Daniel Lightman KC and Reuben Comiskey (of Radcliffe Chambers), instructed by Stephen Baker of Herrington Carmichael, represented the successful appellants in Docklock Limited v C Christo & Co Limited [2024] EWCA Civ 45.

In a judgment handed down this morning, a very strong Court of Appeal – Lords Justice Lewison, Newey and Nugee - held that the rule in Clayton’s Case (the first in, first out rule) operates in the case of a running account between a property management company and its client.  In consequence, payments out of the account were automatically appropriated to sums standing to the credit of the account at the time and were not available to set off against other sums received in a later period.  Neither a subsequent Family Division order nor a related settlement agreement entered into between the relevant companies should be construed so as retrospectively to undo that prior appropriation.

To read the Court of Appeal’s judgment, please click here.