Cartwright v Panelform Ltd & Ors [2020] EWHC 2655 (Ch) (07 October 2020)

Cartwright v Panelform Ltd & Ors [2020] EWHC 2655 (Ch) (07 October 2020)

The court found that Mr Cartwright and his family entered into a series of transactions transferring the business and assets of Panelcraft Access Panels to Panelform Ltd at a significant undervalue, with the principal purpose of putting those assets beyond the reach of creditors, particularly HMRC, in breach of s.423 Insolvency Act 1986. The court accepted the applicant's expert valuation evidence, rejected the respondents' explanations, and held that the applicant trustee was entitled to relief to restore the position as if the transactions had not occurred.

Citation
[2020] EWHC 2655 (Ch)
Parties
Applicant: Richard Paul Rendle; First Respondent: Panelform Ltd; Second Respondent: Panelcraft Access Panels (a firm); Third Respondent: Peggy Cartwright; Fourth Respondent: Lisa Cartwright; Fifth Respondent: Julie Cartwright
Jurisdiction
England and Wales
Judgment Date
07 October 2020
Procedural Posture
Insolvency Application (transactions at Undervalue) / Expedited Trial and Judgment
Outcome
Application granted
Legal Topics
Transactions at Undervalue, Fraudulent Conveyance, Trustee Powers, Partnership Dissolution
Insolvency Law Bankruptcy Transactions at Undervalue Fraudulent Conveyance Trustee Powers Partnership Dissolution

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Parties

Richard Paul Rendle

Applicant

Panelform Ltd

First Respondent

Panelcraft Access Panels (a firm)

Second Respondent

Peggy Cartwright

Third Respondent

Lisa Cartwright

Fourth Respondent

Julie Cartwright

Fifth Respondent

Procedural Posture

Insolvency Application (transactions at Undervalue) / Expedited Trial and Judgment

Legal Issues

  1. 1 Whether the transfer of business and assets to Panelform Ltd constituted transactions at an undervalue under s.423 Insolvency Act 1986
  2. 2 Whether the purpose of the transactions was to put assets beyond the reach of creditors or to prejudice their interests
  3. 3 Whether the applicant trustee had standing to seek relief under s.423

Ratio Decidendi

The court found that Mr Cartwright and his family entered into a series of transactions transferring the business and assets of Panelcraft Access Panels to Panelform Ltd at a significant undervalue, with the principal purpose of putting those assets beyond the reach of creditors, particularly HMRC, in breach of s.423 Insolvency Act 1986. The court accepted the applicant's expert valuation evidence, rejected the respondents' explanations, and held that the applicant trustee was entitled to relief to restore the position as if the transactions had not occurred.

Court Disposition

Application granted

Orders

  • Assets of the unincorporated business revested in the partnership or bankruptcy estate as appropriate
  • Any right of Panelform Ltd to use or retain possession of such assets terminated