Random House UK Ltd v Allason & Ors [2008] EWHC 2854 (Ch) (11 December 2008)

Random House UK Ltd v Allason & Ors [2008] EWHC 2854 (Ch) (11 December 2008)

The evidence overwhelmingly established that 6 Burton Mews was not and never had been an asset of the trust; the purported declaration of trust and draft contract were found to be concocted by Mr Allason to prevent enforcement of costs orders. The trustees failed to satisfy the secondary evidence rule, and there was no genuine declaration of trust. Regarding the £150,000 gift, the court found that a real and substantial purpose of the transaction was to put assets beyond the reach of creditors, satisfying s.423(3) of the Insolvency Act 1986. Accordingly, the gift was liable to be set aside.

Citation
[2008] EWHC 2854 (Ch)
Parties
Claimant: Random House UK Limited; First Defendant: Julian Allason; Second Defendant: Paul Hanson; Third Defendant: Thomas Cheplick; Fourth Defendant: Rupert Allason
Jurisdiction
England and Wales
Judgment Date
11 December 2008
Procedural Posture
Chancery Division Civil Claim / Judgment After Trial
Outcome
Claim allowed in full for the claimant.
Legal Topics
Enforcement of Costs Orders, Beneficial Ownership of Property, Transactions at Undervalue, Section 423 Insolvency Act 1986, Declaration of Trust, Secondary Evidence Rule, Fraudulent Conveyance
Insolvency Trusts and Estates Property Law Civil Procedure Enforcement of Costs Orders Beneficial Ownership of Property Transactions at Undervalue Section 423 Insolvency Act 1986 +3 more

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Parties

Random House UK Limited

Claimant

Julian Allason

First Defendant

Paul Hanson

Second Defendant

Thomas Cheplick

Third Defendant

Rupert Allason

Fourth Defendant

Procedural Posture

Chancery Division Civil Claim / Judgment After Trial

Legal Issues

  1. 1 Whether 6 Burton Mews is beneficially owned by the DC Allason Trust or by WRL
  2. 2 Whether the gift of £150,000 to the trust is liable to be set aside under s.423 Insolvency Act 1986

Ratio Decidendi

The evidence overwhelmingly established that 6 Burton Mews was not and never had been an asset of the trust; the purported declaration of trust and draft contract were found to be concocted by Mr Allason to prevent enforcement of costs orders. The trustees failed to satisfy the secondary evidence rule, and there was no genuine declaration of trust. Regarding the £150,000 gift, the court found that a real and substantial purpose of the transaction was to put assets beyond the reach of creditors, satisfying s.423(3) of the Insolvency Act 1986. Accordingly, the gift was liable to be set aside.

Court Disposition

Claim allowed in full for the claimant.

Orders

  • Declaration that 6 Burton Mews is not held on trust for the DC Allason Trust and is beneficially owned by WRL.
  • Order setting aside the gift of £150,000 to the trust under s.423 Insolvency Act 1986.