Source: All England Reporter
Publisher Citation: [2012] All ER (D) 142 (Jan)
Neutral Citation: [2012] EWCA Civ 4
Court: Court of Appeal, Civil Division
Judge: Mummery, Jackson and Lewison LJJ
Representation Keith Rowley QC and Peter Dodge (instructed by Morgan Cole LLP, Cardiff) for the claimant.
  Robert Hantusch (instructed by Berrymans Lace Mawer) for the defendants.
Judgment Dates: 18 January 2012

Catchwords

Trust and trustee - Constructive trust - Knowing receipt - Claimant and third defendant being in previous partnership - Third defendant being made bankrupt and using partnership shares to clear debt - Trustee being aware of potential claim by claimant to partnership assets - Claimant bringing claim against trustee for knowing receipt and dealing with trust property - Trustee seeking to establish defence of reasonable knowledge - Claimant alleging having never appointed proxy to attend creditors' meeting - Proxy approving trustee's conduct at creditors' meeting - Judge finding claimant having appointed proxy - Judge finding proxy not having been authorised to approve trustee's conduct - Defendant trustee appealing - Whether judge erring - Insolvency Rules 1986, r 8.1(6) and 8.3(6).

The Case

Trust and trustee Constructive trust. The Court of Appeal Civil Division, in allowing the defendants' appeal against the judge's decision to allow the claim of the claimant creditor of a bankrupt on the basis that the claimant had not instructed his proxy to agree to the resolutions proposed by the trustee in bankruptcy, held that the judge had erred in law.

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