INTRODUCTION

The Insolvency Act 1986 provides to a trustee in bankruptcy in respect to the bankrupt estate, an armoury of potential actions. The main ones, focused on enhancing a depleted bankrupt estate, are: (a) s.339, entitled 'Transactions at an undervalue'; (b) s.340, entitled 'Preferences'; and (c) s.423, entitled 'Transactions defrauding creditors' (though note, no fraud need be shown; and this cause of action is not exclusive to trustees in bankruptcy).

This article will consider s.423 of the Insolvency Act 1986 (the '1986 Act') and, and in particular, whether there is any limitation on the trustee in bankruptcy ('TIB') bringing such a claim (under the Limitation Act 1980 (the '1980 Act') or otherwise). This question will be considered in light of:

(1) Aylott v. West Ham Corporation [1927] 1 Ch. 30 ('Aylott'), Court of Appeal (Lord Hanworth MR, Warrington LJ, Sargant LJ) decision on 12.5.1926;

(2) Letang v Cooper [1965] 1 QB 232 [1964] 3 WLR 573 ('Letang'), Court of Appeal (Lord Denning MR; Danckwerts LJ; Diplock LJ) decision on 15.6.1964;

(3) Collin v Duke of Westminster [1985] QB 581; [1985] 2 WLR 553 ('Collin'), Court of Appeal (Oliver LJ, May LJ and Sir Roger Ormrod) decision on 21.12.1984;

(4) Anwar v Giblett (also known as Re Priory Garage (Walthamstow)) ('Priory Garage') [2001] BPIR 144, High Court (Mr John Randall QC sitting as a deputy High Court Judge) on 23.5.00; 

(5) Law Society v Southall [2001] EWCA Civ 2001; [2002] BPIR 336 ('Southall'), Court of Appeal (Peter Gibson LJ; Mantell LJ; Wall J) on 14.12.01;

(6) Carman v Yates (also known as Re Yates (A Bankrupt)) [2004] EWHC 3448 (Ch); [2005] BPIR 476 ('Yates'), High Court (Charles J) on 8.11.04;

(7) Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871 ('Ridgeway'), Court of Appeal (Brooke LJ; Mummery LJ; Scott Baker LJ) decision on 10.2.05;

(8) Hill v Spread Trustee Co Ltd (also known as Re Nurkowski) [2005] EWHC 336 (Ch) [2005] BPIR 842 ('Hill 1st Instance'), High Court (HHJ Weeks QC sitting as a Judge of the High Court) on 11.2.05;

(9) Hill v Spread Trustee Co Ltd (also known as Re Nurkowski) [2006] EWCA Civ 542; [2007] 1 WLR 2404; [2007] 1 All ER 1106 ('Hill Appeal'), Court of Appeal (Waller LJ, Arden LJ, Sir Martin Nourse) on 12.5.06;

(10) Zedra Trust Co (Jersey) Ltd v THG plc [2024] EWCA Civ 158; [2024] Ch 318 ('Zedra'), Court of Appeal (Lewison LJ, Arnold LJ, Snowden LJ) decision on 23.2.24; note, on 23.5.24, the Supreme Court gave permission to appeal in Zedra; the substantive hearing was on 17-18.2.25; Supreme Court (Lord Hodge, Lord Lloyd-Jones, Lord Briggs, Lord Burrows, Lord Richards);  judgment is awaited.

(11) Malik v Messalti [2023] EWHC 553 (KB) ('Malik'), High Court (Master Dagnall) on 6.2.23;

(12) Lindsay v O’Loughnane [2024] EWHC 2232 (KB) ('Lindsay'), High Court (Master Dagnall) on 28.8.24;

(13) Savva v Cuckoo Hill Ltd [2025] EWHC 286 (Ch) ('Savva'), High Court (Master McQuail) on 26.2.25;

(14) Purkiss v Kennedy [2025] EWCA Civ 268 ('Purkiss'), Court of Appeal (Lewison LJ, Newey LJ, Jeremy Baker LJ) on 14.3.25.

For readers short on time, they may wish to read the sections entitled: (a) summary; (b) conclusion; (c) Hill Appeal (Hill Appeal being the leading authority in this area).

