Dooneen Ltd (t/a McGinness Associates) and another (Respondents) v Mond (Appellant) (Scotland)
Case ID: UKSC 2016/0218
The construction of the expression "final distribution" in a voluntary trust deed for creditors, and whether this includes a distribution made when the creditors receive less than 100 pence in the pound and there remain (following that distribution) assets vested in the trustee, albeit the trustee is unaware of their existence.
Mr Davison granted a trust deed for his creditors, of which clause 11(ii) provided that "the final distribution" of the estate by the trustee would terminate the trust deed. The trustee, Mr Mond, made a distribution to the creditors under the trust deed of 22.41 pence in the pound, having earlier declared it to be a "first and final dividend". At the time of that distribution, Mr Mond was unaware that vested in him as trustee was a right of action against the Bank of Scotland in relation to PPI policies that had been mis-sold to Mr Davison. Mr Mond subsequently became aware of that right of action and received a compensation payment as trustee. The respondents brought a claim against Mr Mond arguing that the distribution of the "final dividend" was a "final distribution" and operated to terminate the trust, meaning the entitlement to compensation vested in Mr Davison. Mr Mond’s position was that a "final distribution" meant all of the estate vested in the trustee had been applied to the purposes of the trust deed. A distribution is therefore not final when there exists, albeit unknown to the trustee, assets which have not yet been gathered in but which nonetheless form part of the trust estate and should be distributed to the creditors. The Outer House and Inner House preferred the construction proposed by the Respondents.
David Emanuel Merton Mond
- Dooneen Ltd (t/a McGinnes Associates)
- Douglas Davison
Lord Reed, Lord Kerr, Lord Hodge, Lady Black, Lord Briggs
Hearing start date
03 Jul 2018
Hearing finish date
03 Jul 2018
|3 Jul 2018||Morning session|