THE JOINT BANKRUPTCY TRUSTEES OF GREGORY KING AGAINST HUGH KING [2020] ScotCS CSOH_101 (16 December 2020)

THE JOINT BANKRUPTCY TRUSTEES OF GREGORY KING AGAINST HUGH KING [2020] ScotCS CSOH_101 (16 December 2020)

The pursuers' case, based on gratuitous receipt of trust property, is sufficient to proceed to proof before answer. Gratuitous receipt is an alternative route to constructive trusteeship under Scots law, and the pursuers' averments of control by Mr King are sufficient to merit enquiry into fiduciary duty. It cannot be said at this stage that a constructive trustee is excluded from the definition of 'trustee' under Schedule 3(e) of the 1973 Act, so the claim may potentially be imprescriptible. The case raises complex factual and legal issues best resolved after proof.

Citation
[2020] ScotCS CSOH_101
Parties
Pursuer: The Joint Bankruptcy Trustees of Gregory Hugh Colin King; Defender: Hugh Colin Godfrey Stanley King
Jurisdiction
Scotland
Judgment Date
16 December 2020
Procedural Posture
Civil Trust/restitution / Interlocutory (debate on Pleadings)
Outcome
Proof before answer allowed with all averments and pleas standing.
Legal Topics
Constructive Trusts, Knowing Receipt, Gratuitous Receipt, Fiduciary Duty, Prescription (limitation of Actions), Tracing, Unjustified Enrichment
Trust Law Insolvency Law Restitution Property Law Constructive Trusts Knowing Receipt Gratuitous Receipt Fiduciary Duty +3 more

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Parties

The Joint Bankruptcy Trustees of Gregory Hugh Colin King

Pursuer

Hugh Colin Godfrey Stanley King

Defender

Procedural Posture

Civil Trust/restitution / Interlocutory (debate on Pleadings)

Legal Issues

  1. 1 Whether the defender holds shares in Randin S.A. and related assets as constructive trustee for the pursuers due to gratuitous receipt of funds misappropriated in breach of fiduciary duty.
  2. 2 Whether the pursuers' claim is barred by prescription under the Prescription and Limitation (Scotland) Act 1973.

Ratio Decidendi

The pursuers' case, based on gratuitous receipt of trust property, is sufficient to proceed to proof before answer. Gratuitous receipt is an alternative route to constructive trusteeship under Scots law, and the pursuers' averments of control by Mr King are sufficient to merit enquiry into fiduciary duty. It cannot be said at this stage that a constructive trustee is excluded from the definition of 'trustee' under Schedule 3(e) of the 1973 Act, so the claim may potentially be imprescriptible. The case raises complex factual and legal issues best resolved after proof.

Court Disposition

Proof before answer allowed with all averments and pleas standing.

Orders

  • Diet of proof before answer to be fixed.
  • All averments and pleas to stand.