Summary

The degree, if any, to which the value in money or money's worth of the benefit of a life assurance policy as at the date of its assignment to the defendant was affected by the knowledge that the insured was shortly to undergo hazardous surgery was a matter for expert valuation evidence.

Facts

Trial of a preliminary issue in an action by the claimant ('C'), in his capacity as judicial factor of the insolvent estate of Allan McLean Thoars ('D'), to set aside an assignment by D in July 1996 of the benefit of a life insurance policy to the defendant ('Ramlort') by means of a declaration of trust that was not expressed to be made for any consideration. C's case was that the assignment should be set aside under s.339 Insolvency Act 1986 as a transaction at an undervalue. It was common ground that: (a) the assignment had been made at a "relevant time" for the purposes of that section; and (b) at that time D was awaiting a liver transplant, which he subsequently underwent on 18 September 1996. D died the following day. C contended that the value of the policy at that time was the amount payable on death under the policy, namely £185,598. Ramlort contended that: (i) the policy had no value or only its surrender value, which was £71.96; and (ii) it had provided consideration for the assignment by reimbursing D as to the amount of the 1996 premium and agreeing to pay all future premiums. The preliminary issue concerned the extent, if any, to which the value of the consideration provided by D to Ramlort by the declaration of trust should be assessed by the knowledge of and/or taking into account the fact that he underwent the operation in September 1996 and died the following day.

Held

(1) There was no doubt that in appropriate circumstances the court was entitled to have regard to subsequent events in assessing the value of consideration of money or money's worth as require by s.339(3)(c) of the Act. (2) However the degree, if any, to which the value in money or money's worth of the benefit of the policy as at the date of its assignment to Ramlort was affected by the knowledge that D was shortly to undergo hazardous surgery was a matter for expert valuation evidence. Phillips & Anor v Brewin Dolphin Bell Lawrie Ltd & Ors (2001) 1 WLR 143 considered. (3) In the circumstances it was not appropriate for the court to give an answer to the preliminary issue.

Judgment accordingly.