is a

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While Bankruptcy in the United Kingdom, UK bankruptcy law concerns the rules for natural persons, the term ''insolvency'' is generall ...

case concerning whether a bank should pay

restitution Restitution and unjust enrichment is the field of law relating to gains-based recovery. In contrast with damages (the law of compensation), restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability ...

for moneys paid out of its account after a moratorium under the

Insolvency Act 1986 The Insolvency Act 1986 (c. 45) is an act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication ...

section 127.

Facts

Hollicourt was a construction company and it went insolvent in 1996. The

Bank of Ireland Bank of Ireland Group plc () is a commercial bank operation in Ireland and one of the traditional Big Four Irish banks. Historically the premier banking organisation in Ireland, the bank occupies a unique position in Irish banking history. At ...

, 31 King Street, Leeds, continued to operate its account, paying money in and out, for three months after because it missed (through human error) the notification of the winding up petition in the

Gazette A gazette is an official journal, a newspaper of record, or simply a newspaper. In English and French speaking countries, newspaper publishers have applied the name ''Gazette'' since the 17th century; today, numerous weekly and daily newspapers ...

. Blackburne J, applying dicta from Gray's Inn, held that the bank was liable to pay restitution for the money that had passed through its facility.

Judgment

Mummery LJ Sir John Frank Mummery, DL (born 5 September 1938) is a former Lord Justice of Appeal and was President of the Investigatory Powers Tribunal and a member of the Court of Ecclesiastical Causes Reserved in the UK. Education Mummery attended D ...

for the court ( Peter Gibson LJ and Latham LJ) held that Blackburne J was wrong. Only the final recipients, not the bank, were liable to repay the money. There was no unjust enrichment on the bank's part, and no comparable restitution case could be found. The banking transactions 'are merely part of the process by which dispositions of the company's property are made.' So property could be recovered from the payees only, but not the bank which acted as a simple agent in the transfer.

Notes

{{reflist, 2 United Kingdom insolvency case law English banking case law Bank of Ireland Court of Appeal (England and Wales) cases 2000 in United Kingdom case law

Facts

Judgment

See also

Notes