SUMMARY

In short, yes, the 1980 Act does apply to claims under s.423 of the 1986 Act. Where the claimant/applicant is the TIB, limitation period will start from the date the bankruptcy order was made (and not before), and will be 12 years under s.8(1) of the 1980 Act as a claim/action on a specialty, unless it falls within section 9(1) of the 1980 Act, as a claim/action is to recover a sum recoverable by virtue of any enactment - which has a 6 year limitation period. Where the main s.423 of the 1986 Act claim/action is, in substance, origin and/or essential nature, a claim/action to set aside a transaction, the 12 year limitation period will apply, where it is to recover monetary compensation, the 6 year limitation period will apply.

SECTION 423 OF THE INSOLVENCY ACT 1986

Section 423 of the 1986 Act is entitled 'Transactions defrauding creditors' and provides:

'(1) This section relates to transactions entered into at an undervalue; and a person enters into such a transaction with another person if-

(a) he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to receive no consideration;

(b) he enters into a transaction with the other in consideration of marriage; or

(c) he enters into a transaction with the other for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by himself.

(2) Where a person has entered into such a transaction, the court may, if satisfied under the next subsection, make such order as it thinks fit for-

(a) restoring the position to what it would have been if the transaction had not been entered into, and

(b) protecting the interests of persons who are victims of the transaction.

(3) In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose-

(a) of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or

(b) of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make.

(4) In this section 'the court' means the High Court or-

(a) if the person entering into the transaction is an individual, any other court which would have jurisdiction in relation to a bankruptcy petition relating to him;

(b) if that person is a body capable of being wound up under Part IV or V of this Act, any other court having jurisdiction to wind it up.

(5) In relation to a transaction at an undervalue, references here and below to a victim of the transaction are to a person who is, or is capable of being, prejudiced by it; and in the following two sections the person entering into the transaction is referred to as 'the debtor'.'

Section 423 of the 1986 Act is accompanied by: 

(a) section 424 of the 1986 Act, entitled 'Those who may apply for an order under s.423.';

'Section 424 sets out who may apply for an order under section 423. A victim may bring proceedings under section 424 as well as (say) a trustee in bankruptcy, but any application, by whomsoever brought must be brought on behalf of all the victims of the transaction.' - Arden LJ in Hill Appeal, paragraph 106;

(b) section 425 of the 1986 Act, entitled 'Provision which may be made by order under s.423.' 

'Section 425 sets out a non-exhaustive list of the orders that may be made under section 423' - Arden LJ in Hill Appeal, paragraph 105;

[wording for sections 424 and 425 can be found in a footnote[0]].

Newey LJ in Purkiss gave a pithy summary of some of the ingredients to a s.423 claim[0a].

LIMITATION

Limitation - Common law? Statutory? Limitation Act 1980

(1) The law of limitation in England Wales is not found in the common law. It is statutory. In Collin, Oliver LJ said, at 600:

'...the limitation of actions is entirely statutory and an action will be barred only if there is some period of limitation applicable to it under the statute.'

In Ridgeway, Mummery LJ said, at paragraph 2:

‘Limitation periods are prescribed by statute, not by the common law. The 1980 Act is the current statute of limitations.’

In Zehra, Lewison LJ said, at paragraph 19:

'There is no such thing as a common law limitation period. In relation to common law claims, limitation periods have been laid down by statute since 1623 (and in the case of land-related claims from even earlier). Currently they are contained in the Limitation Act 1980...Where, however, claims are brought for relief in equity which correspond to common law claims, courts of equity have applied common law limitation periods by analogy.'[1]

(2) 1980 Act is the main Act of Parliament. There are instances in other statutes of time bars in statutes/statutory instruments, but the 1980 Act is the general limitation Act. 

(3) In Letang, Diplock LJ, speaking of Limitation Act 1980's predecessor Limitation Act 1939 said, at 245-246:

'The Act is a limitation Act; it relates only to procedure. It does not divest any person of rights recognised by law; it limits the period within which a person can obtain a remedy from the courts for infringement of them. The mischief against which all limitation Acts are directed is delay in commencing legal proceedings; for delay may lead to injustice, particularly where the ascertainment of the relevant facts depends upon oral testimony.'

