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#equity #law #tracing
Question
Court of Appeal in [ case ] has reluctantly confirmed that the rule is still good law, although subject to any contrary intention which the courts are ready to find. The rationale for this, as explained by Dillon LJ, is that the rule has been enshrined in English law for so long that it can only be replaced by a House of Lords (presumably now a Supreme Court) judgment. The case concerned the collapse of the Barlow Clowes investment company in Gibraltar. Investors had paid into investment plans, but the money had been stolen and the company was left owing £115m with assets of far less than that. Some investors argued that the rules in Re Clayton’s Case should be applied. This would mean that the later investors would recover nearly all their money, and the earlier investors, nothing. Woolf LJ held: ‘The rule need only be applied when it is convenient to do so and when its application can be said to do broad justice having regard to the nature of the competing claims. It is not applied if this is the intention or presumed intention of the beneficiaries. The rule is sensibly not applied when the costs of applying it is likely to exhaust the fund available for the beneficiaries.’ On the facts of the case it was decided that the investment fund was regarded by the investors as a common pool, and that they should share rateably in what remained because they had experienced a common misfortune. Accordingly, the court ordered a rateable distribution among the claimants who were investors.
Answer
Barlow Clowes International Ltd v Vaughan [1992] 4 All ER 22

Tags
#equity #law #tracing
Question
Court of Appeal in [ case ] has reluctantly confirmed that the rule is still good law, although subject to any contrary intention which the courts are ready to find. The rationale for this, as explained by Dillon LJ, is that the rule has been enshrined in English law for so long that it can only be replaced by a House of Lords (presumably now a Supreme Court) judgment. The case concerned the collapse of the Barlow Clowes investment company in Gibraltar. Investors had paid into investment plans, but the money had been stolen and the company was left owing £115m with assets of far less than that. Some investors argued that the rules in Re Clayton’s Case should be applied. This would mean that the later investors would recover nearly all their money, and the earlier investors, nothing. Woolf LJ held: ‘The rule need only be applied when it is convenient to do so and when its application can be said to do broad justice having regard to the nature of the competing claims. It is not applied if this is the intention or presumed intention of the beneficiaries. The rule is sensibly not applied when the costs of applying it is likely to exhaust the fund available for the beneficiaries.’ On the facts of the case it was decided that the investment fund was regarded by the investors as a common pool, and that they should share rateably in what remained because they had experienced a common misfortune. Accordingly, the court ordered a rateable distribution among the claimants who were investors.
Answer
?

Tags
#equity #law #tracing
Question
Court of Appeal in [ case ] has reluctantly confirmed that the rule is still good law, although subject to any contrary intention which the courts are ready to find. The rationale for this, as explained by Dillon LJ, is that the rule has been enshrined in English law for so long that it can only be replaced by a House of Lords (presumably now a Supreme Court) judgment. The case concerned the collapse of the Barlow Clowes investment company in Gibraltar. Investors had paid into investment plans, but the money had been stolen and the company was left owing £115m with assets of far less than that. Some investors argued that the rules in Re Clayton’s Case should be applied. This would mean that the later investors would recover nearly all their money, and the earlier investors, nothing. Woolf LJ held: ‘The rule need only be applied when it is convenient to do so and when its application can be said to do broad justice having regard to the nature of the competing claims. It is not applied if this is the intention or presumed intention of the beneficiaries. The rule is sensibly not applied when the costs of applying it is likely to exhaust the fund available for the beneficiaries.’ On the facts of the case it was decided that the investment fund was regarded by the investors as a common pool, and that they should share rateably in what remained because they had experienced a common misfortune. Accordingly, the court ordered a rateable distribution among the claimants who were investors.
Answer
Barlow Clowes International Ltd v Vaughan [1992] 4 All ER 22
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Court of Appeal in Barlow Clowes International Ltd v Vaughan [1992] 4 All ER 22 has reluctantly confirmed that the rule is still good law, although subject to any contrary intention which the courts are ready to find. The rationale for this, as explained by Dillon

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