West Law Report

Trustee realised interest

Posted in Times Law Report by mrkooenglish on December 9, 2008

From The Times
December 9, 2008
Trustee realised interest

Chancery Division
Published December 9, 2008
Lewis and Another v Metropolitan Property Realizations Ltd

A trustee in bankruptcy who sold the estate’s interest for deferred contingent consideration “realised” the interest within the meaning of section 283A(3)(a) of the Insolvency Act 1986.

There was nothing in section 283A, introduces by section 261 of the Enterprise Act 2002, requiring any realisation for the purposes of that section to be on terms more restrictive than those available to the trustee generally under the 1986 Act.

Mrs Justice Proudman so held in the Chancery Division on November 21, 2008, when rejecting an application by Paul Warren Lewis and Gonda Taryn Lewis that the interest of Mr Lewis, a former bankrupt, in their dwelling house had reverted to him and had not been realised in favour of the respondent, Metropolitan Property Realizations Ltd.

HER LADYSHIP said that section 283A (3)(a) required only the estate’s interest in the property to be realised, not, where there were co-owners, the underlying property itself.

The joint trustees had assigned all the estate’s interest in return for the assignee’s obligation to pay them consideration at some future time and on a contingent event.

Her Ladyship therefore concluded that the joint trustees had realised the interest by a sale, notwithstanding that the tenure of the bankrupt and his family in the property remained precarious.

The potential future sale of the property was merely a byproduct of the fact that it was the interest, and not the property itself, which had been realised.

It was wrong in principle to treat the trustee who disposed of the interest for deferred consideration as being in the same position as the trustee who, prior to section 283A, chose to defer a sale.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: