The company sought to claim under a life policy. The deceased had died in Scotland insolvent. The trustee of the policy had declared that he held it on trust for the claimant, but the defendant, the judicial factor of the estate, said the declaration of trust was ineffective as a transaction at an undervalue. The company appealed an order which returned to it the payments it had made, but that the balance was held for the insolvent estate. They said that at the time the payments were made, they were for full value.
Held: To have a transaction at an undervalue by an ‘individual’ within the sections, the value in money or money’s worth, from the debtor’s point of view, of the consideration for which he enters into the transaction must be ‘significantly less’ than the value in money or money’s worth, again from the debtor’s point of view, of the ‘consideration provided’ by the debtor. The value in money or money’s worth of the totality of whatever it is that the debtor is parting with under the transaction. There is no absolute need to ascribe exact values before making that judgment. There had been a transaction at an undervalue, and the order was correct.
Judges:
Lord Justice Jonathan Parker Lord Justice Judge Lord Justice Waller
Citations:
[2004] EWCA Civ 800, [2004] BPIR 985, [2005] 1 BCLC 331
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Appeal from – Re Thoars (Dec’d); Reid v Ramlort Ltd ChD 2003
The company claimed the benefit of an insurance policy. They had paid certain premiums and the trustee had made a declaration that it was held on trust for the company. The insured died in Scotland, intestate and insolvent.
Held: The . .
Cited – Phillips (Liquidator of A J Bekhor and Co ) and Another v Brewin Dolphin Bell Lawrie HL 18-Jan-2001
The company sold its business to the respondent for one pound, but the respondent agreed to sublease computer equipment for an amount equivalent to the value of the company. The company defaulted, and the computer equipment was recovered. The . .
Cited – National Westminster Bank plc v Jones and Others CA 24-Oct-2001
The respondent farmers charged the farm by way of an agricultural floating charge to the claimants. On coming into difficulties, they set up a limited company and granted a tenancy in its favour and transferred assets to it. The bank obtained . .
Cited – In re M C Bacon Ltd ChD 1990
A liquidator claimed that the costs of an unsuccessful attempt to set a floating charge aside should be paid out of the assets subject to the charge in priority to the claims of the charge holder.
Held: The rule was a complete statement of the . .
Cited – Chohan v Saggar and Another CA 27-Dec-1993
The word ‘and’ in sections 423(2)(a) and 423(2)(b) is to be read conjunctively not disjunctively. Section 238(3) is to be interpreted as requiring restoration of the former position ‘as far as possible’ or ‘as far as practicable’, and that . .
Cited – Agricultural Mortgage Corporation Plc v Woodward and Another CA 30-May-1994
A tenancy granted by an insolvent farmer to his wife was set aside because of additional benefits which were granted. The tenancy was held to have been granted at an undervalue, even though the court was unable precisely to measure the value of the . .
Cited – Walker v WA Personnel Ltd 2002
The assets of group of companies were sold, and it then went into insolvent liquidation. The liquidator claimed that the sale was at an undervalue, and appliied to continue an interlocutory injunction.
Held: There was a triable issue as to . .
Cited by:
Full Hearing – Re Thoars (Dec’d); Reid v Ramlort Ltd ChD 15-Nov-2002
The deceased had a valuable life insurance policy. Before an operation he wrote it in trust with no consideration. He died in the operation. He was insolvent. The issue was as to when the policy was to be valued.
Held: The property was to be . .
Cited – Hill and Another v Haines ChD 3-May-2007
The husband and wife had separated and divorced. In ancillary proceedings, the family home had been transferred to the wife under a court order. The judge had noted that the husband was hopelessly insolvent, and he was made bankrupt some time later . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Wills and Probate, Trusts
Updated: 14 November 2022; Ref: scu.198603