(4) the 1980 Act is structured into 3 parts (ignoring the 4 schedules): 

(a) Part 1 is entitled 'Ordinary time limits for different classes of action', and contains s.1 to s.27D;

(b) Part 2 is entitled 'Extension or exclusion of ordinary time limits', and contains s.28 to s.33B;

(c) Part 3 is entitled 'Miscellaneous and general', and contains s.34 to s.41;

(5) the application of Part 1 of the 1980 Act time limits, can be seen as '...the application of a bright line limitation period.' (Zehra, paragraph 21), rather than treated as an evaluative judgment for, say, laches (where the relief sought is equitable relief - Routledge v Skerritt [2019] BCC 812, paragraph 29) or the exercise of a discretion (for instance, under s.996 of the Companies Act 2006 ('2006 Act'), on a s.994 of the 2006 Act unfair prejudice petition - see In re Edwardian Group Ltd [2019] 1 BCLC 171, Fancourt J at paragraph 571))

(6) Lewison LJ in Zehra said, at paragraph 65:

'The 1980 Act imposes limitation periods in respect of different types of "action". Some of those actions are defined by reference to the underlying cause of action; while others are defined by reference to the remedy sought. Section 38(1) defines "action" so as to include "any proceeding in a court of law".'

As the discussion below of the caselaw on section 423 of the 1986 claims/actions (the words 'claim' and 'action' can, seemingly, be used interchangeably here; 'action' being defined by s.38(1) of the 1980 Act as to include 'any proceeding in a court of law')) will show, there are two relevant sections to the 1980 Act. These are sections 8 and 9 of the 1980 Act.

Limitation Act 1980 - Section 8(1)

Section 8 is entitled 'Time limit for actions on a specialty' and reads:

'(1) An action upon a specialty shall not be brought after the expiration of twelve years from the date on which the cause of action accrued.

(2) Subsection (1) above shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act.'

Limitation Act 1980 - Section 9(1)

Section 9 of the Limitation Act 1980 is entitled 'Time limit for actions for sums recoverable by statute' and provides:

'(1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.

(2) Subsection (1) above shall not affect any action to which section 10 or 10A of this Act applies.'[2]

Section 8(1) disapplied where Section 9(1) applies

Two points here:

(1) at first blush, from just reading s.8(1), there would appear to be significant overlap between the two sections:

(a) Section 9(1) speaks of 'An action to recover any sum recoverable by virtue of any enactment...'; whereas, 

(b) Section 8(1) speaks of 'An action upon a specialty...' - 

The word 'specialty' does not have a statutory definition. But, case law has defined it to mean: 

(i) action based on a contract under seal (Collin, 601G); and, importantly, for the purposes of this article, 

(ii) 'obligations imposed by statute.' (Collin, 601G); 

In Aylott, Lord Hanworth MR said at 50: 'where a plaintiff relies and has to rely upon the terms of a statute so that his claim is under the statute the nature of the claim is one of specialty'[3].

(2) But, as will be apparent, reading the whole of s.8 of the 1980 Act, s.8(2) is key here. Section 8(2) disapplies s.8(1), where the action is subject to another provision in the 1980 Act, which prescribes a shorter period of limitation. Since s.9(1) prescribes a shorter period of limitation - 6 years, as opposed to s.8(1)'s, 12 years, where both section 8(1) and 9(1) would apply, section 9(1) is applied and s.8(2) disapplies s.8(1).

(3) s.9(1) is narrower in scope that s.8(1), and focuses on what remedy is sought - particularly, the type of remedy sought. The important narrowing words are '...to recover any sum recoverable...' within s.9(1):

(a) 'An action' and 'An action' are clearly the same (both defined, as stated, by s.38(1) of the 1980 Act; and 

(b) 'by virtue of any enactment' and 'upon a specialty' are very similar (ignoring the irrelevant fact that 'specialty' has a wider meaning that just a claim under a statute - see Collin)). 

To come within s.9(1), the claim proposed, must be to recover a sum[4].

LIMITATION AND SECTION 423 CLAIMS/ACTIONS

While there are some interesting passages in: (a) Priory Garage[5]; (b) Yates[6], it is most helpful to start (and end) with Hill 1st Instance, and then Hill Appeal.

Hill 1st Instance

On 10.3.89, a Mr Nurkowski placed some land he owned, into a trust (a settlement)(paragraph 1; page 1).

On 28.1.99, Mr Nurkowski was adjudged bankrupt (the 'Bankrupt')(the date of the bankruptcy order). Subsequently, a trustee in bankruptcy ('TIB') was appointed (Mr Hill). On 4.12.02, 3 years 10 months after the date of the bankruptcy order, the TIB issued[7] a claim against the Bankrupt, (amongst other things) claiming relief/remedies under s.423 of the 1986 Act, in respect to the settlement.

