Hellard v Michael & Anor

Hellard v Michael & Anor

The original bidding process was materially unfair to Mr Michael because he was not informed of the cap on trustee's costs, unlike Fairview. Therefore, the trustee cannot proceed with the outcome of that process and must conduct a new, fair bidding process with clear and equal terms for both parties.

Parties
Applicant/trustee in Bankruptcy: Kevin John Hellard; First Respondent/bankrupt: Spencer Michael; Second Respondent: Fairview New Homes Farnborough Limited
Jurisdiction
England and Wales
Judgment Date
16 July 2009
Procedural Posture
Bankruptcy Application for Directions / Ruling on Trustee's Application for Directions Regarding Assignment/compromise of Counterclaim
Outcome
Application granted in part; new bidding process ordered; no costs order between Mr Michael and Fairview; permission to appeal refused.
Legal Topics
Assignment of Claims, Trustee's Powers and Duties, Bidding Process Fairness, Compromise of Claims
Insolvency Bankruptcy Assignment of Claims Trustee's Powers and Duties Bidding Process Fairness Compromise of Claims

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Parties

Kevin John Hellard

Applicant/trustee in Bankruptcy

Spencer Michael

First Respondent/bankrupt

Fairview New Homes Farnborough Limited

Second Respondent

Procedural Posture

Bankruptcy Application for Directions / Ruling on Trustee's Application for Directions Regarding Assignment/compromise of Counterclaim

Legal Issues

  1. 1 Whether the trustee's bidding process for assignment of the counterclaim was fair
  2. 2 Whether the trustee should be required to accept the highest extant offer or conduct a new bidding process
  3. 3 Whether assignment of a counterclaim to the defendant is legally permissible

Ratio Decidendi

The original bidding process was materially unfair to Mr Michael because he was not informed of the cap on trustee's costs, unlike Fairview. Therefore, the trustee cannot proceed with the outcome of that process and must conduct a new, fair bidding process with clear and equal terms for both parties.

Court Disposition

Application granted in part; new bidding process ordered; no costs order between Mr Michael and Fairview; permission to appeal refused.

Orders

  • The trustee is to conduct a new round of bidding for the assignment/compromise of the counterclaim, with clear terms as set out in the draft order and schedule.
  • Both Mr Michael and Fairview to bear their own costs of the application.