Wood v Lowe & Ors

Ownership of chattels found in a bankrupt’s home is determined primarily by the evidence identifying the true owner. Any presumption arising from occupation or ownership of the premises is, at most, weak and cannot replace an item-by-item assessment. A gift requires intention and delivery, including effective transfer of control; symbolic delivery is sufficient only in appropriate circumstances. Tools and equipment remain exempt under Insolvency Act 1986, s283(2), where they support the bankrupt’s earning capacity, even during temporary ill health. Findings concerning persons who should have been joined do not finally determine their proprietary rights.

The Applicant, Christopher Wood, trustee in bankruptcy of Keith Lowe, sought declarations identifying the bankrupt’s proprietary interests in numerous chattels listed in a further inventory. Mr Lowe’s wife and daughter claimed ownership of various items, while several other alleged owners were not joined. The application also sought permission to seize and sell items found to belong wholly or partly to the bankrupt. The central issues were the evidential approach to ownership, the effect of alleged gifts, the treatment of jointly purchased goods, and the statutory exemptions from the bankrupt’s estate.

1. The application was determined item by item. The bankrupt’s estate comprised property belonging to him at the commencement of bankruptcy under Insolvency Act 1986, s283(1), subject to the statutory exclusions in s283(2).
2. The court rejected the submission that chattels located in premises owned by the bankrupt were presumed to belong to him. South Staffordshire Water Company v Sharman and Re Cohen concerned materially different circumstances. Even if a presumption existed, it was very weak. Ownership depended on which party produced the better evidence of the true owner.
3. An alleged gift required both intention and delivery. Delivery could be symbolic where the goods were bulky, or could consist of a declaration where the donee was already in possession. But there had to be an unequivocal transfer of control. The alleged gifts of Beatles memorabilia, a jukebox and other items left in the bankrupt’s possession were not perfected.
4. The evidence of several family members was inconsistent and unconvincing. In circumstances where an alleged gift was challenged by a trustee in bankruptcy, the court was entitled to approach the evidence with particular scepticism. The court accepted some assertions of ownership, rejected others, and made findings according to the evidence relating to each item.
5. Under s283(2), tools and equipment used for the bankrupt’s trade remained exempt. The exemption did not cease merely because illness temporarily prevented physical use. It could also apply where the tools supported a business in which another person used them, provided they retained their capacity to facilitate the bankrupt’s earning power.
6. Money drawn from a joint account did not itself determine ownership. Applying Re Bishop (Deceased), the relevant question was the parties’ intention, assessed with the item’s use and circumstances of acquisition. The Nissan Cabstar was therefore jointly owned and the bankrupt’s half share vested in the Trustee.
7. Findings could not compromise the rights of non-joined alleged owners. Any later determination made in proceedings to which such a person was a party would take precedence so far as that person’s rights were concerned. Declarations and permission to seize were granted only to the extent identified in the itemised findings.

First-instance decision. No appellate history was stated in the judgment.