The Bankrupt defended on, amongst other things, the ground that the TIB's s.423 claim was time-barred/statute barred, relying on sections 8(1) and 9(1) of the 1980 Act.

On this line of defence, the Judge in Hill 1st Instance said, at page 63:

'I accept that the claim under section 423 is an action on a specialty, although some doubt was expressed by Charles J in Carman v Yates (above) at paragraph 187. I think it is right to follow Mr Randall QC in Re Priory Garage (Walthamstow) [2001] BPIR 144 on this point.

Having regard to the relief sought, i.e. the setting aside of certain transactions, I do not accept that this is an action to recover any sum recoverable by virtue of an enactment, and again I follow Mr Randall's decision. Section 8(1) therefore applies but section 9(1) does not. The time is therefore 12 years from the date on which the cause of action accrued.

Section 424 of the Insolvency Act provides:

“(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 adjudged 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 administrator 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.”

This is a case where the debtor has been adjudged bankrupt and the application is made by the trustee of his estate. The cause of action under section 424(1)(a) cannot have accrued before the bankruptcy order. This finding is in line with what Charles J said in Carman v Yates at paragraph 182, although I think his reference to Priory Garage may be in error. He said:

“182. If there is a limitation period, the passages in Muir Hunter suggest that in the case of a claim by a trustee in bankruptcy it begins to run from the date of the bankruptcy order. Counsel for the trustee made the same submission on the basis that that is the date when the cause of action accrued to the trustee. I agree (see for example Re Priory Garage Ltd [2001] BPIR 144 at 149F).

In this case the bankruptcy order was made on 28th January 1999, the application is therefore not statute barred.'

Hill Appeal

On appeal in the Court of Appeal, on the issue of limitation, the Court of Appeal was split. In the majority were Sir Martin Nourse and Waller LJ (Arden LJ was in the minority[7a]). Sir Martin Nourse gave the lead judgment; Waller LJ simply agreed with it, stating '...I agree with the judgment of Sir Martin Nourse, and am fully persuaded by his reasoning that the judge's conclusion on this issue was correct.' (paragraph 152). In essence therefore, the majority agreed with the judgment in Hill 1st Instance.

Sir Martin Nourse in Hill Appeal, on the 'limitation issue', said at paragraphs 141 to 151:

'141. On that issue the first question is whether there is a period of limitation at all. It is not clear why in Law Society v Southall [2002] BPIR 336 the parties, and thus this court, proceeded on the basis that there was no period of limitation applicable to the claim under section 423 of the Insolvency Act 1986. What is clear is that the point was not argued, so that the decision is of no assistance in the present case.

142. Those who may apply for an order under section 423 are specified in section 424(1). They include, in para (a): “in a case where the debtor has been adjudged bankrupt… the trustee of the bankrupt's estate… or (with the leave of the court)… a victim of the transaction.” In the present case the action is brought by a trustee in bankruptcy and there is at least one victim of the transaction in the shape of the revenue.

143. There is no general rule that an action brought by a trustee in bankruptcy is not subject to the provisions of the Limitation Act 1980, and I can see no justification for there to be an exception in the case of a claim brought under section 423. That is confirmed by such authority as may be said to bear on the point; see in particular In re Priory Garage (Walthamstow) Ltd [2001] BPIR 144, a case relating to the somewhat comparable provisions of sections 238 to 241 of the 1986 Act.

144. The second question is whether the claims of the trustee in bankruptcy fall within section 8(1) or section 9(1) of the Limitation Act 1980. My own view, like that of Judge Weeks QC [2005] BPIR 842, 915–916, is that, since the main claim was in origin and substance a claim to set aside the settlement, the action as a whole was “an action upon a specialty” within section 8(1). But because the action was commenced on 4 December 2002, more than 12 years after the settlement was made on 10 March 1989 and less than six years after the bankruptcy order was made on 28 January 1999, the question whether the applicable period of limitation was 12 years under section 8(1) or six years under section 9(1) is academic.

