The High Court rejected Sean Mackin’s claim to £400,000 sterling paid into funds used to meet John McCann’s obligations under a business settlement with James Osborne. The court was not satisfied that a trust had been created, and said Mackin had not shown that transferring the money onward breached a trust.
The dispute arose from a July 2009 settlement under which McCann was to pay Osborne in instalments as Osborne transferred interests in several companies. After McCann had difficulty making the first payment, the parties varied the settlement. The revised terms allowed the initial US$2.5 million to be paid in three instalments. The first, US$1.65 million, was paid in October 2009. The next instalment, US$350,000 due on 1 December, was not paid.
Under the varied agreement, that missed payment entitled Osborne to seek judgment for €2 million and discharged the settlement. Judgment for that amount was entered in Osborne’s favour on 21 December 2009.
Mackin claimed that he had provided the £400,000 to McCann to buy a 5% shareholding and that the money was conditional on shares being transferred to him. He argued that it remained his property if the transfer did not happen. A document dated 29 September 2009, which Mackin said he and McCann had signed, set out those terms.
Osborne denied knowing of any such arrangement before the judgment application. The judge accepted Osborne’s evidence and rejected Mackin’s account of earlier contact between them. The judgment noted that the alleged arrangement was absent from earlier pleadings and correspondence, and that Mackin’s written submissions said Osborne had learned the source of the money from McCann. The judge was not persuaded that the document had been created and signed when Mackin said it had. McCann, who was present at the hearing, was not called to give evidence.
The judge accepted, with some hesitation, that Mackin was the source of the £400,000, but found he had not shown that the money was provided on the specific terms he claimed. The court therefore found no trust, whether of the kind described as a Quistclose trust or otherwise, and no breach of trust. The judge also gave an alternative view: even if a trust had existed, Osborne had not known of it, and his agreement to postpone judgment and defer receipt of settlement payments was valuable consideration.
The judgment did not specify the final orders. The judge said counsel would be heard on their terms.