Ratio Decidendi
Where a company in financial difficulty segregates customer deposits into a separate trust account, those funds are held on trust for the customers and do not form part of the company's assets available to general creditors in a liquidation.
Fakty
A mail order company, fearing insolvency, opened a separate bank account for customer deposits on the advice of its accountants.
Podsumowanie orzeczenia
Megarry J held the money in the separate account was held on trust for the customers. It was not available to the company's general creditors. The declaration of trust was valid even though the company was approaching insolvency.
Kluczowe cytaty
"I know of no reason why a company should not create a trust of its customers' prepayments."
— Megarry J
Późniejsze zastosowanie
Standard authority on the creation of trusts to protect pre-payments in insolvency.