Russell-cooke Trust v Richard Prentis & Others

JurisdictionEngland & Wales
JudgeMR JUSTICE LINDSAY
Judgment Date10 April 2003
Neutral Citation[2003] EWHC 1206 (Ch)
Docket NumberNo. HC0003648
CourtChancery Division
Date10 April 2003

[2003] EWHC 1206 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of JusticeThe StrandLONDON WC2A

Before:

Mr Justice Lindsay——-

No. HC0003648

Russell-cooke Trust
Claimant
and
Richard Prentis & Others
Defendants

MR T OAKLEY (instructed by Russell-Cooke) appeared on behalf of the Claimant.

No representation for the Defendants was available.

10

th April 2003

MR JUSTICE LINDSAY
1

I have before me an application, 03648, headed In the matter of The Solicitors Act 1974; In the matter of Russell-Cook Trustee Company, its trustee and various trusts; In the matter of an application by the Russell-Cook Trust Company; and In the matter of application by The Law Society having, firstly, Russell-Cook Trust Company, and, secondly, The Law Society as the claimants. There are three defendants: Richard Prentis & Co Limited, in liquidation; secondly, Richard Michael James Prentis; and, thirdly, Steven Hedley Halsey.

2

I will not say anything further about the background to the case because I gave a long judgment on 28th October 2002 and the matter has been in front of me on a number of occasions in the past and the background is fully set out there.

3

The Trust Company and the Law Society together have made substantial recoveries with a view to distributing them to the investors in the Prentis scheme. It was called SPIP, and, amongst the investors on the face of things entitled to receive distributions, is Steven Hedley Halsey, the third defendant. He has invested some £45,000 in the Scheme. Mr Halsey, though, is also, or was also, a shareholder in and director of the Prentis company, Richard Prentis & Co Ltd, the first defendant. That company, as the name suggests, was closely associated with the second defendant, Richard Michael James Prentis, who was the solicitor who began the whole investment scheme.

4

By a transaction which generated proceedings against him Mr Halsey received £55,000 as a personal share of profits on a deal that had been financed by a loan from the scheme. After The Law Society had intervened proceedings were launched. One set of proceedings was before Laddie J on 22nd October 2001 and he ordered, inter alia, that Mr Halsey was to pay to the Law Society, as trustees for the investors, the sum of £55,000, the sum which Mr Halsey had received. Also there was provision for compound interest at yearly rests. So, on the one hand, one has the position that Mr Halsey owed money to the scheme and the fund, but, on the other, the position that Mr Halsey as an investor had put £45,000, apparently of his own money, money not traceable to any default, into the scheme.

5

The relationship between the first claimant and the second, the Russell-Cook Trust Company and the Law Society, is, on the facts of this case, such that one can fairly take them to be one and the same so far as concerns recovery with a view to the receipts of the recovery being held in trust for investors. The Law Society intervened and thereupon statutory trust came into play but subsequent orders have been made which, as I say, lead me to be able to regard the two of them as, to all intents and purposes, identical so far as concerns the particular exercise in front of me.

6

So, the position being that Mr Halsey both is owed money by the fund and yet owes money to the fund, that brings into play the long established but not always remembered rule in Cherry v Boultbee. The original case at 4 My & Cr. 442, needs to be read with some considerable care, even perspicacity, if one is to derive a rule from it but that a rule has been derived from it is clear on the authorities. In Re: Akerman [1891) 3Ch 212, one finds, at p219, this, in the judgment of Kekewich J:

"The principle is to be found laid down in Cherry v Boultbee in the passage to which I have just referred, and also in ...

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