Re Hirth: CA 1899

The debtor, already in financial difficulties, transferred his business to a limited company which he had formed for the purpose. Within three months he committed an act of bankruptcy by failing to comply with a bankruptcy notice. He was adjudicated bankrupt and the trustee elected to impeach the transfer of the business as a fraudulent conveyance, and an act of bankruptcy. A question of priorities then arose between the trustee in bankruptcy and the creditors of the company who had dealt with it in good faith and without notice of the act of bankruptcy.
Held: In rejecting the creditors’ claim to priority: ‘That would be all very well if the title of the trustee could be treated as accruing when he gave notice to impeach the transaction; it would be all very well as against everybody except the trustee in bankruptcy, whose title relates back. That doctrine is peculiar to bankruptcy; and it is because the trustee says, ‘This property, the moment I elect to avoid, and do avoid, is mine from an anterior date under the special provisions of Section 43 of the 1883 Act, ‘that he overrides all the transactions and dealings which have been relied on as an answer to his claim’


Sir Nathaniel Lindley MR


[1899] 1 QB 612


Bankruptcy Act 1883 43


England and Wales

Cited by:

CitedRe Dennis (A Bankrupt) CA 22-May-1995
A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .
Lists of cited by and citing cases may be incomplete.


Updated: 20 April 2022; Ref: scu.186757