High Court Judgment regarding sham and illusory trusts and transactions defrauding creditors

October 5, 2022

Judgment has today been handed down in Sahota v Sohal and Ors [2022] EWHC 2459 (Ch).

Karl Anderson represented the Second and Third Defendants, who successfully argued that two deeds of trust validly created an equitable interest in a London property in favour of the Third Defendant, and were not shams or illusory trusts.

The judgment contains an interesting analysis the sham doctrine, including a finding that the documents in question would not be classified as a sham merely because they were intended to be produced and relied upon on some occasions but not others. The judgment also considers how the Court should quantify an order “restoring the position to what it would have been” where a person has entered into a transaction at an undervalue under s.423 Insolvency Act 1986.

Download the judgment.

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