Hollicourt (Contracts) Ltd v Bank of Ireland
Encyclopedia
Hollicourt Ltd v Bank of Ireland [2000] EWCA Civ 263 is a UK insolvency law
case, concerning whether a bank should pay restitution for moneys paid out of its account after a moratorium under the Insolvency Act 1986
section 127.
Blackburne J, applying dictra from Gray’s Inn held that the bank was liable to pay restitution for the money that had passed through its facility.
So property could be recovered from the payees only, but not the bank which acted as a simple agent in the transfer.
UK insolvency law
United Kingdom insolvency law deals with the insolvency of firms and individuals in the United Kingdom. The important statutes are the Insolvency Act 1986, as amended by the Enterprise Act 2002, as well as the Company Director Disqualification Act 1986 and the Companies Act 2006.Insolvency is a...
case, concerning whether a bank should pay restitution for moneys paid out of its account after a moratorium under the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 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:...
section 127.
Facts
Hollicourt was a construction company and it went insolvent in 1996. The Bank of Ireland, 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.Blackburne J, applying dictra 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 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.