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Dooneen Ltd (t/a McGinness Associates) and another (Respondents) v Mond (Appellant) (Scotland)
https://www.supremecourt.uk/cases/uksc-2016-0218.html
https://www.supremecourt.uk/cases/do...ss-summary.pdf
BACKGROUND TO THE APPEAL
In September 2006, Mr Davidson (the Second Respondent) entered into a trust deed for the benefit of his creditors. It was a “protected trust deed” to which provisions of the Bankruptcy (Scotland) Act 1985 (“1985 Act”) applied. Clause 11 of the deed provided for the deed’s termination on the occurrence of one of three events, one of which was a “final distribution” of the estate.
Before he entered into the deed, Mr Davidson had been mis-sold payment protection insurance (“PPI”), for which the bank agreed to pay him compensation of around £56,000 in April 2015. Dooneen Ltd (the First Respondent) was Mr Davidson’s agent for the purpose of making the claim and Mr Davidson had assigned 30% of any compensation received to Dooneen.
The dispute between the parties was about whether Mr Mond (the Appellant), as trustee, or the Respondents were entitled to the compensation. This turned on whether Mr Mond had made a “final distribution” when he distributed what he called a “first and final dividend” of 22.41 pence in the pound to the creditors in November 2010 and was discharged accordingly in circumstances where he did not know at the time that Mr Davidson had been mis-sold PPI in respect of which he was entitled to compensation.
The Lord Ordinary, Lord Jones, found in favour of the Respondents, and that decision was upheld by the Inner House. Mr Mond now appeals to the Supreme Court on the ground that the courts below had misinterpreted “final distribution”.
JUDGMENT
The Supreme Court unanimously dismisses the appeal with the result that Dooneen and Mr Davidson are entitled to the payment of compensation. Lord Reed, with whom the rest of the Court agrees, delivers the judgment.
See more on link
JUDGMENT on BAILII - https://www.bailii.org/uk/cases/UKSC/2018/54.html
NOTE there is quite a hefty postscript to the Judgment and future cases appear to have been pointed towards arguing 'mistake' of the trustee.
22. This is scarcely a satisfactory outcome. An asset which vested in the trustee for the benefit of the creditors and ought to have been applied to payment of the debts due to them, will instead be paid to the debtor, merely because the trust was administered in ignorance of its existence. One might question whether the law is powerless to provide a remedy in this situation.
https://www.supremecourt.uk/cases/uksc-2016-0218.html
https://www.supremecourt.uk/cases/do...ss-summary.pdf
BACKGROUND TO THE APPEAL
In September 2006, Mr Davidson (the Second Respondent) entered into a trust deed for the benefit of his creditors. It was a “protected trust deed” to which provisions of the Bankruptcy (Scotland) Act 1985 (“1985 Act”) applied. Clause 11 of the deed provided for the deed’s termination on the occurrence of one of three events, one of which was a “final distribution” of the estate.
Before he entered into the deed, Mr Davidson had been mis-sold payment protection insurance (“PPI”), for which the bank agreed to pay him compensation of around £56,000 in April 2015. Dooneen Ltd (the First Respondent) was Mr Davidson’s agent for the purpose of making the claim and Mr Davidson had assigned 30% of any compensation received to Dooneen.
The dispute between the parties was about whether Mr Mond (the Appellant), as trustee, or the Respondents were entitled to the compensation. This turned on whether Mr Mond had made a “final distribution” when he distributed what he called a “first and final dividend” of 22.41 pence in the pound to the creditors in November 2010 and was discharged accordingly in circumstances where he did not know at the time that Mr Davidson had been mis-sold PPI in respect of which he was entitled to compensation.
The Lord Ordinary, Lord Jones, found in favour of the Respondents, and that decision was upheld by the Inner House. Mr Mond now appeals to the Supreme Court on the ground that the courts below had misinterpreted “final distribution”.
JUDGMENT
The Supreme Court unanimously dismisses the appeal with the result that Dooneen and Mr Davidson are entitled to the payment of compensation. Lord Reed, with whom the rest of the Court agrees, delivers the judgment.
See more on link
https://www.supremecourt.uk/cases/docs/uksc-2016-0218-press-summary.pdf
JUDGMENT on BAILII - https://www.bailii.org/uk/cases/UKSC/2018/54.html
NOTE there is quite a hefty postscript to the Judgment and future cases appear to have been pointed towards arguing 'mistake' of the trustee.
22. This is scarcely a satisfactory outcome. An asset which vested in the trustee for the benefit of the creditors and ought to have been applied to payment of the debts due to them, will instead be paid to the debtor, merely because the trust was administered in ignorance of its existence. One might question whether the law is powerless to provide a remedy in this situation.
