McLean and another (as Joint Administrators of Dent Company (a partnership) (in administration)) v Berry (as trustee of the Bankruptcy Estate of Dent) and others

Equity – Marshalling. The Chancery Division ruled on an application by the joint liquidators of a partnership (in administration) for directions, under para 63 of Sch B1 to the Insolvency Act 1986. The court held, among other things, that the fourth respondent, who had loaned money to the partnership, was entitled to claim the proceeds of assets subject to an agricultural charge by the application of the principle of 'marshalling' and to prove as an unsecured creditor in the administration for any shortfall, in circumstances where a bank had had the right to resort to two securities in support of its lending to the partnership and where the fourth respondent had had a right to resort to one security in support of her lending to the partnership, a company connected to the partners and to the partners personally. The court further held that the trustees in bankruptcy of the partners did not have a claim based on unjust enrichment and were not entitled to claim in the administration of the partnership by operation of the doctrine of subrogation.

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