Beckenham MC Ltd v Centralex Ltd & Ors

Beckenham MC Ltd v Centralex Ltd & Ors

The transfers of the properties were transactions at an undervalue undertaken with the purpose of putting assets beyond the reach of the applicant as creditor, and the applicant was prejudiced by the transactions. The trust arrangements did not preclude the applicant from seeking relief under section 423, and the applicant is entitled in principle to the relief sought.

Parties
Applicant: Beckenham M. C. Limited; First Respondent: Centralex Limited; Second Respondent: Karlton London Limited; Third Respondent: London Congress Limited; Fourth Respondent: Mortimer Corporation Limited
Jurisdiction
England and Wales
Judgment Date
10 June 2004
Procedural Posture
Civil / Judgment on Application Under Section 423 of the Insolvency Act 1986
Outcome
Application allowed in principle; relief granted subject to further submissions on form of order.
Legal Topics
Transactions at Undervalue, Charging Orders, Trustee Liability, Enforcement of Judgments
Insolvency Law Trust Law Property Law Transactions at Undervalue Charging Orders Trustee Liability Enforcement of Judgments

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Parties

Beckenham M. C. Limited

Applicant

Centralex Limited

First Respondent

Karlton London Limited

Second Respondent

London Congress Limited

Third Respondent

Mortimer Corporation Limited

Fourth Respondent

Procedural Posture

Civil / Judgment on Application Under Section 423 of the Insolvency Act 1986

Legal Issues

  1. 1 Whether the transfers of Units 29 and 30 were transactions at an undervalue under section 423 of the Insolvency Act 1986
  2. 2 Whether the applicant was prejudiced by the transactions
  3. 3 Whether the respondents acted with the statutory purpose of putting assets beyond reach of creditors

Ratio Decidendi

The transfers of the properties were transactions at an undervalue undertaken with the purpose of putting assets beyond the reach of the applicant as creditor, and the applicant was prejudiced by the transactions. The trust arrangements did not preclude the applicant from seeking relief under section 423, and the applicant is entitled in principle to the relief sought.

Court Disposition

Application allowed in principle; relief granted subject to further submissions on form of order.

Orders

  • Transfers of Units 29 and 30 to be set aside under section 423 of the Insolvency Act 1986, subject to final order.
  • Applicant entitled to a charging order over Units 29 and 30 to secure payment of judgment debts, subject to final order.