This obscure Act is being increasingly used by creditors to deal with debtors who have made fraudulent dispositions (prior to 1 December 2009) of property to third parties. It has been held that debtors who transfer properties to third parties with the intention of defrauding creditors, or with the intention of defrauding future creditors, may have such transfers set aside by creditors. Such transfers are sometimes a feature of personal bankruptcy.
We set out below Section 10 of the Act:
“And furthermore for the avoiding and abolishing of fainted, covenous and fraudulent feoffments, gifts, grants, alienations, conveyance, bonds, suites, judgements and executions, as well of lands, and tenements, as of goods and chattels more commonly used and practised in these days, then hath been seen or heard of before; which feoffments, gifts, grants, alienations, bonds, suits, judgements and executions have been and are devised and contrived of malice, fraud, covin, collusion or guile, to the end, purpose and intent to delay, hinder or defraud creditors and others of their just and lawful actions, suits, debts, accompts, damages, penalties, forfeitures, herriots, mortuaries, and reliefs, not only to the letter or hinderance of the due course of execution of law and justice, but also to the overthrow of all true and plain dealing, bargaining and chevifance between man and man, without the which no common wealth or civil society can be maintained or continued; Be it therefore further declared, ordained and enacted, by the authority of this present Parliament, that all and every feoffment, gift, grant, alienation, bargain and conveyance of lands, tenements, hereditaments, goods and chattels, or of any of them, or of any lease, rent, common, or other profit or charge out of the fame lands, tenements, hereditaments, goods, and chattels, or any of them, by writing or otherwise, and all and every bond, suit, judgement and execution at any time had or made, fithence the beginning of the reign of his said late Majesty King James of blessed memory, or at any time hereafter to be had or made, to or for any intent or purpose before declared and expressed, shall be from henceforth deemed and taken only as against that person or persons, his or their heirs, successors, executors, administrators, and assigns, and every of them, whose actions, suits, debts, accompts, damages, penalties, forfeitures, herriots, mortuaries and reliefs, by such guileful, covenous and fraudulent devises and practices, as is aforesaid, are, shall, or ought to be in any wife disturbed, hindered, delayed or defrauded to be clearly and utterly void, and of none effect: any pretence, colour, fained consideration, expressing of use, or any other matter or thing to the contrary notwithstanding.”
While the above Act was repealed (with effect from 1 December 2009) by the Land and Conveyancing Law Reform Act 2009, the new Act introduced similar provisions in Section 74(3) specifically:
“Subject to subsection (4), any conveyance of property made with the intention of defrauding a creditor or other person is voidable by any person thereby prejudiced.”
For further information please contact Jim Stafford or Tom Murray on 01 661 4066, or by email: stafford@liquidation.ie or murray@liquidation.ie