(1)An application for an order under section 423 shall not be made in relation to a transaction except—
(a)in a case where the debtor has been made bankrupt or is a body corporate which is being wound up or is in administration , by the official receiver, by the trustee of the bankrupt’s estate or the liquidator or adminstrator of the body corporate or (with the leave of the court) by a victim of the transaction;
(b)in a case where a victim of the transaction is bound by a voluntary arrangement approved under Part I or Part VIII of this Act, by the supervisor of the voluntary arrangement or by any person who (whether or not so bound) is such a victim; or
(c)in any other case, by a victim of the transaction.
(2)An application made under any of the paragraphs of subsection (1) is to be treated as made on behalf of every victim of the transaction.
Cases considering section 424 64
[2006] EWCA Civ 542 · 12 May 2006Interprets
Section 424 governs who may bring a section 423 application and confirms its collective character. It was central to the limitation issue concerning an application by a trustee in bankruptcy. (see paras [104]; [119]-[129]; [142]-[150])
The provision specifies the persons entitled to apply. The majority held that a trustee in bankruptcy’s entitlement arises on the bankruptcy order, so the trustee’s limitation period began then. (see paras [142]-[150])
For a trustee in bankruptcy, the majority held that the bankruptcy order identifies the person entitled to apply and is an ingredient of that trustee’s cause of action. (see paras [142]-[152])
Cited only.
The court considered the unrestricted right of a victim to apply when assessing the collective nature and limitation consequences of the remedy. (see paras [112]; [121]-[129])
An application is treated as made for every victim. The majority held that this ensures non-applying victims share the benefit; it does not create a single cause of action for all possible applicants. (see paras [146]-[149])
[2005] EWCA Civ 308 · 16 February 2005Limits
Applied to identify who could apply for relief under section 423. In the relevant case, an application could be made by a victim of the transaction. (see paras [38]-[41])
Applied to restrict applications under section 423 to the statutory categories of applicant, including a victim of the transaction in the relevant case. (see paras [38]-[41])
Applied to treat a victim of the transaction as an eligible applicant for relief. Both nursing-home operators fell within that category because they were capable of being prejudiced. (see paras [38]-[41], [45])
[2002] EWCA Civ 1315 · 22 August 2002Limits
The court treated the mortgagee’s possession and sale of charged property to reduce its debt as an exercise of mortgage rights, not a gift or transfer at an undervalue. The proposed claim therefore had no real prospect of success under section 424.
44 more judgments, and what each says about section 424, are in the
case-law panel in the full Act.