Setchim & Anor v Secretary of State for Foreign & Commonwealth Affairs & Ors

Setchim & Anor v Secretary of State for Foreign & Commonwealth Affairs & Ors

The proceeds of sale of the Kensington Building are held absolutely by CIC and are not subject to statutory trusts or other interests; the cy-près jurisdiction need not be exercised as the assets can be transferred to CET under CIC's objects; there is no enforceable contractual right to compensation for associated entitlements; the unspent amount under the Severance Agreement must be repaid to the Secretary of State; title to the Collections passed to MECT free of restriction; and the liquidators need not pursue speculative claims arising out of the severance arrangements.

Parties
Applicant (liquidator): Richard Setchim; Applicant (liquidator): Ian Oakley Smith; Interested Party (respondent): Secretary of State for Foreign and Commonwealth Affairs; Interested Party: Attorney General; Interested Party: Charity Commission; Interested Party: Trustees of the Commonwealth Education Trust
Jurisdiction
England and Wales
Judgment Date
04 July 2014
Procedural Posture
Companies (insolvency) – Application for Directions / Judgment on Application for Directions by Liquidators Under Section 112 of the Insolvency Act 1986
Outcome
Application granted in part; directions and declarations made as indicated in the judgment.
Legal Topics
Liquidation of Charitable Company, Distribution of Surplus Assets, Cy Près Doctrine, Statutory Trusts and Repeal, Contractual Obligations in Severance, Transfer of Charitable Property
Insolvency Law Charity Law Company Law Liquidation of Charitable Company Distribution of Surplus Assets Cy Près Doctrine Statutory Trusts and Repeal Contractual Obligations in Severance +1 more

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Parties

Richard Setchim

Applicant (liquidator)

Ian Oakley Smith

Applicant (liquidator)

Secretary of State for Foreign and Commonwealth Affairs

Interested Party (respondent)

Attorney General

Interested Party

Charity Commission

Interested Party

Trustees of the Commonwealth Education Trust

Interested Party

Procedural Posture

Companies (insolvency) – Application for Directions / Judgment on Application for Directions by Liquidators Under Section 112 of the Insolvency Act 1986

Legal Issues

  1. 1 Whether the proceeds of sale of the Kensington Building are held absolutely by CIC or subject to special trusts under the 1925 Act
  2. 2 Whether a cy-près order is necessary for distribution to CET
  3. 3 Whether CIC has contractual rights to compensation for loss of associated entitlements

Ratio Decidendi

The proceeds of sale of the Kensington Building are held absolutely by CIC and are not subject to statutory trusts or other interests; the cy-près jurisdiction need not be exercised as the assets can be transferred to CET under CIC's objects; there is no enforceable contractual right to compensation for associated entitlements; the unspent amount under the Severance Agreement must be repaid to the Secretary of State; title to the Collections passed to MECT free of restriction; and the liquidators need not pursue speculative claims arising out of the severance arrangements.

Court Disposition

Application granted in part; directions and declarations made as indicated in the judgment.

Orders

  • Declaration that the proceeds of sale of the Kensington Building are held absolutely by CIC and not subject to statutory trusts under the 1925 Act.
  • No cy-près order necessary; assets may be transferred to CET under CIC's objects.