John Matt David Buote

The Trustee in bankruptcy sought to set aside alleged transfers at undervalue made by the bankrupt to his estranged spouse and two sons in the two years prior to bankruptcy.

The court found the payments made in the year immediately preceding bankruptcy to be transfers at undervalue, as the respondents failed to provide compelling corroborating evidence for an alleged oral separation agreement.

However, the court found the bankrupt was not insolvent at the time of the payments made in the second year prior to bankruptcy, thus those transfers were not set aside.

The applicant sought declarations that a transfer of pledged shares and a buy‑sell notice issued under a unanimous shareholders agreement were null and void.

The dispute arose from a promissory note and share pledge agreement relating to the purchase of shares in a private corporation.

The respondent claimed that the applicant defaulted on the promissory note, triggering its rights to transfer pledged shares and invoke a buy‑sell mechanism with a penalty provision.

The court found that no proper written notice of default had been proven in accordance with the parties’ contractual requirements.

As a result, the respondent could not rely on the penalty provision of the shareholders agreement, and the applicant’s requested declaratory relief was granted.