This case highlighted these issues, where the Secretary of State applied for directions as to whether compensation paid to postmasters, following the Horizon scandal, constituted property in the estates of various postmasters who had been made bankrupt.
This particular case was used as the test case. The trustees in bankruptcy of a postmistress took the position that the compensation was such property and, therefore, vested in them for the benefit of creditors. The Secretary of State maintained that the compensation did not form part of the bankruptcy estate.
The judge agreed with the Secretary of State and found that the compensation was not property as it did not arise out of the legal rights that the postmasters had pursued via the group litigation.
The compensation was separate and arose as an ex gratia scheme set up by the Government after the judge found that the postmasters had exhausted their legal rights through the group litigation.
The judge also found that the assignment entered into between the postmistress and the trustees, to allow the postmistress to join the group litigation, did not alter the position.
The judge reached a conclusion that any TV scriptwriter would have been proud of!
Secretary of State for Business and Trade v Abdulali and others [2024] EWHC 1722 (Ch)
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