Power & Anor v HM Revenue and Customs & Anor [2009] EWHC 2580 (Ch) (23 October 2009)

Power & Anor v HM Revenue and Customs & Anor [2009] EWHC 2580 (Ch) (23 October 2009)

Only monies paid to agents (acting as agents for Farepak) on or after 11 October 2006 and credited to Farepak's accounts are held on trust for customers; earlier payments are not. The trust declaration should be rectified to cover the correct account. Distribution to customers is limited to verified categories, with...

Source-derived case information.

Citation
[2009] EWHC 2580 (Ch)
Parties
Applicant (joint Liquidator): Dermot Power; Applicant (joint Liquidator): Martha Hanora Thompson; Respondent (representative of Unsecured Creditors): H M Revenue and Customs; Respondent (representative of Customers): Suzy Hall
Jurisdiction
England and Wales
Judgment Date
23 October 2009
Procedural Posture
Insolvency Application (distribution of Trust Monies) / Final Order for Distribution Following Earlier Interlocutory Hearings
Outcome
Order granted as sought by Joint Liquidators, authorising distribution to specified categories of customers and a process for residual claimants.
Legal Topics
Constructive Trusts in Insolvency, Agency and Payment, Rectification of Trust Declarations, Distribution of Assets in Liquidation
Insolvency Law Trusts Law Company Law Constructive Trusts in Insolvency Agency and Payment Rectification of Trust Declarations Distribution of Assets in Liquidation

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Parties

Dermot Power

Applicant (joint Liquidator)

Martha Hanora Thompson

Applicant (joint Liquidator)

H M Revenue and Customs

Respondent (representative of Unsecured Creditors)

Suzy Hall

Respondent (representative of Customers)

Procedural Posture

Insolvency Application (distribution of Trust Monies) / Final Order for Distribution Following Earlier Interlocutory Hearings

Legal Issues

  1. 1 Whether monies paid into Farepak's bank accounts on or after 11 October 2006 were held on trust for customers or agents
  2. 2 Whether agents acted as agents for Farepak or for customers
  3. 3 Whether a constructive trust or Quistclose-type trust arose over customer monies

Ratio Decidendi

Only monies paid to agents (acting as agents for Farepak) on or after 11 October 2006 and credited to Farepak's accounts are held on trust for customers; earlier payments are not. The trust declaration should be rectified to cover the correct account. Distribution to customers is limited to verified categories, with a practical approach for residual claimants to avoid disproportionate costs and ensure fairness.

Court Disposition

Order granted as sought by Joint Liquidators, authorising distribution to specified categories of customers and a process for residual claimants.

Orders

  • Distribution to customers in Categories One, Two, Three, Four, Five, and Five A in full or pro rata as specified.
  • Residual Class to be contacted for evidence of payment date; those responding with qualifying dates to be paid, others not.