In 2013, Mrs Hanara was adjudicated bankrupt. The Assignee subsequently disclaimed Mrs Hanara's half-interest in a Hastings property (the Interest), in which Mrs Hanara had very little equity. In 2016, the owner of the other half-share in the property, Mr Hanara, was also adjudicated bankrupt. The Assignee, acting in respect of both bankrupt estates, looked again at the likely equity that might be available in the property. The Assignee considered that, on its own, Mr Hanara's one half- share in the property would be unsaleable and therefore applied under s 119 of the Insolvency Act 2006 for an order vesting the Interest in herself, either as Assignee of the property of Mrs Hanara or Mr Hanara.
The Court found that while the Assignee had the requisite standing to apply under s 119, Mrs Hanara's estate did not suffer loss as a result of the disclaimer. The increase in equity only occurred due to the passage of time and because Mr Hanara had continued to make payments on the house to avoid a mortgagee sale. There must be more than a post-sale increase in value before loss or damage is proved.
On the other hand, Mr Hanara's creditors would suffer a loss as a result of the disclaimer as his one-half share in the property would not be readily saleable. The property would be sold as a mortgagee sale and the creditors would likely lose out on any dividends. The Court therefore considered it was fair to vest the Interest in the Assignee, in her capacity as Assignee of the estate of Mr Hanara.
See the Court decision here.