Lyle & Anor v Bedborough & Anor (Rev 1)

Lyle & Anor v Bedborough & Anor (Rev 1)

The 2008 Agreement did not alter beneficial interests or create a constructive trust; the 2012 Declaration was a transaction at an undervalue entered into at a relevant time and is liable to be set aside under s339 Insolvency Act 1986. The appropriate order is to set aside the 2012 Declaration, restore the parties to a 50:50 tenancy in common, direct payment of £20,000 plus interest to Mrs Bedborough from sale proceeds, and order possession and sale of the property. No equitable account is due for the £50,000 spent on improvements.

Parties
Applicant: Duncan Lyle; Applicant: Nigel Fox; First Respondent: Jetson Ralph Bedborough; Second Respondent: Sara Evelin Bedborough
Jurisdiction
England and Wales
Judgment Date
08 February 2021
Procedural Posture
Bankruptcy/trustee Application / Judgment After Trial
Outcome
Application allowed in part; 2012 Declaration set aside; order for possession and sale granted
Legal Topics
Transaction at Undervalue, Constructive Trust, Bankruptcy, Setting Aside Transactions, Equitable Account, Order for Sale of Property
Insolvency Law Property Law Trusts Transaction at Undervalue Constructive Trust Bankruptcy Setting Aside Transactions Equitable Account +1 more

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Parties

Duncan Lyle

Applicant

Nigel Fox

Applicant

Jetson Ralph Bedborough

First Respondent

Sara Evelin Bedborough

Second Respondent

Procedural Posture

Bankruptcy/trustee Application / Judgment After Trial

Legal Issues

  1. 1 Whether the 2008 Agreement created a constructive trust altering beneficial interests in the property
  2. 2 Whether the 2012 Declaration was a transaction at an undervalue liable to be set aside under s339 Insolvency Act 1986
  3. 3 Whether the 2012 Declaration was entered into at a relevant time for the purposes of the Insolvency Act

Ratio Decidendi

The 2008 Agreement did not alter beneficial interests or create a constructive trust; the 2012 Declaration was a transaction at an undervalue entered into at a relevant time and is liable to be set aside under s339 Insolvency Act 1986. The appropriate order is to set aside the 2012 Declaration, restore the parties to a 50:50 tenancy in common, direct payment of £20,000 plus interest to Mrs Bedborough from sale proceeds, and order possession and sale of the property. No equitable account is due for the £50,000 spent on improvements.

Court Disposition

Application allowed in part; 2012 Declaration set aside; order for possession and sale granted

Orders

  • 2012 Declaration set aside; property to be held 50:50 as tenants in common between Applicants and Mrs Bedborough
  • Mrs Bedborough to receive £20,000 plus interest from sale proceeds after bankruptcy expenses but before creditor distribution