YVONNE QUINN AS TRUSTEE IN THE SEQUESTRATED ESTATE OF JOHN O'BOYLE AGAINST KAREN BRENNAN [2020] ScotCS CSIH_3 (23 October 2019)

YVONNE QUINN AS TRUSTEE IN THE SEQUESTRATED ESTATE OF JOHN O'BOYLE AGAINST KAREN BRENNAN [2020] ScotCS CSIH_3 (23 October 2019)

A payment made to the debtor after his discharge from sequestration cannot constitute adequate consideration for a prior alienation, as it does not accrue to the estate vested in the trustee for creditors; consideration must be contemporaneous and reciprocal to the alienation, not retrospective or unilateral.

Citation
[2020] ScotCS CSIH_3
Parties
Pursuer and Respondent: Yvonne Quinn as Trustee in the sequestrated estate of John O'Boyle; Defender and Reclaimer: Karen Brennan
Jurisdiction
Scotland
Judgment Date
23 October 2019
Procedural Posture
Commercial Action (challenge to Alienation Under Bankruptcy Law) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Reclaiming motion refused; Lord Ordinary's interlocutor affirmed.
Legal Topics
Gratuitous Alienation, Adequate Consideration, Sequestration, Restoration of Property, Dual Patrimonies
Insolvency Bankruptcy Trusts Gratuitous Alienation Adequate Consideration Sequestration Restoration of Property Dual Patrimonies

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Parties

Yvonne Quinn as Trustee in the sequestrated estate of John O'Boyle

Pursuer and Respondent

Karen Brennan

Defender and Reclaimer

Procedural Posture

Commercial Action (challenge to Alienation Under Bankruptcy Law) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether subsequent repayment to debtor constitutes adequate consideration for a prior gratuitous alienation under s.34 Bankruptcy (Scotland) Act 1985
  2. 2 Whether payment to a discharged bankrupt can amount to consideration for an alienation made prior to sequestration

Ratio Decidendi

A payment made to the debtor after his discharge from sequestration cannot constitute adequate consideration for a prior alienation, as it does not accrue to the estate vested in the trustee for creditors; consideration must be contemporaneous and reciprocal to the alienation, not retrospective or unilateral.

Court Disposition

Reclaiming motion refused; Lord Ordinary's interlocutor affirmed.

Orders

  • Declarator granted that payment of £190,960 was a gratuitous alienation.
  • Defender ordered to pay £190,960 to the pursuer.