Thompson, Accountant In Bankruptcy v. Sneddon & Anor [2008] ScotCS CSOH_11 (18 January 2008)

Thompson, Accountant In Bankruptcy v. Sneddon & Anor [2008] ScotCS CSOH_11 (18 January 2008)

Where a claim exists at the date of alienation, even if not yet quantified, it must be included in the balance sheet test for insolvency under section 34. The subsequent quantification of the claim by decree is drawn back to the relevant date. The defender made no relevant averments of solvency, and the statutory defence fails.

Citation
[2008] ScotCS CSOH_11
Parties
Pursuer: Gillian Thompson, Accountant in Bankruptcy; First Defender: Stella Rae Sneddon; Second Defender: The Keeper of the Registers of Scotland
Jurisdiction
Scotland
Judgment Date
18 January 2008
Procedural Posture
Civil / Interlocutory Judgment on Relevancy and Partial Proof Before Answer
Outcome
Decree granted in favour of the pursuer in terms of the first and second conclusions; certain averments excluded from probation; proof before answer allowed on the Falkirk property issue.
Legal Topics
Challenge to Gratuitous Alienation, Balance Sheet Insolvency Test, Section 34 Bankruptcy (scotland) Act 1985, Valuation of Illiquid Claims
Bankruptcy Property Law Challenge to Gratuitous Alienation Balance Sheet Insolvency Test Section 34 Bankruptcy (scotland) Act 1985 Valuation of Illiquid Claims

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Parties

Gillian Thompson, Accountant in Bankruptcy

Pursuer

Stella Rae Sneddon

First Defender

The Keeper of the Registers of Scotland

Second Defender

Procedural Posture

Civil / Interlocutory Judgment on Relevancy and Partial Proof Before Answer

Legal Issues

  1. 1 Whether the alienation of property by the debtor to his mother was challengeable under section 34 of the Bankruptcy (Scotland) Act 1985
  2. 2 Whether the mother could establish the statutory defence that the debtor was solvent at the date of alienation

Ratio Decidendi

Where a claim exists at the date of alienation, even if not yet quantified, it must be included in the balance sheet test for insolvency under section 34. The subsequent quantification of the claim by decree is drawn back to the relevant date. The defender made no relevant averments of solvency, and the statutory defence fails.

Court Disposition

Decree granted in favour of the pursuer in terms of the first and second conclusions; certain averments excluded from probation; proof before answer allowed on the Falkirk property issue.

Orders

  • Sustain pursuer's first and third pleas-in-law; grant decree in terms of first and second conclusions.
  • Sustain pro tanto the second plea-in-law in relation to Glenrothes; delete specified averments in Answer 6(C) from probation.