Hellard v Michael & Anor [2009] EWHC 2414 (Ch) (16 July 2009)

Hellard v Michael & Anor [2009] EWHC 2414 (Ch) (16 July 2009)

The bidding process was materially unfair to Mr Michael because Fairview was informed of a cap on trustee's costs while Mr Michael was not, affecting the formulation of bids. The court set aside the outcome of the first bid process and ordered a new, fair bidding process with clear, common terms. The trustee's commercial judgment on the structure of the new process was upheld.

Citation
[2009] EWHC 2414 (Ch)
Parties
Applicant: Kevin John Hellard; First Respondent: Spencer Michael; Second Respondent: Fair View New Homes Farnborough Limited
Jurisdiction
England and Wales
Judgment Date
16 July 2009
Procedural Posture
Application for Directions by Trustee in Bankruptcy / Judgment on Application for Directions Regarding Assignment/compromise of Counterclaim
Outcome
Application granted in part; original bid process set aside; new bidding process ordered; no order as to costs between Mr Michael and Fairview; permission to appeal refused.
Legal Topics
Trustee's Powers, Assignment of Claims, Fair Bidding Process, Court Supervision of Trustees, Compromise of Claims
Insolvency Bankruptcy Civil Procedure Trustee's Powers Assignment of Claims Fair Bidding Process Court Supervision of Trustees Compromise of Claims

Case Brief

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Parties

Kevin John Hellard

Applicant

Spencer Michael

First Respondent

Fair View New Homes Farnborough Limited

Second Respondent

Procedural Posture

Application for Directions by Trustee in Bankruptcy / Judgment on Application for Directions Regarding Assignment/compromise of Counterclaim

Legal Issues

  1. 1 Whether the trustee in bankruptcy conducted a fair bidding process for assignment/compromise of a counterclaim asset
  2. 2 Whether the court should approve the trustee's proposed assignment to Fairview or require a new bidding process
  3. 3 Whether assignment of a counterclaim to the defendant is legally permissible

Ratio Decidendi

The bidding process was materially unfair to Mr Michael because Fairview was informed of a cap on trustee's costs while Mr Michael was not, affecting the formulation of bids. The court set aside the outcome of the first bid process and ordered a new, fair bidding process with clear, common terms. The trustee's commercial judgment on the structure of the new process was upheld.

Court Disposition

Application granted in part; original bid process set aside; new bidding process ordered; no order as to costs between Mr Michael and Fairview; permission to appeal refused.

Orders

  • The outcome of the first bid process is set aside.
  • A new round of bidding for the assignment/compromise of the counterclaim is ordered, with clear terms as set out in the trustee's draft order and schedule.