Breese (Liquidator of Flexi Containers Ltd) v Hiley & Ors [2018] EWHC 12 (Ch) (09 January 2018)

Breese (Liquidator of Flexi Containers Ltd) v Hiley & Ors [2018] EWHC 12 (Ch) (09 January 2018)

The court found Mrs Hiley was a connected person at the relevant time. The transfer of stock was a preference and a transaction at an undervalue under ss239 and 238 IA 1986. The floating charge was invalid except for £11,000 advanced after the charge. Relief was granted to restore the position as if the transaction had not occurred.

Citation
[2018] EWHC 12 (Ch)
Parties
Applicant: Kate Elizabeth Breese; 1st Respondent: Alison Helen Hiley; 2nd Respondent: Abby Hiley; 3rd Respondent: Alexander Philip Hiley
Jurisdiction
England and Wales
Judgment Date
09 January 2018
Procedural Posture
Insolvency Application / Judgment After Trial
Outcome
Application granted
Legal Topics
Preference, Transaction at Undervalue, Director's Duties, Floating Charge Avoidance
Insolvency Company Law Preference Transaction at Undervalue Director's Duties Floating Charge Avoidance

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Parties

Kate Elizabeth Breese

Applicant

Alison Helen Hiley

1st Respondent

Abby Hiley

2nd Respondent

Alexander Philip Hiley

3rd Respondent

Procedural Posture

Insolvency Application / Judgment After Trial

Legal Issues

  1. 1 Whether the transfer of stock to Mrs Hiley was a preference under s239 Insolvency Act 1986
  2. 2 Whether the transfer was a transaction at an undervalue under s238 Insolvency Act 1986
  3. 3 Validity of floating charges under s245 Insolvency Act 1986

Ratio Decidendi

The court found Mrs Hiley was a connected person at the relevant time. The transfer of stock was a preference and a transaction at an undervalue under ss239 and 238 IA 1986. The floating charge was invalid except for £11,000 advanced after the charge. Relief was granted to restore the position as if the transaction had not occurred.

Court Disposition

Application granted

Orders

  • The transfer of stock to Mrs Hiley is set aside as a preference and transaction at an undervalue.
  • Mrs Hiley must return the stock or its value to the company.