Henderson v Foxworth Investments Ltd & Anor [2013] ScotCS CSIH_13 (01 March 2013)

Henderson v Foxworth Investments Ltd & Anor [2013] ScotCS CSIH_13 (01 March 2013)

The court held that the Lord Ordinary was entitled, on the evidence, to find that the standard security was granted for value and in good faith, and that the knowledge of Mr Liu could be attributed to Foxworth. The liquidator failed to demonstrate that the findings were perverse or that the Lord Ordinary had gone plainly wrong. The reclaiming motion was refused.

Citation
[2013] ScotCS CSIH_13
Parties
Pursuer and Reclaimer: Matthew Purdon Henderson (Liquidator of Letham Grange Development Company Limited); First Defender and Respondent: Foxworth Investments Limited; Second Defender and Respondent: 3052775 Nova Scotia Limited
Jurisdiction
Scotland
Judgment Date
01 March 2013
Procedural Posture
Civil Appeal (reclaiming Motion) / Inner House, Court of Session (appeal From Lord Ordinary)
Outcome
Reclaiming motion refused; interlocutor of Lord Ordinary affirmed.
Legal Topics
Reduction of Standard Security, Gratuitous Alienation, Unfair Preference, Good Faith and Value in Insolvency, Attribution of Knowledge to Companies, Sham Transactions
Insolvency Law Property Law Company Law Reduction of Standard Security Gratuitous Alienation Unfair Preference Good Faith and Value in Insolvency Attribution of Knowledge to Companies +1 more

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Parties

Matthew Purdon Henderson (Liquidator of Letham Grange Development Company Limited)

Pursuer and Reclaimer

Foxworth Investments Limited

First Defender and Respondent

3052775 Nova Scotia Limited

Second Defender and Respondent

Procedural Posture

Civil Appeal (reclaiming Motion) / Inner House, Court of Session (appeal From Lord Ordinary)

Legal Issues

  1. 1 Whether the standard security granted by NSL to Foxworth was acquired in good faith and for value under sections 242(4) and 243(5) of the Insolvency Act 1986
  2. 2 Whether the transactions constituted a gratuitous alienation or unfair preference
  3. 3 Whether knowledge of Mr Liu could be attributed to Foxworth for the purposes of good faith

Ratio Decidendi

The court held that the Lord Ordinary was entitled, on the evidence, to find that the standard security was granted for value and in good faith, and that the knowledge of Mr Liu could be attributed to Foxworth. The liquidator failed to demonstrate that the findings were perverse or that the Lord Ordinary had gone plainly wrong. The reclaiming motion was refused.

Court Disposition

Reclaiming motion refused; interlocutor of Lord Ordinary affirmed.

Orders

  • Refusal of decree of reduction of the standard security dated 6 January 2003
  • Affirmation of Lord Ordinary's interlocutor of 12 April 2011