In the opinion of the Court by Lord Johnston in Causa by the Highland Council (petitioners)
Case reference:
[2004] ScotCS 16
Friday, 23 January 2004
Key terms: Reclaiming motion - suspension of charge for payment of money - suspension at interim - receivership - executed charge - new ground of appeal - compensation - retention - bankrupt - insolvency - deposit account
This was a reclaiming motion for the suspension of a charge for payment of money and suspension ad interim. The Construction Centre Group Limited (“CCG”) were in receivership. An adjudicator had made an award in favour of the CCG in the sum of £245,469.24 on 28th June. On 4th July 2003 an adjudicator issued a decision in favour of the Highland Council in the sum of £360,305.76 against an original claim of £638,400.00. On 26th November the Respondents went into receivership.
The CCG obtained a decree in respect of the first adjudicator’s decision and extracted and executed a charge. The Highland Council sought suspension of that charge. Lord Calloway refused to grant interim suspension and the Highland Council appealed. A new ground of appeal was raised, namely; the insolvency of the CCG.
The right to balance debts in bankruptcy or liquidation whether as compensation or retention have been recognised as equitable relief for some time. In this case equity favoured suspension in order to preserve the status. The money was lodged on a deposit account in joint names and so there was no risk to the CCG. However, if the interim suspension had not been granted then there was serious risk that the Highland Council would end up paying twice. Therefore the reclaiming motion was allowed and the suspension ordered.
The CCG obtained a decree in respect of the first adjudicator’s decision and extracted and executed a charge. The Highland Council sought suspension of that charge. Lord Calloway refused to grant interim suspension and the Highland Council appealed. A new ground of appeal was raised, namely; the insolvency of the CCG.
The right to balance debts in bankruptcy or liquidation whether as compensation or retention have been recognised as equitable relief for some time. In this case equity favoured suspension in order to preserve the status. The money was lodged on a deposit account in joint names and so there was no risk to the CCG. However, if the interim suspension had not been granted then there was serious risk that the Highland Council would end up paying twice. Therefore the reclaiming motion was allowed and the suspension ordered.