Department for Environment Food & Rural Affairs v Feakins & Anor [2004] EWHC 2735 (Ch) (26 November 2004)

Department for Environment Food & Rural Affairs v Feakins & Anor [2004] EWHC 2735 (Ch) (26 November 2004)

Kevin Feakins participated in an arrangement whereby Hill Farm was transferred to Miss Hawkins at an undervalue with the purpose of putting assets beyond the reach of creditors, satisfying the requirements of section 423 of the Insolvency Act 1986. The tenancy was not a sham nor impliedly surrendered, but was used as a device to facilitate the undervalue transaction. The sale and surrender were a composite arrangement in which Feakins participated. Miss Hawkins was not a bare nominee for Feakins. Defra's claim under section 423 succeeds.

Citation
[2004] EWHC 2735 (Ch)
Parties
Claimant/part 20 Defendant: The Department for Environment Food and Rural Affairs; Defendant/part 20 Claimant: Kevin Andrew Feakins; Defendant/part 20 Claimant: Georgina Hawkins
Jurisdiction
England and Wales
Judgment Date
26 November 2004
Procedural Posture
High Court Chancery Division Civil Claim and Counterclaim / Judgment After Trial
Outcome
Claim under section 423 Insolvency Act 1986 succeeds; appropriate order to restore Defra's position to be determined after further argument. Counterclaim for damages not determined in this extract.
Legal Topics
Transaction at Undervalue, Section 423 Insolvency Act 1986, Sham Tenancy, Piercing the Corporate Veil, Nominee Ownership, Foot and Mouth Disease Outbreak, Environmental Contamination, Damages for Trespass
Insolvency Law Property Law Environmental Law Transaction at Undervalue Section 423 Insolvency Act 1986 Sham Tenancy Piercing the Corporate Veil Nominee Ownership +3 more

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Parties

The Department for Environment Food and Rural Affairs

Claimant/part 20 Defendant

Kevin Andrew Feakins

Defendant/part 20 Claimant

Georgina Hawkins

Defendant/part 20 Claimant

Procedural Posture

High Court Chancery Division Civil Claim and Counterclaim / Judgment After Trial

Legal Issues

  1. 1 Whether the transfer of Hill Farm to Miss Hawkins was a transaction at an undervalue under section 423 of the Insolvency Act 1986
  2. 2 Whether Kevin Feakins 'entered into' the relevant transaction for the purposes of section 423
  3. 3 Whether the agricultural tenancy was a sham or had been surrendered

Ratio Decidendi

Kevin Feakins participated in an arrangement whereby Hill Farm was transferred to Miss Hawkins at an undervalue with the purpose of putting assets beyond the reach of creditors, satisfying the requirements of section 423 of the Insolvency Act 1986. The tenancy was not a sham nor impliedly surrendered, but was used as a device to facilitate the undervalue transaction. The sale and surrender were a composite arrangement in which Feakins participated. Miss Hawkins was not a bare nominee for Feakins. Defra's claim under section 423 succeeds.

Court Disposition

Claim under section 423 Insolvency Act 1986 succeeds; appropriate order to restore Defra's position to be determined after further argument. Counterclaim for damages not determined in this extract.

Orders

  • Order to be made restoring Defra's position as if the transaction had not occurred, likely by charging Miss Hawkins' freehold interest with the amount previously secured by IBAP's charging order, subject to further submissions.
  • No order piercing the corporate veil or declaring Miss Hawkins a nominee for Feakins.