Bell v Birchall & Ors

Bell v Birchall & Ors

The court does not have jurisdiction to order deduction of the Trustee's costs from client monies in solicitors' client accounts because the obligation to manage those monies remains with the solicitor or, after intervention, the SRA, and the beneficiaries did not require the court's assistance to secure their rights. Even if jurisdiction existed, the court would not exercise its discretion to allow such deduction, as the costs should have been borne by the Trustee or as an expense of the bankruptcy, not by the clients.

Parties
Applicant/trustee in Bankruptcy: John Paul Bell; First Respondent (in Personal Capacity and as Executor of the Estates of Alan Alfred Ankers and Ernest Simpson Deceased): Anthony Warren Birchall; Second Respondent (as Executor of Philip Henshall Deceased): John Dominic Ryan; Third Respondent: The Law Society (Solicitors Regulation Authority)
Jurisdiction
England and Wales
Judgment Date
04 June 2015
Procedural Posture
Bankruptcy Application / Judgment on Application for Deduction of Trustee's Costs From Client Accounts
Outcome
Application dismissed
Legal Topics
Trustee's Costs, Solicitors' Client Accounts, Jurisdiction to Deduct Costs From Trust Property, Solicitors Regulation Authority Intervention
Bankruptcy Professional Regulation Trusts Trustee's Costs Solicitors' Client Accounts Jurisdiction to Deduct Costs From Trust Property Solicitors Regulation Authority Intervention

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Parties

John Paul Bell

Applicant/trustee in Bankruptcy

Anthony Warren Birchall

First Respondent (in Personal Capacity and as Executor of the Estates of Alan Alfred Ankers and Ernest Simpson Deceased)

John Dominic Ryan

Second Respondent (as Executor of Philip Henshall Deceased)

The Law Society (Solicitors Regulation Authority)

Third Respondent

Procedural Posture

Bankruptcy Application / Judgment on Application for Deduction of Trustee's Costs From Client Accounts

Legal Issues

  1. 1 Whether the Trustee in Bankruptcy can recover his costs and expenses from client monies held in solicitors' client accounts under the Berkeley Applegate Principle
  2. 2 Whether the court has jurisdiction to order such deduction
  3. 3 Whether, if jurisdiction exists, the court should exercise its discretion to allow such deduction

Ratio Decidendi

The court does not have jurisdiction to order deduction of the Trustee's costs from client monies in solicitors' client accounts because the obligation to manage those monies remains with the solicitor or, after intervention, the SRA, and the beneficiaries did not require the court's assistance to secure their rights. Even if jurisdiction existed, the court would not exercise its discretion to allow such deduction, as the costs should have been borne by the Trustee or as an expense of the bankruptcy, not by the clients.

Court Disposition

Application dismissed

Orders

  • The Trustee's application to deduct his costs and expenses from client monies in the client accounts is dismissed.