Walton J restated the rule in In re James: ‘the rule provides that where it would be unfair for a trustee to take full advantage of his legal rights as such, the court will order him not to do so, and, indeed, will order him to return money which he may have collected.’ To attract the defense it must be shown that: (1) There must be some form of enrichment of the assets of the bankrupt by the person seeking to have the rule applied (citing Government of India v Taylor [1955] AC 491 per Lord Keith). (2) Except in the most unusual cases, the claimant must not be in a position to submit an ordinary proof of debt. The rule is not to be used merely to confer a preference on an otherwise unsecured creditor, but to provide relief for a person who would otherwise be without any. (3) In all the circumstances, it was not fair for an honest person to keep the money. (4) When the rule applies, it applies only to the extent necessary to nullify the enrichment of the estate.’
Walton J
[1975] 1 WLR 559, [1975] 1 All ER 453
England and Wales
Cited by:
Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Cited – Getliffe and Another, Re Lune Metal Products Ltd CA 14-Dec-2006
. .
Lists of cited by and citing cases may be incomplete.
Updated: 23 August 2021; Ref: scu.537956
