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296C: Other orders
or “Court can order property return or payment if company transfers are reversed”
You could also call this:

“Rules for protecting innocent buyers when company property transfers are challenged”

If a company’s property transfer is set aside or an order is made under section 296C, it won’t affect the ownership of someone who bought the property from someone other than the company. This is true if they paid a fair price and didn’t know how the property was originally acquired from the company.

The same rule applies to charges (like mortgages) on property. If you bought property because a bank sold it after the owner couldn’t pay their mortgage, you can keep it if you paid a fair price and didn’t know about any issues with how the charge was created.

A court can’t make you give back company property (or pay its value) to a liquidator if you can show three things: you acted honestly, you had no reason to think the company was in financial trouble, and you paid for the property or changed your situation believing the transfer was okay.

These rules apply even if they conflict with the Land Transfer Act 2017.

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Next up: 297: Transactions at undervalue

or “Recovering money from unfair deals made by a company before liquidation”
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Part 16 Liquidations
Voidable dispositions

296DAdditional provisions relating to setting aside dispositions

  1. The setting aside of a disposition or an order made under section 296C does not affect the title or interest of a person in property that the person has acquired—

  2. from a person other than the company; and
    1. for valuable consideration; and
      1. without knowing the circumstances in which the property was acquired from the company.

        1. The setting aside of a charge or an order made under section 296C does not affect the title or interest of a person in property that the person has acquired—

        2. as the result of the exercise of a power of sale by the mortgagee of the charge; and
          1. for valuable consideration; and
            1. without knowing the circumstances relating to the giving of the charge.

              1. A court must not order the recovery of property of a company (or its equivalent value) by a liquidator, whether under this Act, any other enactment, or in law or in equity, if the person from whom recovery is sought (A) proves that when A received the property—

              2. A acted in good faith; and
                1. a reasonable person in A's position would not have suspected, and A did not have reasonable grounds to suspect, that the company was, or would become, insolvent; and
                  1. A gave value for the property or altered A's position in the reasonably held belief that the transfer of the property to A was valid and would not be set aside.

                    1. Nothing in the Land Transfer Act 2017 restricts the operation of this section or sections 296A to 296C.

                    Notes
                    • Section 296D: inserted, on , by section 53 of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).