Breese (Liquidator of Flexi Containers Ltd) v Hiley & Ors

Breese (Liquidator of Flexi Containers Ltd) v Hiley & Ors

The court found Mrs Hiley was a connected person at the time of the stock transfer, which was both a preference and a transaction at an undervalue under ss238 and 239 IA 1986. The floating charges were invalid under s245. The company was insolvent at the relevant time. The transfer improved Mrs Hiley’s position over other creditors and was not in the company’s best interests.

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
Outcome
Claims for preference and transaction at undervalue upheld against Mrs Hiley.
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

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 9 Party arguments 2 Amounts and remedies 8
Sign in to unlock

Parties

Kate Elizabeth Breese

Applicant

Alison Helen Hiley

1st Respondent

Abby Hiley

2nd Respondent

Alexander Philip Hiley

3rd Respondent

Procedural Posture

Insolvency Application / Judgment

Legal Issues

  1. 1 Whether the transfer of trading stock to Mrs Hiley amounted to a preference under s239 Insolvency Act 1986
  2. 2 Whether the transaction was at an undervalue under s238 Insolvency Act 1986
  3. 3 Whether Mrs Hiley was a connected person at the relevant time

Ratio Decidendi

The court found Mrs Hiley was a connected person at the time of the stock transfer, which was both a preference and a transaction at an undervalue under ss238 and 239 IA 1986. The floating charges were invalid under s245. The company was insolvent at the relevant time. The transfer improved Mrs Hiley’s position over other creditors and was not in the company’s best interests.

Court Disposition

Claims for preference and transaction at undervalue upheld against Mrs Hiley.

Orders

  • Parties invited to agree a form of order restoring the position as if the transaction had not occurred.
  • Undertakings by 2nd and 3rd Respondents to be addressed in further proceedings.