INSOLVENCY

The court has jurisdiction to extend the limitation period under s 32(2) of the Limitation Act 1980 to enable a claimant to bring an action based on breach of duty in respect of a transaction allegedly made to defeat the creditors within the meaning of s 423 of the Insolvency Act 1986. For s 32(2) to apply:

(i) there must be the deliberate commission of an act;

(ii) that act must amount to a “breach of duty”; and

(iii) that breach of duty must occur in circumstances in which it is unlikely to be discovered for some time.

If those ingredients are satisfied, then the next step (where the claimant relies on s 32(1)(b)) is to go back to s 32(1)(b) and to identify the facts that are involved in the relevant breach of duty.

After that, those facts can be tested against the right of action relied on in the proceedings. There is no need to show that the right of action was for