Paul Allen v Ann Stephanie Hurst & Ors

Paul Allen v Ann Stephanie Hurst & Ors

The Declaration of Trust was set aside as a transaction defrauding creditors under s.423 IA 1986. The surplus proceeds of sale, after payment of the secured charge, costs of sale, and bankruptcy debts and expenses, are to be paid in equal shares to the Beneficiaries, not to Mrs Hurst, as they are innocent recipients and Mrs Hurst has no need for the surplus. The Applicant is to have immediate conduct of the sale, with the property marketed at £2.05m (minimum £1.8m), and Mr and Mrs Hurst must vacate by 23 January 2023 or completion, whichever is earlier.

Parties
Applicant (trustee in Bankruptcy): Paul Allen; First Respondent (bankrupt): Ann Stephanie Hurst; Second Respondent (bankrupt): Robert Alfred Hurst; Third Respondent (beneficiary): Fiona Sarah Boroshek; Fourth Respondent (beneficiary): Peter Adam Hurst; Fifth Respondent (beneficiary): Caroline Joanna Hurst
Jurisdiction
England and Wales
Judgment Date
26 October 2022
Procedural Posture
Insolvency Application (transaction Defrauding Creditors) / Consequential Relief After Finding of Transaction at Undervalue
Outcome
Declaration of Trust set aside; property to be sold; surplus proceeds to beneficiaries; Applicant to have conduct of sale; Mr and Mrs Hurst to vacate by 23 January 2023 or completion; costs from estate.
Legal Topics
Transaction Defrauding Creditors, Setting Aside Trust, Distribution of Surplus Proceeds, Sale of Property in Bankruptcy, Relief Under Insolvency Act 1986 S.423
Insolvency Law Trust Law Property Law Transaction Defrauding Creditors Setting Aside Trust Distribution of Surplus Proceeds Sale of Property in Bankruptcy Relief Under Insolvency Act 1986 S.423

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Parties

Paul Allen

Applicant (trustee in Bankruptcy)

Ann Stephanie Hurst

First Respondent (bankrupt)

Robert Alfred Hurst

Second Respondent (bankrupt)

Fiona Sarah Boroshek

Third Respondent (beneficiary)

Peter Adam Hurst

Fourth Respondent (beneficiary)

Caroline Joanna Hurst

Fifth Respondent (beneficiary)

Procedural Posture

Insolvency Application (transaction Defrauding Creditors) / Consequential Relief After Finding of Transaction at Undervalue

Legal Issues

  1. 1 Whether the Declaration of Trust should be set aside under s.423 Insolvency Act 1986 as a transaction defrauding creditors
  2. 2 How surplus proceeds of sale should be distributed after satisfaction of bankruptcy debts and costs
  3. 3 Who should have conduct of the sale and on what terms

Ratio Decidendi

The Declaration of Trust was set aside as a transaction defrauding creditors under s.423 IA 1986. The surplus proceeds of sale, after payment of the secured charge, costs of sale, and bankruptcy debts and expenses, are to be paid in equal shares to the Beneficiaries, not to Mrs Hurst, as they are innocent recipients and Mrs Hurst has no need for the surplus. The Applicant is to have immediate conduct of the sale, with the property marketed at £2.05m (minimum £1.8m), and Mr and Mrs Hurst must vacate by 23 January 2023 or completion, whichever is earlier.

Court Disposition

Declaration of Trust set aside; property to be sold; surplus proceeds to beneficiaries; Applicant to have conduct of sale; Mr and Mrs Hurst to vacate by 23 January 2023 or completion; costs from estate.

Orders

  • Declaration of Trust dated 19 June 2009 set aside under s.423 Insolvency Act 1986.
  • Property (73 Southway London NW11 6SB) to be sold; Applicant's solicitor to have conduct of sale and be appointed under s.50 Trustee Act 1925 to convey property.