145. So the third and decisive question is whether the period started on the date of the settlement, in which case the action is barred, or on 28 January 1999, in which case it was brought in due time. Following the view expressed by Charles J in In re Yates (A bankrupt) [2005] BPIR 476, Judge Weeks QC held that the cause of action could not have accrued before the bankruptcy order was made. Charles J said, at para 182:

“If there is a limitation period, the passages in Muir Hunter suggest that in the case of a claim by a trustee in bankruptcy it begins to run from the date of the bankruptcy order. Counsel for the trustee made the same submission on the basis that that is the date when the cause of action accrued to the trustee. I agree …”

146. The principal objection to that view is that, because section 424(2) provides that 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 there can only be a single cause of action, while if the view expressed by Charles J and Judge Weeks QC is right, there must be separate limitation periods for different applicants under section 423.

147. In my respectful view the premise of this objection is incorrect. It may be difficult to know exactly what Parliament did or did not have in mind in enacting section 424(2), but it seems that its main purpose must have been to ensure that a victim who had not applied under section 423 should gain the same advantage as one who had.

148. In any event, I do not think it is right to say that the effect of section 424(2) is that there can only be a single cause of action in respect of one transaction. In Letang v Cooper [1965] 1 QB 232, 242–243, Diplock LJ said: “A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person.” That shows that the identity of the claimant or applicant is an ingredient of the cause of action and because two different persons may have the same or a similar cause of action it does not follow that there is only a single cause of action.

149. Further, I see no inherent objection to the notion that there may be separate limitation periods for different applicants under section 423. While it has always been the policy of the Limitation Acts to put an end to stale claims, it has not been part of their policy to provide that time shall run against a claimant or applicant before he has been able to commence his action; see in particular section 28 of the 1980 Act (disability).

150. Three further points must be made. First, it is not an objection to the judge's view that the limitation period may begin many years after the transaction. That state of affairs is perfectly capable of arising under other sections of the 1980 Act, e g sections 28 and 32. Secondly, I do not agree that the appointment of the trustee in bankruptcy is not an ingredient of the cause of action vested in the trustee. It is not until a bankruptcy order is made that the trustee is identified as the person entitled to sue. Thirdly, it is in my view immaterial that when the bankruptcy order is made there may be other victims of the transaction whose individual claims may already be statute-barred but who may nevertheless be able to claim as creditors in the bankruptcy.

151. For these reasons, differing from Arden LJ, I have come to the conclusion that the judge's view of the limitation issue was correct. Like him, I would decide it in favour of the trustee in bankruptcy and dismiss the appeal accordingly.'

Savva

The Savva case is an example of a s.423 claim/action being characterised as subject to s.9(1) of the 1980 Act - that is, a 6 year limitation.

Briefly, Savva was a s.423 claim/action, but brought by a 'victim' of the transaction ('claimant'), rather than a TIB. What is interesting about the decision, is that the claimant claimed 'damages against the second defendant under section 423 of the Insolvency Act 1986 (section 423)' (paragraph 11(iii)) against a second defendant. At paragraph 58(ii), Master McQuail said this about the applicable limitation period prescribed by the 1980 Act:

'transaction defrauding creditors: given that the claim is effectively an action for a sum of money recoverable by virtue of a statute, 6 years from the date of the transaction, by reason of section 9(1) of the 1980 Act'

No Clawback Period for s.423

A separate point, but worth briefly noting, is that there is no 'clawback period' with s.423 (unlike with s.339 of the 1986 Act - Transactions at an undervalue and s.340 of the 1986 Act - Preferences) - i.e. a set trailing period, back from the date of presentation of the bankruptcy petition, within which the impugned transaction must have occured in, for it to be actionable/voidable. In Re Fowlds (a bankrupt), Bucknall and Roach (joint trustees) v Wilson [2021] EWHC 2149 (Ch), Trower J stated that 'there is no statutory clawback period in a section 423 claim' (paragraph 72), as part of his reasoning about the appropriateness of carrying out a balancing exercise between the interests of the creditors or victims of the transferor on the one hand, and the transferee on the other, when determining what relief/remedy to award, under s.425 of the 1986 Act.

