Deluxe Property Holdings Ltd v SCL Construction & Anor (Injunction Continuance)

Deluxe Property Holdings Ltd v SCL Construction & Anor (Injunction Continuance)

There is a serious issue to be tried as to whether the VAT repayment is held on trust for the claimant and whether SCL must pay over the sums by cash or cheque. Damages would not be an adequate remedy for the claimant due to SCL's weak financial position. The balance of convenience favours continuing the injunction to preserve the disputed funds and require ongoing disclosure pending final determination.

Parties
Claimant: Deluxe Property Holdings Limited; First Defendant: SCL Construction; Second Defendant: Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
21 October 2020
Procedural Posture
Injunction Application (part 8 Proceedings) / Return Date Hearing on Continuation of Interim Injunction
Outcome
Interim injunction continued pending final determination
Legal Topics
Constructive Trust, Quistclose Trust, VAT Overpayment, Injunctions, Adequacy of Damages, Balance of Convenience
Trusts Tax Law Construction Law Civil Procedure Constructive Trust Quistclose Trust VAT Overpayment Injunctions +2 more

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Parties

Deluxe Property Holdings Limited

Claimant

SCL Construction

First Defendant

Her Majesty’s Revenue and Customs

Second Defendant

Procedural Posture

Injunction Application (part 8 Proceedings) / Return Date Hearing on Continuation of Interim Injunction

Legal Issues

  1. 1 Whether sums repaid by HMRC to SCL are held on trust for Deluxe Property Holdings Limited
  2. 2 Whether SCL must pay over VAT rebate sums by cash or cheque or may issue a credit note
  3. 3 Whether the interim injunction should be continued pending final determination

Ratio Decidendi

There is a serious issue to be tried as to whether the VAT repayment is held on trust for the claimant and whether SCL must pay over the sums by cash or cheque. Damages would not be an adequate remedy for the claimant due to SCL's weak financial position. The balance of convenience favours continuing the injunction to preserve the disputed funds and require ongoing disclosure pending final determination.

Court Disposition

Interim injunction continued pending final determination

Orders

  • The injunction order of 7 October 2020 is continued, requiring SCL to pay to the claimant’s solicitors any monies received from HMRC in respect of the VAT claim and to provide further information regarding the VAT rebate and whereabouts of the funds.
  • Additional questions regarding the VAT rebate to be included in the order as indicated by the claimant’s counsel.