Ahmed & Ors v Ingram & Anor

Ahmed & Ors v Ingram & Anor

The correct approach is that s.284 does not provide a freestanding right to compensation; the trustees in bankruptcy must prove actual loss to the estate caused by breach of trust. The loss is to be calculated as the diminution in value of the shares between the date when the trustee in bankruptcy would have sold them (30 June 2010) and the date of their return. Fair value is the appropriate method of valuation. The sisters are jointly liable with the first appellant to the extent of their shareholdings for the relevant period.

Parties
Appellant: Kashif Ahmed; Appellant: Bushra Ahmed; Appellant: Tesneem Ahmed; Appellant: Tabasum Hussain; Respondent: David Ingram; Respondent: Michaela Hall
Jurisdiction
England and Wales
Judgment Date
19 March 2018
Procedural Posture
Civil Appeal / Appeal From High Court Judgment in Bankruptcy
Outcome
Appeal allowed in part
Legal Topics
Bankruptcy, Breach of Trust, Equitable Compensation, Valuation of Shares, Restitution
Insolvency Law Trust Law Bankruptcy Breach of Trust Equitable Compensation Valuation of Shares Restitution

Case Brief

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Parties

Kashif Ahmed

Appellant

Bushra Ahmed

Appellant

Tesneem Ahmed

Appellant

Tabasum Hussain

Appellant

David Ingram

Respondent

Michaela Hall

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment in Bankruptcy

Legal Issues

  1. 1 Does s.284 of the Insolvency Act 1986 provide a free-standing right to recover the value of void dispositions?
  2. 2 What is the correct approach to determining liability and loss for breach of trust in the context of void share transfers?
  3. 3 What is the appropriate date and method for valuing the loss to the bankruptcy estate?

Ratio Decidendi

The correct approach is that s.284 does not provide a freestanding right to compensation; the trustees in bankruptcy must prove actual loss to the estate caused by breach of trust. The loss is to be calculated as the diminution in value of the shares between the date when the trustee in bankruptcy would have sold them (30 June 2010) and the date of their return. Fair value is the appropriate method of valuation. The sisters are jointly liable with the first appellant to the extent of their shareholdings for the relevant period.

Court Disposition

Appeal allowed in part

Orders

  • The appeal is allowed to the extent that the date for valuation of the shares for loss is 30 June 2010, not the transfer date.
  • The appellants are jointly liable for the diminution in value of the shares between 30 June 2010 and the date of their return.