Money Markets International Stockbrokers Ltd. (in liquidation) (No. 2), Re [2000] IEHC 75; [2001] 2 IR 17 (20th October, 2000)

Money Markets International Stockbrokers Ltd. (in liquidation) (No. 2), Re [2000] IEHC 75; [2001] 2 IR 17 (20th October, 2000)

No trust, express or constructive, was created in favour of K and H over the client funds. The debit entry in individual client accounts did not constitute a declaration of trust, and MMI had no authority to create such a trust. The statutory regime requires actual payment for client money to cease being client money. No separate fund was created for K and H, and the requirements of the Central Bank preclude a halfway arrangement. K and H's claim must fail.

Citation
[2001] 2 IR 17
Parties
Claimant: K and H Options Limited; Respondent: MMI (in liquidation); Official Liquidator: Tom Kavanagh (Official Liquidator); Intervener: Central Bank; Objectors: Investors represented by Mr McQuillian
Jurisdiction
Ireland
Procedural Posture
Civil / Trial of Preliminary Issue
Outcome
claim dismissed
Legal Topics
Client Funds, Option Premia, Proprietary Claims, Constructive Trust, Stock Exchange Act 1995, Investor Compensation Act 1998
Trusts Insolvency Financial Regulation Client Funds Option Premia Proprietary Claims Constructive Trust Stock Exchange Act 1995 +1 more

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Parties

K and H Options Limited

Claimant

MMI (in liquidation)

Respondent

Tom Kavanagh (Official Liquidator)

Official Liquidator

Central Bank

Intervener

Investors represented by Mr McQuillian

Objectors

Procedural Posture

Civil / Trial of Preliminary Issue

Legal Issues

  1. 1 Whether K and H Options Limited is entitled to claim the sum of £321,620 against client funds of MMI for option premia in respect of settled stock exchange transactions
  2. 2 Whether a trust (express or constructive) was created in favour of K and H over client funds

Ratio Decidendi

No trust, express or constructive, was created in favour of K and H over the client funds. The debit entry in individual client accounts did not constitute a declaration of trust, and MMI had no authority to create such a trust. The statutory regime requires actual payment for client money to cease being client money. No separate fund was created for K and H, and the requirements of the Central Bank preclude a halfway arrangement. K and H's claim must fail.

Court Disposition

claim dismissed

Orders

  • K and H Options Limited is not entitled to claim the sum of £321,620 against client funds of MMI for option premia in respect of settled stock exchange transactions.