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 into the joint account made the claimant a secured creditor. The liquidators argued that the defendant was not a secured creditor since no proprietary interest in the fund has been created.
Held: The payment of funds into court did create a security. The payment into a bank account in the joint names of the solicitors was intended to create the same result. It could not be dealt with without an order of the court, and it was intended to secure a particular result in the litigation, and the money was paid into an escrow account, the effect of which was that it would inevitable be paid out on the happening of certain events.
Mr Justice Neuberger
Times 23-Aug-2002, Gazette 10-Oct-2002, [2002] 1 WLR 2535
Insolvency Act 1986 130
England and Wales
Citing:
Cited – Cretanor Maritime Co Ltd v Irish Marine Management Ltd CA 1978
A freezing order is relief in personam and creates no proprietary rights in the assets from time to time subject to it. Buckley LJ said that where an injunction required assets up to a stated value to be kept within the jurisdiction: ‘There must . .
Cited – In re Ford, Ex parte the Trustee 1900
. .
Cited – Halvanon Insurance Co Ltd v Central Reinsurance Corporation CA 1988
The fact that a contract was made by an unauthorised insurer contrary to the 1974 Act, which was silent as to the effect of a breach of this statute, did not render the contracts made by the unauthorised insurer void. Rendering transactions void . .
Cited – In re Mordant CA 1996
The court discussed the interplay of family and insolvency proceedings: ‘Since the wife is unable to prove in the husband’s bankruptcy, the position . . is that the husband’s trustee must use the andpound;385,000 in paying the trustee’s expenses . .
Cited – In re Multi Guarantee Ltd CA 1987
Nourse LJ said of the Condon Case: ‘The principle of cases such as those is that the court will direct a trustee in bankruptcy not to insist on his full legal rights if it would be unacceptable for him to do so. The principle is subject to . .
Appealed to – Edwards, Drummond Smith v Flightline Limited CA 5-Feb-2003
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 . .
Cited by:
Appeal from – Edwards, Drummond Smith v Flightline Limited CA 5-Feb-2003
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 . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 06 December 2021; Ref: scu.174730
