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INSOLVENCY: Beyond reach

30 June 2017  

Ellen Walker sets out the principles applied where a party seeks to protect their interest against a trustee in bankruptcy using equitable principles

The equity of exoneration arises where property is jointly owned by parties A and B, and B incurs a debt that is charged against the whole property. In such cases A is or may be entitled to a charge over B’s share of the property to the extent that B’s indebtedness can be paid out of A’s share. In practice this means, in the event of a sale, that the secured creditor will be paid out of B’s share in the first instance and will only have recourse to A’s share once B’s share has been exhausted. This is likely to arise where:


Additional Info

  • Case(s) Referenced:

    Armstrong v Onyearu & anor [2017] EWCA Civ 268

    Cadlock v Dunn & anor [2015] EWHC 1318 (Ch)

    Re Chawda (in bankruptcy) [2014] BPIR 49

    Day v Shaw & anor [2014] EWHC 36 (Ch)

    Graham-York v York & ors [2015] EWCA Civ 72

    Paget v Paget [1898] 1 Ch 470

    Parsons v McBain [2001] FCA 376

    Re Pittortou [1985] 1 WLR 58

Last modified on 03 July 2017