claim by preferential
creditors v bank. My own view is that this is misleading, the claim actually
belongs to the executor or the company which made the payment, and any
exercise by next-of-kin/creditors is effectively by way of personal subrogation.
This has implications in the case in which the bank might have some kind
of set-off.
Lionel
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