Date: Thu, 6 Jul 2006 17:39:20 +0100

From: Duncan Sheehan

Subject: Re Diplock with a twist

Dear all

The situation I have in mind is this. Company X goes bust; liquidator is appointed and proceeds to gather in and distribute the assets. Unfortunately he disburses money to people who turn out not to have been entitled to it (I don't think it matters why). Some time later after the company is wound up this is discovered. The question is what claims the contributories might have. Presumably there is a claim against the liquidator for not doing his job properly if nothing else, but might the contributories have a claim against the payees, and if so is that a derivative claim through the liquidator? It seems to me that this far more obviously analogous to Re Diplock than Butler v Broadhead [1975] Ch 97, where the claimants were creditors, claiming that the liquidator hadn't paid them and consequently overpaid the contributories, which strikes me as just the wrong way round. Templeman J though recognised a possible analogy with Re Diplock, but in the end said,

"The conclusion I have reached is that there can be no room for the operation of the principle of Ministry of Health v. Simpson [1951] A.C. 251 in respect of a claim for which a proof could have been entered and for which there has been advertisement, not complied with ..." at 111. And that must be right, but doesn't I think cover my facts.

Thoughts anybody? It may be that we need not invoke Re Diplock analogies at all. If so I'd be grateful for the answer from those who know more about insolvency than me. And apologies for the inevitable cross-posting ...

Duncan

Dr Duncan Sheehan
Director of Admissions
Norwich Law School
University of East Anglia
Norwich NR4 7TJ
United Kingdom

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