Where owners of a property were appealing against an order that
a creditor had a beneficial interest in their property (following a
tracing claim), the court declined to order the sale of that
property pending the hearing of the appeal.
In Hawk Recovery Ltd v Hall and others,
the claimant was the assignee of a judgment against the defendants
in favour of B. B, through various companies and assignees, had
been engaged in a number of claims against the defendants who
alleged he had a vendetta against them and which had been
orchestrated for illegitimate purposes.
The defendants had been made bankrupt on B's petition
following an unpaid costs order in another claim. Although they had
been discharged, their assets remained vested in their trustee in
The claimant obtained a declaration that it had a beneficial
interest in the property (through the tracing claim) and sought an
order for sale. The court refused to order that title to the
property be transferred to the creditor or that it was entitled to
possession. The claimant appealed. The defendants had obtained
leave to appeal against the declaration of beneficial interest and
argued that if they were successful in their appeal, an unnamed
family friend would lend them the sum required (£75,000) to
pay off the bankruptcy debt and so no order for sale should be made
at the current time.
The High Court decided that it should wait for the
defendants' appeal to be heard before determining whether an
order for sale should be made. If such an order were made now, the
defendants would have to vacate the property. If they were then
successful on their appeal, it would transpire that the claimant in
fact had no beneficial interest in the property and no entitlement
to an order for sale.
If the defendants' appeal was unsuccessful, the claimant
would still have a beneficial interest and the defendants would
have to sell the property. Although the claimant was being kept out
of his money pending the appel, greater justice was achieved by
allowing the defendants to remain in the property pending the
hearing of their appeal.
Things to consider
The court took into account the history between the parties in
reaching its decision and that the claimant was simply being kept
out of its money for a period of time whereas the defendants would
have to find a new home which might not be necessary if they were
successful on appeal. The harm to the defendants would be far
greater than the harm to the claimant if an order for sale was
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guide to the subject matter. Specialist advice should be sought
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