Stak Realty Group Co Ltd v McKenna [2010] ScotCS CSOH_29 (11 March 2010)

Stak Realty Group Co Ltd v McKenna [2010] ScotCS CSOH_29 (11 March 2010)

Mrs McKenna failed to prove that she gave adequate consideration for the payments received from STAK, except for £150,000 justified as repayment of advances. The remainder constituted unjust enrichment and a transaction at undervalue under section 242 of the Insolvency Act 1986, as STAK's liabilities exceeded its assets at the relevant times.

Citation
[2010] ScotCS CSOH_29
Parties
Pursuer: STAK Realty Group Co Limited (in administration); Pursuer: James Bernard Stephen; Pursuer: David John Hill; Defender: Diana Margaret McKenna
Jurisdiction
Scotland
Judgment Date
11 March 2010
Procedural Posture
Civil / Judgment After Proof
Outcome
Decree for pursuers in the sum of £660,000 plus interest as concluded for.
Legal Topics
Unjust Enrichment, Director's Duties, Transactions at Undervalue, Section 242 Insolvency Act 1986, Burden of Proof in Insolvency Proceedings
Insolvency Company Law Unjust Enrichment Director's Duties Transactions at Undervalue Section 242 Insolvency Act 1986 Burden of Proof in Insolvency Proceedings

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Parties

STAK Realty Group Co Limited (in administration)

Pursuer

James Bernard Stephen

Pursuer

David John Hill

Pursuer

Diana Margaret McKenna

Defender

Procedural Posture

Civil / Judgment After Proof

Legal Issues

  1. 1 Whether Mrs McKenna was unjustly enriched by payments from STAK Realty Group Co Limited
  2. 2 Whether payments to Mrs McKenna were made for adequate consideration under section 242 of the Insolvency Act 1986
  3. 3 Whether STAK's liabilities exceeded its assets at the time of the payments

Ratio Decidendi

Mrs McKenna failed to prove that she gave adequate consideration for the payments received from STAK, except for £150,000 justified as repayment of advances. The remainder constituted unjust enrichment and a transaction at undervalue under section 242 of the Insolvency Act 1986, as STAK's liabilities exceeded its assets at the relevant times.

Court Disposition

Decree for pursuers in the sum of £660,000 plus interest as concluded for.

Orders

  • Mrs McKenna to pay £660,000 to the pursuers, being the sum sued for less £150,000 justified, plus interest.