Credit & Mercantile Plc v Kaymuu Ltd & Ors [2014] EWHC 1746 (Ch) (05 June 2014)

Credit & Mercantile Plc v Kaymuu Ltd & Ors [2014] EWHC 1746 (Ch) (05 June 2014)

Mr Wishart was not the beneficial owner of Dalhanna at the time C&M's charge was created. The arrangements and evidence did not establish a common intention constructive trust in his favour sufficient to override C&M's registered charge. C&M's charge had priority, and it was entitled to retain the sale proceeds to satisfy the secured debt. The surplus was to be distributed according to the respective entitlements of the trustee in bankruptcy and Mr Wishart, subject to further order.

Citation
[2014] EWHC 1746 (Ch)
Parties
Claimant: Credit & Mercantile PLC; First Defendant: Kaymuu Limited; Second Defendant: Kevin Michael Wishart; Third Defendant: Ian Mark Defty (as Trustee in Bankruptcy for Mr Sami Muduroglu)
Jurisdiction
England and Wales
Judgment Date
05 June 2014
Procedural Posture
Mortgagee's Action for Possession / Chancery Division Claim / High Court Trial Judgment
Outcome
Claimant (C&M) succeeds in retaining sale proceeds to satisfy its charge; surplus to be distributed as per further order.
Legal Topics
Beneficial Ownership, Overriding Interests, Mortgagee's Rights, Constructive Trust, Priority of Interests, Bankruptcy and Trustees, Possession Proceedings
Property Law Equity and Trusts Insolvency Banking and Finance Beneficial Ownership Overriding Interests Mortgagee's Rights Constructive Trust +3 more

Case Brief

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Parties

Credit & Mercantile PLC

Claimant

Kaymuu Limited

First Defendant

Kevin Michael Wishart

Second Defendant

Ian Mark Defty (as Trustee in Bankruptcy for Mr Sami Muduroglu)

Third Defendant

Procedural Posture

Mortgagee's Action for Possession / Chancery Division Claim / High Court Trial Judgment

Legal Issues

  1. 1 Whether Mr Wishart was the beneficial owner of Dalhanna
  2. 2 Whether Mr Wishart's beneficial interest overrode C&M's charge
  3. 3 Entitlement to proceeds of sale and surplus

Ratio Decidendi

Mr Wishart was not the beneficial owner of Dalhanna at the time C&M's charge was created. The arrangements and evidence did not establish a common intention constructive trust in his favour sufficient to override C&M's registered charge. C&M's charge had priority, and it was entitled to retain the sale proceeds to satisfy the secured debt. The surplus was to be distributed according to the respective entitlements of the trustee in bankruptcy and Mr Wishart, subject to further order.

Court Disposition

Claimant (C&M) succeeds in retaining sale proceeds to satisfy its charge; surplus to be distributed as per further order.

Orders

  • C&M entitled to retain £694,072.75 from net proceeds of sale of Dalhanna to realise its security.
  • Surplus of £328,158 paid into court to abide outcome; entitlement between Mr Wishart and trustee in bankruptcy to be determined.