The Manx courts recently had the opportunity to review, with the benefit of relevant UK precedent, the approach to be adopted to an inter pleader application. With the same proceedings, the court also considered what relief may be afforded to a financial institution which may hold funds on a form of constructive trust.
The particular facts of the decision before the court involved potentially competing claims to a bank account held in joint names and involved a potential interest in the funds by an off-island police force and a criminal investigation in another jurisdiction, into allegations of money laundering the proceeds of drug trafficking.
Order 10A of the Rules of the Court of the Isle of Man provides:
“1(1) Where a person is under a liability in respect of a debt or in respect of any money, goods or chattels, and he is, or expects to be, sued for or in respect of that debt or money or those goods or chattels by two or more persons making adverse claims thereto, the person under liability may apply to the court for relief by way of inter pleader.”
Deemster Cain cited and followed the UK decision of Watson v Park Royal Caterers (1961) 1WLR 727 for the purposes of defining the extent of expectation of ‘a rival claim’ and the extent of an expectation to be sued, sufficient for these purposes.
Read the full article here: Inter Pleader Proceedings and Constructive Trustee Arguments