What should a court do where multiple innocent claimants have contributed to a mixed fund that is now insufficient to meet all of their claims? Mohammud-Jaamae Hafeez-Baig and Jordan English consider this question in an article for The Modern Law Review.
Faced with the problem that arises where multiple innocent claimants have contributed to a mixed fund that is now insufficient to meet all their claims, English and Australian courts have suggested three solutions: (i) the rule in Clayton’s Case, (ii) the ‘simple pari passu’ approach; and (iii) the ‘rolling charge’ or ‘North American’ approach. In Caron v Jahani (No 2) the New South Wales Court of Appeal adopted a simplified version of the third solution: the ‘simplified rolling charge’ approach. In doing so, the Court demonstrated that once the rule in Clayton’s Case is (rightly) discarded, what remains is not simply a binary choice between the second and third solutions. Jaamae and Jordan argue that English courts should revisit their approach to the problem posed at the outset by jettisoning the rule in Clayton’s Case by adopting the simplified rolling charge approach.