Procedure - Statements of Case

Where there are statements of case, a defence of limitation needs to be raised/pleaded. In Malik, Master Dagnall said, at paragraph 171: 'It seems to me that limitation needs to be raised, if it is going to be raised, in a statement of case expressly.'. Explaning how he came to this conclusion, Master Dagnall said, at paragraph 172:

'That, it seems to me, flows from a number of decisions and matters, but in particular the decision in Ronex Properties v John Laing Construction Ltd [1983] 1 QB 398 and the judgment of Donaldson LJ. It is also reflected in the provisions regarding defences in the Practice Direction to Part 16 at paragraph 13.1, albeit that that is in the context of the Civil Procedure Rules Part 7 procedure. However, that merely reflects what is the general law as referred to Ronex Properties v John Laing Construction Ltd, and also as referred to in the decision of Kennet v Brown [1988] I WLR 582. It is further referred to in the book Limitation Periods by Andrew McGee 9th Edition, where reference is made in paragraph 21.014 to an unreported decision of Lewis v Hackney 9 April 1990 in which a judge had refused to allow limitation to be raised at the closing argument stage where it had not previously been advanced.'

On the facts in Malik, limitation was not pleaded (inc. in the points of defence), and only raised as a defence to the s.423 claim, on the second day of trial. An application was made, for permissionn to amend the statement of case, to include a limitation defence, but this was refused, in essence, for being made too late (paragraphs 173-179).

Where Trustee in Bankruptcy is not the Applicant/Claimant

This article focuses on where the transactor/transferor ('transactor') is bankrupt, and his TIB has commenced the s.423 proceedings. But s.423 claims can be brought against a transactor: (a) by a 'victim' of the transaction; (b) when the transactor has not been adjudged bankrupt. Limitation is this scenario, as been considered in:

(a) JSC BTA Bank v Ablyazov & Anor [2018] EWCA Civ 1176, Leggatt LJ made some obiter comments[8].

(b) Sahota v Sohal [2022] EWHC 2459, Deputy Master Henderson made some obiter comments[9].

(c) Lindsay, Master Dagnall made some obiter comments[10].

CONCLUSION

The Court of Appeal in Hill Appeal is the leading authority in this area, with Sir Martin Nourse giving the majority judgment. The propositions he sets down, in paragraphs 141 to 151, can be summarised, it seems, as follows:

(1) Limitation Act 1980 does apply to s.423 of the 1986 claims brought by a TIB;

(2) As to whether section 8(1) or section 9(1) of the Limitation Act 1980 applies: where the main claim is 'in origin and substance' (Hill Appeal, Sir Martin Nourse at paragraph 144), or where the 'the substance or the essential nature' (Priory Garage, Deputy High Court Judge at page 31) of the claim/action: 

(i) to set aside a transaction, the action as a whole is “an action upon a specialty” within section 8(1) of the 1980. Given section 8(1) applies, the relevant limitation period is 12 years.

(ii) for monetary compensation (i.e. 'to recover a sum recoverable by virtue of' those sections), not a claim to set aside a transaction, then s.9(1) of the 1980 will likely apply, with a relevant limitation period of 6 years.

(3) 'Where there is doubt as to whether a claim falls into the first (that is, 12 year) category, or the second (that is, 6 year) category, the “look and see” approach adopted by Lord Goddard CJ in the [West Riding CC v Huddersfield Corp [1957] 1 Q.B. 540] case and approved by Peter Gibson LJ in the [Farmizer (Products) Ltd, Re [1997] BCC 655] at 599F should be applied, and the court should look to see what the substance or essential nature of the relief truly sought by the applicant in the particular case before it is. The court is not limited just to the words of the pleading. The court may look at the substance behind the pleading. However, provided the pleaded claim to set aside is a bona fide claim, which is neither a sham nor bound to fail, the applicant is entitled to pursue it' (Priory Garage, page 33, point (5))

(4) There is no a single cause of action under s.423 of the 1986 Act; each person entitled to claim under s.423 of the 1986 Act, has their own cause of action (the identity of the claimant or applicant being an ingredient of the cause of action); the TIB's s.423 of the 1986 cause of action is not the same cause of action, 'victims' entitled to claim under s.423 of the 1986 Act, have;

(5) The TIB's s.423 of the 1986 cause of action cannot have accrued before the bankruptcy order was made. It is only from this point, that a TIB is able to commence his action[11]. Consequently, time cannot have started running on the limitation period, against the TIB, on the TIB's s.423 cause of action, until the date of the bankruptcy order. In other words, time runs on the TIB's cause of action under s.423 of the 1986 Act, from the date of the bankruptcy order (and not before). It matters not that: (a) the limitation period may begin many years after the transaction; (b) others, who are 'victims' of the same transaction, may themselves already be time-barred/statute barred on their s.423 of the 1986 Act cause of action.

SIMON HILL © 2025*

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33 BEDFORD ROW  

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