Adrian Hyde v Geoffrey Lee Stunt

Under the Sale of Goods Act 1979, the contractual buyer must be identified separately from the person who ultimately has the beneficial interest. Payment by a third party does not, by itself, establish that payer as the buyer. Where a father pays for goods bought by his adult child, the presumption of advancement may give rise to a presumed gift, unless rebutted by sufficient evidence of a different intention. Documentary evidence created directly from the sale may outweigh recollections of an oral agreement made many years earlier. A restraint-order exclusion affecting bankrupt estate property ceases when the property is removed from the order, after which the ordinary vesting provisions apply.

Adrian Hyde, as joint trustee in bankruptcy of James Stunt, sought declarations that a Van Dyck painting formed part of the bankrupt’s estate. Geoffrey Stunt claimed that he had personally negotiated and paid for the painting in January 2013 and was its legal and beneficial owner.

The evidence included an invoice and export documents identifying James Stunt as buyer or owner, together with a cheque for £600,000 drawn on Geoffrey Stunt’s account. The court also considered the effect of a restraint order made under the Proceeds of Crime Act 2002, the operation of bankruptcy vesting provisions, and whether payment by a father for property bought by his son was a gift or gave rise to a resulting trust.

1. Restraint order and vesting. Property of the bankruptcy estate vests in the trustee under section 306 of the Insolvency Act 1986, subject to statutory exclusions. Property subject to a restraint order was excluded only while it was “for the time being” subject to that order. When the painting was removed from the order by variation, the exclusion ceased and section 306 applied.
2. Contractual buyer. Under sections 2, 17 and 18 of the Sale of Goods Act 1979, the contractual buyer was the person who agreed to buy the specific goods. The court found that property was intended to pass when the price was paid in cleared funds. The invoice and export documentation, created as a direct consequence of the transaction, identified James Stunt as buyer or owner and outweighed the competing recollections. Geoffrey Stunt’s payment established only that he paid the contractual liability of the buyer; it did not establish that he was the buyer.
3. Beneficial ownership. Since James Stunt was the buyer and no agency case was advanced, payment by his father engaged the rebuttable presumption of advancement. The evidence did not rebut that presumption. Geoffrey Stunt had not supplied sufficient evidence of an investment intention, financial arrangements, or other circumstances showing that the painting was to be held for him rather than gifted to his son.
4. The court therefore concluded, on the balance of probabilities, that James Stunt was the contracting buyer, did not hold the beneficial interest on trust for his father, and that the painting formed part of the bankruptcy estate.