The High Court has ordered the winding up of an Irish trust fund established to protect travellers if an IATA member travel company became insolvent, and directed how its remaining money is to be distributed.
In a judgment delivered on 28 January 2014, Mr Justice Peter Charleton said the fund held €721,165. It had been built up from contributions by some smaller travel agents that were excused from providing a bond or insurance policy. The fund was created under a trust deed dated 11 October 1985.
The trustees applied to the court for directions on an ex parte motion on 27 January 2014. The judgment said alternative protection had been arranged externally for ticket bookings through IATA members in Ireland, making the trust unnecessary. The court accepted that the deed’s distribution provisions raised questions for which there was no clear answer, and held that its jurisdiction to assist the trustees was properly invoked.
The deed provided for the fund to be held “to the order of the retail agent” when the trust ended. The judge considered three possible distribution methods: payments based on each agent’s historic contributions, equal shares for qualifying agents, or shares proportionate to the number of years each had contributed. He rejected the first as impractical because of the difficulty and expense of reconstructing decades of contribution records, and the second as inequitable to long-standing contributors. He concluded the years-based approach was the most equitable available.
The order requires the trustees to write to each retail agent listed in an exhibit to the chairman’s affidavit. Each must provide an auditor’s statement confirming it was IATA accredited on 1 October 2012, contributed to the fund, and stating the period of its contributions. The information must be supplied within 60 days; an agent that does not reply will be excluded.
After that period, reasonable legal, accounting and administrative fees related to the fund are to be deducted. The remaining money is to be distributed pro rata according to the years of contribution among agents that replied and meet the accreditation and contribution criteria. The trustees were also awarded reasonable costs of the application, to be taxed. The order grants liberty to apply.