MACALLANS, SHEENA DIANE ADAM AND IAIN GRANT AGAINST W BURRELL HOMES Ltd [2015] ScotSC 48 (23 June 2015)

MACALLANS, SHEENA DIANE ADAM AND IAIN GRANT AGAINST W BURRELL HOMES Ltd [2015] ScotSC 48 (23 June 2015)

The action of multiplepoinding is competent because the pursuers, as neutral holders and trustees of the fund, are unable to obtain a discharge due to the deadlock between the company's directors, which constitutes competing claims or interests in the fund. The law affords greater latitude to neutral custodians in such circumstances, entitling them to seek judicial discharge through multiplepoinding.

Citation
[2015] ScotSC 48
Parties
Pursuers and Real Raisers: Macallans, Sheena Diane Adam and Iain Grant; First Defender: W Burrell Homes Limited; Second Defender: Brian Anthony McCardle; Third Defender: Dominic Martin Sweeney
Jurisdiction
Scotland
Judgment Date
23 June 2015
Procedural Posture
Multiplepoinding (commercial Action) / Judgment After Debate on Preliminary Pleas
Outcome
Action of multiplepoinding held competent; pleas for third defender repelled; pleas for pursuers sustained; pursuers ordered to consign fund; judicial discharge to be granted upon consignation; expenses to be paid out of fund; further procedure to be determined at case management conference.
Legal Topics
Multiplepoinding, Competency of Action, Trustee Discharge, Competing Claims to Funds, Directors' Deadlock
Civil Procedure Trusts and Trustees Company Law Multiplepoinding Competency of Action Trustee Discharge Competing Claims to Funds Directors' Deadlock

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Parties

Macallans, Sheena Diane Adam and Iain Grant

Pursuers and Real Raisers

W Burrell Homes Limited

First Defender

Brian Anthony McCardle

Second Defender

Dominic Martin Sweeney

Third Defender

Procedural Posture

Multiplepoinding (commercial Action) / Judgment After Debate on Preliminary Pleas

Legal Issues

  1. 1 Is the action of multiplepoinding competent where a solicitor holds funds for a company whose directors are deadlocked and cannot give joint instructions?
  2. 2 Does the existence of conflicting managerial claims by directors constitute 'double distress' or competing claims for multiplepoinding purposes?
  3. 3 Is the solicitor holding the funds as a trustee entitled to judicial discharge in these circumstances?

Ratio Decidendi

The action of multiplepoinding is competent because the pursuers, as neutral holders and trustees of the fund, are unable to obtain a discharge due to the deadlock between the company's directors, which constitutes competing claims or interests in the fund. The law affords greater latitude to neutral custodians in such circumstances, entitling them to seek judicial discharge through multiplepoinding.

Court Disposition

Action of multiplepoinding held competent; pleas for third defender repelled; pleas for pursuers sustained; pursuers ordered to consign fund; judicial discharge to be granted upon consignation; expenses to be paid out of fund; further procedure to be determined at case management conference.

Orders

  • Repels first and second pleas-in-law for second defender due to want of insistence.
  • Repels first, second, third, fourth and fifth pleas-in-law for third defender.