Thomas and another v D’eye and others
The bankrupt ran a property business and used an SPV company for each property. He failed to keep proper accounts or to keep the companies money separate. Some of the SPV’s did not have separate bank accounts and the bankrupt aggregated the money received from these SPV’s to use as working capital. After the crisis in 2008, a number of these SPV companies went into administration and in 2012 a bankruptcy order was made on the basis of personal guarantees given by the bankrupt in the sum of £2.88 million.
A few months before being made bankrupt, he withdrew £321,919 from his bank account and paid it into an account in the name of his father. Part of this money was used to purchase a flat in the name of the bankrupt’s wife.
The applicant claimed that the money in the bankrupt’s father’s account was a bankruptcy asset, along with the flat which was purchased with money from that account.
The High Court held that the father held the relevant account as nominee only and that on the balance of probabilities, the money in the account had belonged to the bankrupt.
Under section 284 of the Insolvency Act 1986 (Act), where a person is adjudged bankrupt, any disposition of property made by that person in the period to which this section applies is void. In addition, any disposition of property is void under this section notwithstanding that the property is not or, as the case may be, would not be comprised in the bankrupt’s estate.
The court looked to both section 284 and section 306 of the Act and applied Pettit v Novakovic  B.C.C. 462. Here it was noted that the remedy was the same in relation to both the period after presentation and after vesting under section 306 of the Act – to seek an account of money had and received.
The decision was taken by Chief Bankruptcy Registrar Baister, therefore carries some weight. It will be interesting to see if any other matters arise under section 284 of the Act and whether this case is applied elsewhere.