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Hill v Haines revisited: setting aside transactions made in ancillary relief proceedings

Amanda Eilledge examines the recent High Court decision of Sands (as trustee in bankruptcy of Mr Tarlochan Singh) v Singh and ors [2016] EWHC 636 (Ch) 22/3/16.

Insolvency – Transactions at an Undervalue s.339 Insolvency Act 1986 – Ancillary Relief – Hill v Haines [2008] Ch.412 – Sham Transactions.

Summary

For obvious reasons a trustee in bankruptcy will be keen to set aside any property transaction where the value of the consideration given is either nil or significantly less than the value of the property. The decision of the Court of Appeal in Hill v Haines [2008] Ch.412, makes plain the difficulties involved where the transaction in question is an Ancillary Relief (“AR”) settlement entered into prior to bankruptcy. Now the Court in Sands v Singh has held that, absent fraud or collusion, a transferee under a transfer made in AR proceedings is generally to be regarded as having given consideration equivalent to the value of the property being transferred. 

The Sands v Singh case will be of interest to insolvency practitioners and their lawyers looking for ways to distinguish  the decision in Hill v Haines.

Read Amanda's full article