McLean & Anor v Trustees of the Bankruptcy Estate of Dent & Ors

McLean & Anor v Trustees of the Bankruptcy Estate of Dent & Ors

The doctrine of marshalling applies in favour of Lady Morrison, allowing her to claim the proceeds of assets subject to the Agricultural Charge. The trustees in bankruptcy are not entitled to claim in the administration of the Partnership by operation of subrogation, as there is no unjust enrichment and partners or their creditors cannot compete with joint creditors against the joint estate.

Parties
Claimant: Joseph Peter McLean; Claimant: Christopher John Petts; Defendant: Susan Berry; Defendant: Matthew Chadwick; Defendant: Lady Lynne Morrison
Jurisdiction
England and Wales
Judgment Date
26 October 2016
Procedural Posture
Application for Directions in Insolvency Administration / Judgment
Outcome
Lady Morrison may claim the proceeds of assets subject to the Agricultural Charge by marshalling and prove as unsecured creditor for any shortfall. Trustees in bankruptcy are not entitled to prove in the administration by subrogation.
Legal Topics
Marshalling, Subrogation, Priority of Creditors, Agricultural Charges, Unjust Enrichment
Insolvency Equity Partnership Law Marshalling Subrogation Priority of Creditors Agricultural Charges Unjust Enrichment

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Parties

Joseph Peter McLean

Claimant

Christopher John Petts

Claimant

Susan Berry

Defendant

Matthew Chadwick

Defendant

Lady Lynne Morrison

Defendant

Procedural Posture

Application for Directions in Insolvency Administration / Judgment

Legal Issues

  1. 1 Does the doctrine of marshalling apply in favour of Lady Morrison regarding the Agricultural Charge?
  2. 2 Are the trustees in bankruptcy of the Partners entitled to claim in the administration of the Partnership by operation of the doctrine of subrogation?

Ratio Decidendi

The doctrine of marshalling applies in favour of Lady Morrison, allowing her to claim the proceeds of assets subject to the Agricultural Charge. The trustees in bankruptcy are not entitled to claim in the administration of the Partnership by operation of subrogation, as there is no unjust enrichment and partners or their creditors cannot compete with joint creditors against the joint estate.

Court Disposition

Lady Morrison may claim the proceeds of assets subject to the Agricultural Charge by marshalling and prove as unsecured creditor for any shortfall. Trustees in bankruptcy are not entitled to prove in the administration by subrogation.

Orders

  • Lady Morrison is entitled to claim the proceeds of assets subject to the Agricultural Charge by marshalling.
  • Lady Morrison may prove as an unsecured creditor in the administration for any shortfall.