The Weekly Law Reports
[2019] 3 WLR 493
Privy Council
Skandinaviska Enskilda Banken AB (Publ)
v
Conway and another[On appeal from the Court of Appeal of the Cayman Islands]
[2019] UKPC 36
2018 June 25,
26;
2019 July 29
2019 July 29
Lord Reed DPSC, Lord Wilson, Lord Lloyd-Jones, Lord Briggs JJSC, Sir Donnell Deeny
Cayman Islands— Insolvency— Voidable preference— Investors in company receiving proportion of company’s stated net asset value when redeeming participating shares— Company unable to meet large number of redemption requests and placed in liquidation— Company having recently met defendant bank’s redemption requests in full— Liquidators seeking recovery from bank in reliance on statutory provision invalidating preferential payments made by insolvent company in favour of creditor— Judge finding company having fraudulently inflated net asset value and having intended to prefer bank— Whether net asset value binding notwithstanding fraud— Whether liquidators having statutory right of recovery to which common law restitutionary defences not available—
Companies Law (2013 rev) (Cayman Islands), s 145(1)
Restitution— Unjust enrichment— Voidable preferences— Defendant bank investing customers’ funds in shares in investment company— Bank nominated as legal owner of shares but holding same on bare trust for customers— Company meeting bank’s share redemption requests when insolvent— Liquidator’s claim in restitution— Bank claiming no enrichment to itself as having been trustee passing on proceeds of redemptions to customers— Whether trustee appropriate defendant to restitutionary claim when having acted as principal rather than agent— Whether defence of change of position available to recipient of payment which constituted voidable preference— Whether liquidators entitled to recovery
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