MacDonald & Ors v Carnbroe Estates Ltd [2017] ScotCS CSOH_8 (18 January 2017)

MacDonald & Ors v Carnbroe Estates Ltd [2017] ScotCS CSOH_8 (18 January 2017)

Carnbroe established that £550,000 constituted adequate consideration for the property given Grampian’s financial distress, lack of alternative offers, and the need for a quick sale, despite the price being below open market value.

Citation
[2017] ScotCS CSOH_8
Parties
Pursuer: Stewart MacDonald; Pursuer: Pamela Coyne; Company in Liquidation: Grampian MacLennan’s Distribution Services Limited; Defender: Carnbroe Estates Limited
Jurisdiction
Scotland
Judgment Date
18 January 2017
Procedural Posture
Civil / Judgment
Outcome
Defender succeeded; transaction upheld as not a gratuitous alienation.
Legal Topics
Gratuitous Alienation, Adequate Consideration, Distress Sale, Liquidation
Insolvency Property Law Gratuitous Alienation Adequate Consideration Distress Sale Liquidation

Case Brief

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Parties

Stewart MacDonald

Pursuer

Pamela Coyne

Pursuer

Grampian MacLennan’s Distribution Services Limited

Company in Liquidation

Carnbroe Estates Limited

Defender

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether the sale of property by Grampian to Carnbroe constituted a gratuitous alienation under section 242 of the Insolvency Act 1986
  2. 2 Whether Carnbroe provided adequate consideration for the property

Ratio Decidendi

Carnbroe established that £550,000 constituted adequate consideration for the property given Grampian’s financial distress, lack of alternative offers, and the need for a quick sale, despite the price being below open market value.

Court Disposition

Defender succeeded; transaction upheld as not a gratuitous alienation.

Orders

  • Case put out by order to discuss final orders.
  • Liquidators justified in raising the action due to initial inadequate consideration paid.