Deluxe Property Holdings Ltd v SCL Construction Ltd & Anor [2020] EWHC 3354 (TCC) (08 December 2020)

Deluxe Property Holdings Ltd v SCL Construction Ltd & Anor [2020] EWHC 3354 (TCC) (08 December 2020)

SCL holds the VAT refund and accounting credit on trust for Deluxe, either as a Quistclose or constructive trust, and must transfer the trust property to Deluxe; SCL cannot set off alleged debts against this proprietary claim.

Citation
[2020] EWHC 3354 (TCC)
Parties
Claimant: Deluxe Property Holdings Limited; First Defendant: SCL Construction Limited; Second Defendant: Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
08 December 2020
Procedural Posture
Part 8 Claim / Trial and Judgment
Outcome
Declaratory relief granted; trust to be wound up; SCL to transfer trust property to Deluxe; SCL liable for breach of trust.
Legal Topics
Quistclose Trust, VAT Refund, Constructive Trust, Breach of Trust, Set Off, Contracts (rights of Third Parties) Act 1999
Trusts Tax Law Equity Quistclose Trust VAT Refund Constructive Trust Breach of Trust Set Off +1 more

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Parties

Deluxe Property Holdings Limited

Claimant

SCL Construction Limited

First Defendant

Her Majesty's Revenue and Customs

Second Defendant

Procedural Posture

Part 8 Claim / Trial and Judgment

Legal Issues

  1. 1 Whether SCL holds the VAT refund on trust for Deluxe or only owes a debt
  2. 2 Whether a Quistclose or constructive trust arises over the VAT refund
  3. 3 Whether SCL can set off the refund against alleged debts owed by Deluxe

Ratio Decidendi

SCL holds the VAT refund and accounting credit on trust for Deluxe, either as a Quistclose or constructive trust, and must transfer the trust property to Deluxe; SCL cannot set off alleged debts against this proprietary claim.

Court Disposition

Declaratory relief granted; trust to be wound up; SCL to transfer trust property to Deluxe; SCL liable for breach of trust.

Orders

  • Declaration that SCL holds the VAT refund and accounting credit on trust for Deluxe.
  • Order that the trust be wound up and SCL transfer the balance of the trust property to Deluxe.