The applicant company obtained an injunction against another company. That freezing injunction was discharged upon the payment of a sum into the names of the respective parties’ solicitors. The company went into liquidation, and the claimant disputed ownership of the sum with the provisional liquidators.
Held: The deposit of the sum was insufficient to create a charge giving any priority for the claimant over the liquidators. An equitable charge could be created only if there had been not only a restriction on any disposal, but also an obligation to pay the debt out of the fund. The consent order under which the freezing order had been discharged could not be construed to create such an obligation.
Judges:
Lord Justice Laws, Lord Justice Ward, Lord Justice Jonathon Parker
Citations:
Times 13-Feb-2003, [2003] EWCA Civ 63, Gazette 03-Apr-2003, [2003] 1 WLR 1200, [2003] 3 All ER 1200
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Appeal from – Flightline Ltd v Edwards and Another ChD 2-Aug-2002
Money had been paid into an account in the joint names of the parties’ solicitors in order to purchase the release of the applicants from an asset freezing order. The respondent company was in liquidation. It was argued that the payment of funds . .
Cited – Palmer v Carey PC 1926
A lender financed a trader in goods, on the basis the proceeds of sale of the goods be paid into an account in the name of the lender, and that the lender recoup himself on a monthly basis in respect of sums advanced, with the balance being released . .
Cited – Swiss Bank Corporation v Lloyds Bank Ltd CA 1981
An equitable charge is created when property is expressly or constructively made liable to the discharge of a debt or some other obligation, and the charge confers on the chargee a right of realisation by judicial process such as a sale order. . .
Cited by:
Appealed to – Flightline Ltd v Edwards and Another ChD 2-Aug-2002
Money had been paid into an account in the joint names of the parties’ solicitors in order to purchase the release of the applicants from an asset freezing order. The respondent company was in liquidation. It was argued that the payment of funds . .
Cited – Kastner v Jason, Sherman, Sherman and Sherman, Sherman and Kastner ChD 23-Mar-2004
The parties had a dispute arbitrated by the Beth Din, who ordered the sale of a property. In apparent breach of that order the owner purported to sell the property. The claimant had registered a caution which the defendants now sought to be vacated. . .
Cited – Ernst Kastner v Marc Jason, Davis Sherman, Brigitte Sherman CA 2-Dec-2004
The parties had agreed that their dispute should be resolved before the Jewish Beth Din according to Jewish substantive and procedural law. K was granted an interim freezing order. The defendant sold the asset, and K sought to assert a charge.
Cited – Withers Llp v Rybak and Others ChD 9-May-2011
The claimant solicitors sought a declaration as to whether they had a right to assert a solicitor’s common law lien over sums in its client account. The defendant clients had asserted a security interest in the money and had assigned that interest, . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 07 June 2022; Ref: scu.179016