IP Briefing : When is an Alienation not an Alienation? – AIB v Amanda McCutcheon

Glasgow Sheriff Court has recently considered the adequacy of consideration in an action, raised by a trustee in sequestration, for reduction of a disposition which was said to have been a gratuitous alienation.

In this case, the debtor had previously been sequestrated on his own application; in the course of this sequestration, he reached an agreement with that trustee to discharge the trustee’s interest in his home for the sum of £500. Several years later, the debtor again applied for his own sequestration, and the Accountant in Bankruptcy was appointed his trustee. Between the two sequestrations, the debtor had transferred his home into the name of the Defender, his partner, for no consideration. This was said to have been in implement of an undefended decree, in which Glasgow Sheriff Court had issued declarator that she had “obtained [the debtor’s] whole interest in [the home].” The AIB then raised proceedings seeking reduction of the transfer.

At debate, the Defender advanced three grounds for opposing the order: that the debtor had been solvent at the time of the transaction; that the AIB was personally barred by the actions of the debtor’s first trustee in accepting £500 for disposal of the debtor’s interest in the home; and that the transaction was for adequate consideration. The first two were disposed of briefly; respectively, the sheriff held that the Defender’s averments of solvency were inadequate, and that the AIB could not be personally barred by the actions of a separate trustee.

As to the question of consideration, the court was more equivocal. The law is clear that there must be a transfer of something in exchange and therefore that a transfer in satisfaction of decree, for which nothing is given in return, is without consideration. However, the Sheriff raised the question of whether a transfer, in response to a court decree, could be considered an alienation at all. There is authority for reduction of an alienation, in implementation of a court order, where that order was part of a broader scheme to defraud creditors by deliberately withdrawing defences. However, in the present case, the AIB had not challenged the validity of the decree, and the Sheriff was unable to make factual determinations at debate. As such, the Sheriff allowed the Defender’s averments, that the transaction was not a gratuitous alienation as it was in implementation of a decree, to proceed to a proof before answer.

Practitioners will be concerned that an alienation which, though gratuitous on the face of it, was in implementation of a decree may not be challengeable. It remains to be seen what will happen at proof; however, in the meantime, practitioners should be prepared to investigate the circumstances behind any such decree, and to consider whether it is appropriate to challenge the decree itself, as well as any subsequent transaction.

BBM Solicitors specialise in advising IP’s in both contentious and non-contentious matters (including transactional work). Contact: Eric Baijal (emb@bbmsolicitors.co.uk).This briefing note is current as at 9 September 2026 and is our understanding of the position described at that date. Legal advice ought to be taken before relying on its terms (particularly to ensure the law has not changed).