Ramlort Ltd v Reid

Ramlort Ltd v Reid

The Declaration of Trust was a transaction at an undervalue because the value of the policy (minimum £10,000) was significantly more than the consideration provided by Ramlort (£3,000). The appropriate remedy was to set aside the Declaration of Trust, restore the policy proceeds to the estate, and order repayment to Ramlort of the sums it paid, with interest.

Parties
Appellant: Ramlort Ltd; Respondent: Michael James Meston Reid
Jurisdiction
England and Wales
Judgment Date
06 July 2004
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal dismissed (save for interest variation)
Legal Topics
Transaction at an Undervalue, Bankruptcy, Remedies for Undervalue Transactions, Valuation of Assets in Insolvency, Setting Aside Transactions, Restitution
Insolvency Law Trusts Law Transaction at an Undervalue Bankruptcy Remedies for Undervalue Transactions Valuation of Assets in Insolvency Setting Aside Transactions Restitution

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Parties

Ramlort Ltd

Appellant

Michael James Meston Reid

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether the Declaration of Trust was a transaction at an undervalue under section 339 of the Insolvency Act 1986
  2. 2 How to value the consideration and the policy for the purposes of section 339
  3. 3 What is the appropriate remedy if a transaction at an undervalue is found

Ratio Decidendi

The Declaration of Trust was a transaction at an undervalue because the value of the policy (minimum £10,000) was significantly more than the consideration provided by Ramlort (£3,000). The appropriate remedy was to set aside the Declaration of Trust, restore the policy proceeds to the estate, and order repayment to Ramlort of the sums it paid, with interest.

Court Disposition

Appeal dismissed (save for interest variation)

Orders

  • Paragraph 2 of the High Court order varied to provide Ramlort with interest on the sums repaid (£1,515)
  • Declaration of Trust set aside; policy proceeds held on trust to repay Ramlort £1,900 and £1,100 plus interest, balance to Mr Reid as judicial factor