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26 MAY 2006

BANKRUPTCY: Nicholls v Lan [2006] EWHC 1255 (Ch)

(Mr Paul Morgan QC sitting as a deputy High Court judge; Chancery Division; 26 May 2006) (2006) The Times August 4

Although the Trusts of Land and Appointment of Trustees Act 1996 (the 1996 Act) provided that the interests of creditors were to be taken into account in selling the family home, in an exceptional case, like the instant, the 1996 Act did not prescribe the weight to be attached to those interests. The difficulty was that the court had to balance the interests of the creditors against the needs of the bankrupt's spouse, which were considerations of a different character and quality. Since it was almost axiomatic that what the creditors wanted was to be paid their money as soon as possible, it was not necessary for a trustee to produce very much by way of positive evidence as to their interests. The interests of creditors were not to be dismissed as having no weight in a case where there was little or no specific evidence as to their identities and as to their concerns. The order for sale of the property had not involved a breach of the Human Rights Act 1998.

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