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Whether the defence of change of position can be raised to a claim under s 339 is a difficult question. The section gives the court a wide power to "make such order as it thinks fit for restoring the position to what it would have been in if the individual had not entered into the transaction." On its face it this leaves it open for the defendant to argue that he should not be required to repay where he has changed his position as this would not be to "restore the position to what it would have been" as he would now be worse off. If the court could be persuaded that the clawback provisions in the Insolvency Act are based upon the principle of unjust enrichment (unless restitution is awarded the defendant will be unjustly enriched at the expense of the bankrupt's estate) they might be persuaded to apply the defence.

The statute (see s 342), the caselaw and the textbooks give painfully little guidance as to how the court's power under s339 is to be exercised.

R

----- Original Message -----
From: "Nicholas Briggs"
Sent: Friday, December 15, 2000 11:14 AM
Subject: [RDG:] Section 339 IA 1986

Section 339 updated section 14 of the BA 1914. That section had defects in so far as it failed to assist in situations where there had been a disposition of the bankrupt's property by way of a gift. However, for the disposition to be set aside it has to be shown that the estate has lost something (i.e. value).

Section 436 of the IA 1986 provides the definition of property. It is very wide and includes money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest whether present or future or vested or contingent arising out of or incidental to property.

If it can be shown that the money Cass had lost belonged to him and thus would have vested in his estate, the insolvency jurisdiction would be open. In these circumstances would the casino be able to plead change of position against the trustee who would be acting with the force of the statutory provision?