Payment into Court Was on Trust

Regina v Common Professional Examination Board, ex parte Mealing-Mccleod (CA TLR 2 May)

The applicant was ordered to pay £6,000 into court as security for the costs of an appeal. She borrowed the money from her bank under a loan agreement which provided ‘You must use the cash loan for the purpose specified … You will hold that loan, or any part of it, on trust for us until you have used it for this purpose’. On the Board conceding the applicant’ s grounds of appeal the Court of Appeal ordered that her appeal be withdrawn and that the applications by both parties respecting the £6,000 paid in as security for costs be remitted to a High Court judge. The applicant had liabilities of some £20,000 in unpaid costs to the Board in respect of earlier litigation and the Board sought and obtained an order that the £6,000 be attributed in reduction of those costs. In allowing the applicant’s appeal and ordering that the £6,000 be repaid to her the Court of Appeal held that because she was a trustee of the money lent it did not become part of her general assets and therefore the court was not entitled, when the money was not required for the purpose for which it had been lent, to order it to be paid out in satisfaction of the costs orders previously made in different proceedings between the same parties.