Papanicola v Fagan [2008] EWHC 3348 (Ch) (20 November 2008)

Papanicola v Fagan [2008] EWHC 3348 (Ch) (20 November 2008)

The declaration of trust was not a transaction at an undervalue because the wife gave valuable consideration by forbearing from divorce and ancillary relief proceedings; further, the bankrupt's substantial purpose was to save his marriage, not to put assets beyond the reach of creditors, so the statutory requirements of sections 339 and 423 of the Insolvency Act 1986 were not satisfied.

Citation
[2008] EWHC 3348 (Ch)
Parties
Applicant (trustee in Bankruptcy): T Papanicola; Respondent: PG Fagan
Jurisdiction
England and Wales
Judgment Date
20 November 2008
Procedural Posture
Insolvency Application / Judgment After Trial
Outcome
Application dismissed
Legal Topics
Transaction at Undervalue, Bankruptcy, Declaration of Trust, Consideration in Matrimonial Context, Purpose of Transaction Under Insolvency Act
Insolvency Family Law Property Law Transaction at Undervalue Bankruptcy Declaration of Trust Consideration in Matrimonial Context Purpose of Transaction Under Insolvency Act

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Parties

T Papanicola

Applicant (trustee in Bankruptcy)

PG Fagan

Respondent

Procedural Posture

Insolvency Application / Judgment After Trial

Legal Issues

  1. 1 Whether the declaration of trust was a transaction at an undervalue under section 339 or 423 of the Insolvency Act 1986
  2. 2 Whether the transaction was entered into for the purpose of putting assets beyond the reach of creditors under section 423
  3. 3 Whether valuable consideration was given for the transfer

Ratio Decidendi

The declaration of trust was not a transaction at an undervalue because the wife gave valuable consideration by forbearing from divorce and ancillary relief proceedings; further, the bankrupt's substantial purpose was to save his marriage, not to put assets beyond the reach of creditors, so the statutory requirements of sections 339 and 423 of the Insolvency Act 1986 were not satisfied.

Court Disposition

Application dismissed