Digital Equipment Company Ltd & Ors v Bower & Ors [2003] EWHC 2895 (Ch) (04 December 2003)

Digital Equipment Company Ltd & Ors v Bower & Ors [2003] EWHC 2895 (Ch) (04 December 2003)

The £60,000 in the Insolvency Services Account is not subject to a purpose trust in favour of Withers or the Inland Revenue and remains part of the company's assets. Costs orders made against the company in liquidation take priority over general expenses, and the court has no discretion under ss 112 and 156 of the Insolvency Act 1986 to alter this priority. The Applicants are entitled to payment of the £60,000 in priority to Withers' claim.

Citation
[2003] EWHC 2895 (Ch)
Parties
Claimant: Digital Equipment Company Limited; Claimant: Compaq Computer Holdings SRL; Claimant: Compaq Canada Corporation; Claimant: Compaq Computer Customer Support Centre GmbH; Claimant: Compaq Computer France SAS; Claimant: Compaq Computer B. V; Claimant: Compaq Computer (Schweiz) GmbH; Claimant: Compaq Computer Gholdings Limited; Claimant: Compaq Computer International B. V.; Defendant: Simon Peter Bower; Defendant: Michael John Hore; Defendant: Colin George Wiseman; Defendant: Withers (A Firm)
Jurisdiction
England and Wales
Judgment Date
04 December 2003
Procedural Posture
Chancery Division Application / Judgment on Application for Payment of Funds Held in Insolvency Services Account
Outcome
Application granted
Legal Topics
Priority of Costs in Liquidation, Purpose Trusts, Court Powers Under Insolvency Act, Distribution of Company Assets
Insolvency Civil Procedure Priority of Costs in Liquidation Purpose Trusts Court Powers Under Insolvency Act Distribution of Company Assets

Case Brief

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Parties

Digital Equipment Company Limited

Claimant

Compaq Computer Holdings SRL

Claimant

Compaq Canada Corporation

Claimant

Compaq Computer Customer Support Centre GmbH

Claimant

Compaq Computer France SAS

Claimant

Compaq Computer B. V

Claimant

Compaq Computer (Schweiz) GmbH

Claimant

Compaq Computer Gholdings Limited

Claimant

Compaq Computer International B. V.

Claimant

Simon Peter Bower

Defendant

Michael John Hore

Defendant

Colin George Wiseman

Defendant

Withers (A Firm)

Defendant

Procedural Posture

Chancery Division Application / Judgment on Application for Payment of Funds Held in Insolvency Services Account

Legal Issues

  1. 1 Whether £60,000 held in the Insolvency Services Account should be paid to the Applicants in priority to other claims
  2. 2 Whether the sum is subject to a purpose trust in favour of Withers or the Inland Revenue
  3. 3 Whether the court has discretion to alter the priority of payments under ss 112 and 156 of the Insolvency Act 1986

Ratio Decidendi

The £60,000 in the Insolvency Services Account is not subject to a purpose trust in favour of Withers or the Inland Revenue and remains part of the company's assets. Costs orders made against the company in liquidation take priority over general expenses, and the court has no discretion under ss 112 and 156 of the Insolvency Act 1986 to alter this priority. The Applicants are entitled to payment of the £60,000 in priority to Withers' claim.

Court Disposition

Application granted

Orders

  • £60,000 in the Insolvency Services Account to be paid to the Applicants in satisfaction of part of their costs.