Property held on constructive trust or transaction at undervalue? (Palmer and another (in their capacity as joint trustees in bankruptcy of Shaun Collins) v Sans)
Restructuring & Insolvency analysis: The High Court in Palmer and another (in their capacity as joint trustees in bankruptcy of Shaun Collins) v Sans deals with the question of whether the bankrupt (Mr Collins) held the property being Flat 2, Chestnut House, Whimbrel, London, SE28 8JE (the property), on trust for the respondent (Mr Sans) as at the time it was acquired by the bankrupt in 2013. The High Court held that the particular facts of this case support the creation of a trust, such that the property was held on a constructive trust for the benefit of the respondent. As the beneficial interest was already vested in the respondent, the legal transfer was irrelevant under section 339 of the Insolvency Act 1986 (IA 1986), as on the true analysis, the transfer was merely a formality. Accordingly, the trustees in bankruptcy’s application pursuant to IA 1986, s 339 failed. Written by Katherine Traynor, barrister at Landmark Chambers.
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