Legal aspects of transferring an asset
Discussion
Hi, one for the legal bods amongst us. We have seized a motorbike under warrant on behalf of a client. The bike was DVLA checked and was registered to the defendant, at the time of seizure the Police were called and the attending officer PNC checked the bike as well which confirmed it belonged to the defendant.
The defendant had claimed at the time of seizure that his LTD company owned the bike and produced a receipt (ink still wet). The bike was seized and is to be auctioned in the next two weeks. The defendant has now applied to the court to have the seizure reversed as he claims the bike belongs to the ltd company.
This is obviously fraudelent attempt to prevent the asset being sold. He claims that the LTD of which he is a director and share holder, purchased the bike for £3000 only a matter of a few days before the seizure, the auction estimate for value is £5500 and a second hand value would be nearer £7000.
Does this fall under the rules of "transfer at arms length" and also possibly transfer at under value, if so can someone point me in the direction of the legislation. Thanks
The defendant had claimed at the time of seizure that his LTD company owned the bike and produced a receipt (ink still wet). The bike was seized and is to be auctioned in the next two weeks. The defendant has now applied to the court to have the seizure reversed as he claims the bike belongs to the ltd company.
This is obviously fraudelent attempt to prevent the asset being sold. He claims that the LTD of which he is a director and share holder, purchased the bike for £3000 only a matter of a few days before the seizure, the auction estimate for value is £5500 and a second hand value would be nearer £7000.
Does this fall under the rules of "transfer at arms length" and also possibly transfer at under value, if so can someone point me in the direction of the legislation. Thanks
Uh, my first point would be that the RK on the DVLA website is not necessarily the person with Legal Title to the motorbike...
ETA - if he has produced a receipt for the bike then go to the place where it was sold and get a copy of the sales receipt from them?
ETA - if he has produced a receipt for the bike then go to the place where it was sold and get a copy of the sales receipt from them?
Edited by Jasandjules on Wednesday 3rd March 18:14
Jasandjules said:
Uh, my first point would be that the RK on the DVLA website is not necessarily the person with Legal Title to the motorbike...
ETA - if he has produced a receipt for the bike then go to the place where it was sold and get a copy of the sales receipt from them?
Did you speed read that? he did / does own the bike, it seems for around 2 years, he was the registered owner but claims just before the seizure he sold the bike to his ltd company. A blatant attempt to avoid paying his debt.ETA - if he has produced a receipt for the bike then go to the place where it was sold and get a copy of the sales receipt from them?
Edited by Jasandjules on Wednesday 3rd March 18:14
jamesuk28 said:
Did you speed read that? he did / does own the bike, it seems for around 2 years, he was the registered owner but claims just before the seizure he sold the bike to his ltd company. A blatant attempt to avoid paying his debt.
Yes, I missed that single sentence. Sorry. I can't wait to get my new glasses....Can you ask the court to make a declaration on it? Are you permitted to trace the assets? I.e. the Ltd company will have paid for it in some way (assuming he's not just making this up, which he is) so there will be money paid from the Ltd company (I would imagine he is not smart enough to have done all that) to him which he can evidence?
Sorry, thinking aloud really as this section of law I only had about 1 class on and I didn't pay much attention.
take the shares off him as well then?
sorry - not sure if the fact that it is not at arm's length is any use to you unless he is subsequently made bankrupt. I have a feeling that is the only way the transaction could be undone.
of course by selling at an undervalue to a connected company he might have more tax to pay - someone more qualified than me can answer that. might be irrelevant given the relatively low sums involved though - not sure HMRC would be too interested.
sorry - not sure if the fact that it is not at arm's length is any use to you unless he is subsequently made bankrupt. I have a feeling that is the only way the transaction could be undone.
of course by selling at an undervalue to a connected company he might have more tax to pay - someone more qualified than me can answer that. might be irrelevant given the relatively low sums involved though - not sure HMRC would be too interested.
James, I don't think the "at arms length" issue assists - that is (at least as I understand it) limited in impact to insolvency cases where there has been a disposal in the preceding years at less than market value or to someone who is connected to the insolvent party.
(It's in the Insolvency Act 1986 if you want to have a look at the wording and the application of teh relevant sections)
In this case, it's a straightforward question of whether he can satisfy a judge that there had in fact been a transfer of title prior to the seizure. The court will want to see evidence of teh payment - bank account, cheque stubs or similar - and will want to know why the registered keeper hadn't been changed at DVLA.
I'd imagine it's going to come down to how credible his explanations are (I'm assuming it's a hearing dealt with by written evidence rather than live witness evidence) and whether he is able to satisfy the judge that what he's saying is true in the face of submissions from your guy's advocate that it's all clearly contrived after the event.
(It's in the Insolvency Act 1986 if you want to have a look at the wording and the application of teh relevant sections)
In this case, it's a straightforward question of whether he can satisfy a judge that there had in fact been a transfer of title prior to the seizure. The court will want to see evidence of teh payment - bank account, cheque stubs or similar - and will want to know why the registered keeper hadn't been changed at DVLA.
I'd imagine it's going to come down to how credible his explanations are (I'm assuming it's a hearing dealt with by written evidence rather than live witness evidence) and whether he is able to satisfy the judge that what he's saying is true in the face of submissions from your guy's advocate that it's all clearly contrived after the event.
Edited by Lurking Lawyer on Thursday 4th March 13:09
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