0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

transaction at undervalue – does the company in liquidation have to be a party to the transaction?

20 November 2013

In Stephen John Hunt (Liquidator of Ovenden Colbert Printers Ltd) [2013], the Court of Appeal held that it was an essential part of any claim under s.238 of the Insolvency Act 1986 that the company had itself entered into a transaction.

This case concerned money held on trust by the company’s accountant who was allowed to transfer his agreed fees from that account but nothing further without express authority. Payments were made in excess of the agreed fees and also to the defendant. A claim was therefore brought against the defendant under s.238 and s.241.

The defendant, on a strike out application, submitted that the company did not actually enter into a transaction with the defendant. At first instance, Peter Smith J held that the claim had no prospect of success.

On appeal, the first instance decision was unanimously upheld. The payments from the client account were not transactions entered into by the company as there had to be the taking of some step or act of participation by the company.

This case highlights the importance of analysing the parties to a transaction before proceeding with a claim.

related opinions

Can an application to postpone a hearing be refused?

This case highlights the importance of Claimants obtaining their own medical evidence in such matters especially when it is pivotal to their claim.

View blog

A landlord’s promise, a tenant’s power

When it comes to leases, most people believe that landlords hold most of the power. However, in relation to long residential leases, the tables may well have recently turned in one respect at least following a recent Supreme Court decision.

View blog

High Court extends employer’s duty of care to Dubai whistleblower

Employers with global networks which include a base in the UK should be aware that they can face expensive and damaging negligence claims from employees who are based overseas regardless of the whistleblowing regime.

View blog

A year on: the Capped Costs Pilot Scheme

On 14 January 2019 a Capped Costs Pilot Scheme was introduced in the Leeds and Manchester Business and Property Courts, and has been set to run for two years.

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up