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I agree, unless of course you subscribe to the view (as I do), that Re Diplock is generally a historical anomaly: see S. Whittaker, 'An Historical Perspective to the 'Special Equitable Action' in Re Diplock', (1983) 4 JLH 3; and also C. Harpum, 'The Basis of Equitable Liability' in P. Birks (ed), The Frontiers of Liability: Volume 1 (1994, Oxford), 9, 22ff.

I think that it is certainly true that the contributories will only have any hope of making a claim to the extent that they are permitted to do so on behalf of (and for) the company; the property rights otherwise are not co-terminous ...

Brad Strahorn

-----Original Message-----
From: Look Chan Ho
Sent: Friday, 7 July 2006 9:21 AM
Subject: Re: [RDG] Re Diplock with a twist

Apart from the Re Diplock route, it is hard to see why the contributories would have a direct claim against the payees. It would be hard for the contributories to establish that the payees were enriched at the contributories' expense. For the orthodox view is that assets of a company in liquidation are held in a statutory trust with the company’s beneficial interest being in suspense; neither the creditors nor anyone else have a proprietary beneficial interest in the liquidation trust fund.

The Re Diplock route should be feasible, though the contributories may need to exhaust their remedy against the liquidator first.

The contributories may also apply to court to direct the liquidator to take proceedings against the payees or to allow the contributories to use the company's name so that the contributories can enforce the company's right. The company may have a claim against the payees under Lipkin Gorman or knowing receipt.