Conquest v McGinnis & Anor

Conquest v McGinnis & Anor

The agreement between Mr McGinnis and the Company was incompatible with any intention that Mr McGinnis should become a secured creditor by subrogation; the £100,000 was a part-payment for shares and not a loan, and if the share sale did not proceed, the money would remain the property of the Company. Therefore, no right of subrogation arises.

Parties
Applicant: Andrew Conquest; Respondent: Patrick McGinnis; Respondent: Brian McGinnis
Jurisdiction
England and Wales
Judgment Date
11 December 2007
Procedural Posture
Application / Judgment
Outcome
Application granted. Declaration made.
Legal Topics
Subrogation, Beneficial Entitlement, Liquidation, Suretyship, Restitution
Insolvency Company Law Subrogation Beneficial Entitlement Liquidation Suretyship Restitution

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Parties

Andrew Conquest

Applicant

Patrick McGinnis

Respondent

Brian McGinnis

Respondent

Procedural Posture

Application / Judgment

Legal Issues

  1. 1 Whether the respondents are subrogated or otherwise beneficially entitled to surplus funds after realisation of a fixed charge
  2. 2 Whether a right of subrogation arises in favour of Mr Brian McGinnis

Ratio Decidendi

The agreement between Mr McGinnis and the Company was incompatible with any intention that Mr McGinnis should become a secured creditor by subrogation; the £100,000 was a part-payment for shares and not a loan, and if the share sale did not proceed, the money would remain the property of the Company. Therefore, no right of subrogation arises.

Court Disposition

Application granted. Declaration made.

Orders

  • Neither respondent has any beneficial entitlement to the surplus funds in the hands of the liquidator, whether by subrogation or otherwise.