The decision of Norris J in the Leeds District Registry in McLean v Berry [2016] EWHC 2650 (Ch); [2016] All ER (D) 18 (Nov) involved an application through leading counsel for the joint administrators of a partnership which had carried on business in pig farming and haulage for directions as to the proper treatment of funds arising from the sale of non-agricultural assets subject to a first charge to a bank and a second ranking security to another creditor, Lady Lynne Morrison, and agricultural assets secured by way of security under the Agricultural Creditors Act 1928 in favour of the bank.

Louis Doyle advised and represented Lady Morrison in her successful claim to require the marshalling of the bank’s security (where the bank had been discharged in full from the non-agricultural assets) and in defeating the claims of the trustees-in-bankruptcy of the individual partners who sought to argue, first, that security under the 1928 Act cannot be subject to marshalling and, secondly, that the bankruptcy estates were entitled to benefit from the doctrine of subrogation in priority to Lady Morrison’s claim. Applying the principles applicable to costs in insolvency litigation, as identified by Briggs J (as he then was) in the Lehman Brothers litigation, Norris J also ordered that the trustees pay Lady Morrison’s costs of the application.

The Vice-Chancellor’s judgment is important in its analysis and application of the modern authorities on marshalling, the distinction to be drawn between the principle of marshalling and the doctrine of subrogation and the nature of security granted to a bank (as defined) under the Agricultural Credits Act 1928.

For an interview by Alex Heshamty of LexisNexis ( with Louis Doyle about the case click here


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