Restitution Discussion Group Archives
| Sender: |
Benedict White |
| Date: |
Tue, 11 May 2004 11:44:01 +0100 |
| Re: |
"At the expense of" – again |
On 11 May 2004 at 11:28, Andrew Tettenborn wrote:
Hi all:
A slightly rum decision on "at the
expense of" in the ChD: Re BHT
(UK) Ltd [2004] EWHC 201.
Natwest took a charge over the book-debts
of BHT, which duly went belly-up in 1992. The liquidator made distributions
ahead of the pref creds to Natwest on the assumption that the charge
was fixed. As a result of Brumark
[2001] 2 AC 710, it then appeared that the charge was probably a floater,
not a fixed charge. Could the liquidator recover the payments from Natwest
on the basis of mistake or some other form of UE? No, says the Dep Judge.
The defunct company, if it recovered, would have to hand over the sums
to the pref creds: it had therefore suffered no loss, and the enrichment
wasn't at its expense.
Can this be right? On the logic of
this decision, it seems to follow that if the only effective creditor
of a company is a pref cred, no liquidator could ever recover in UE
in respect of the company's funds wrongfully paid away. Or am I missing
something? It seems more than slightly rum to me, it seems to do
grave damage to the principle of preferential creditors.
The interesting question will be what can the preferential
creditors do about it. Clearly a mistake has been made which cost them
money.
Kind regards
Benedict White
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