Key Facts
- •Mr. Adrian Hyde and Mr. Richard Toone (trustees in bankruptcy of Mr. Myck Djurberg) applied for a £217,990.71 settlement payment made to Mr. Djurberg.
- •The payment stemmed from a settlement agreement concerning a property sale where Mr. Djurberg was a party.
- •The trustees argued the payment was after-acquired property of the bankrupt and should be part of the bankruptcy estate.
- •Multiple respondents received portions of the settlement payment, and the funds were quickly dissipated.
- •Several respondents failed to appear at trial, leading to challenges in admissibility of their witness statements.
- •The court considered issues of beneficial ownership, consideration for relinquishing interest, and potential fraudulent intent under the Insolvency Act 1986.
Legal Principles
After-acquired property of a bankrupt vests in the trustee.
Insolvency Act 1986, s. 307
Transactions at an undervalue can be set aside if done to prejudice creditors.
Insolvency Act 1986, s. 423
A party receiving property in good faith, for value, and without notice of bankruptcy is protected.
Insolvency Act 1986, s. 307(4)
Witness statements from absent parties may be disregarded or treated as hearsay.
CPR r. 32.5, CPR r. 33
Outcomes
The settlement payment was deemed after-acquired property of the bankrupt.
The court found the bankrupt was the beneficial owner, and the payment was made to avoid creditors. The respondents failed to demonstrate good faith, value, and lack of notice.
The witness statements of several respondents were inadmissible.
Due to the non-appearance of the respondents and concerns regarding authorship and accuracy, the statements could not be reliably used without cross-examination.
Section 423 of the Insolvency Act 1986 did not need to be considered.
The court's decision on after-acquired property made consideration of section 423 unnecessary.