A party cannot appeal a decision made in bankruptcy proceedings by reason only of a personal interest in the outcome. An economic interest is a pre-requisite.

This was confirmed by the court in Sands and another v Monem and another, in which the bankrupt had transferred the interest in his home to his wife before being made bankrupt. The transfer was made allegedly in order to settle a debt, although this was not reflected in the documentation. That transfer was successfully set aside as a preference by the bankrupt's trustee.

The bankrupt appealed against that order, arguing that his wife had an equitable charge over the property. The trustee argued that the bankrupt had no standing to make the application as he had no economic interest in the property, whatever the outcome. If the application succeeded, the transfer to the wife would be reinstated but the bankrupt would not gain any interest in the property. If the appeal failed, his interest in the property formed part of his estate but there was no prospect of a surplus being returned to him.

The court confirmed that as the bankrupt had no economic interest in the outcome of the appeal, he had no standing to bring the application. The court did not therefore have to go on and consider the merits of the appeal.

Things to consider

It is interesting to note that the bankrupt's wife did not appeal the decision, despite the fact that she would have had an economic interest in the outcome.