Conveyancing Amendment Act 1994
The Laws of Bermuda
Annual Volume of Public Acts 1994 : 21

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147

BERMUDA
1994 : 21

CONVEYANCING AMENDMENT ACT 1994

[Date of Assent 13 July 1994]

[Operative Date 13 July 1994]

WHEREAS it is expedient to amend the Conveyancing Act 1983
to make new provisions in respect of certain voidable dispositions:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

Short title
1 This Act which amends the Conveyancing Act 1983 may be cited
as the Conveyancing Amendment Act 1994.

Inserts new Part IV A
2 The Conveyancing Act 1983 is amended by inserting at the end
of Part IV, immediately after section 36, the following new Part IV A—

"PART IV A

PROVISIONS AGAINST DISPOSITIONS WITH
REQUISITE INTENTION

Interpretation
36A (1) In this Part—

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"appointed day" means the date on which this Part
comes into operation;

"disposition" means any disposition or series of
dispositions of property of any nature whatsoever and
however effected, and, without limiting the generality
of the foregoing, includes any exercise of a power of
appointment, any trust, gift, transfer, sale, exchange,
demise, assignment, assurance, grant, lease,
surrender, conveyance, reconveyance, release,
reservation, any purchase or other acquisition, any
covenant, contract or option and any compromise or
other dealing or arrangement;

"eligible creditor" means a person to whom—

(a) on, or within two years after, the material date
the transferor owed an obligation and on the
date of the action or proceeding to set aside the
relevant disposition that obligation remains
unsatisfied;

(b) on the material date the transferor owed a
contingent liability and since that date the
contingency giving rise to the obligation has
occurred and on the date of the action or
proceeding to set aside the relevant disposition
that obligation remains unsatisfied; or

(c) on the date of the action or proceeding to set
aside the relevant disposition, the transferor
owes an obligation in consequence of a claim,
made by that person against the transferor,
arising from a cause of action which accrued
prior to, or within two years after, the material
date.

"material date" means the date on which a relevant
disposition is made;

"obligation" means any obligation or liability, other than
a contingent liability, to pay a sum of money or to
transfer property;

"property" includes money, goods, things in action, land
and every description of property wherever situated
and every description of interest, whether present or

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future or vested or contingent, arising out of, or
incidental to, property;

"relevant disposition" means a disposition to which
section 36C applies;

"requisite intention" means an intention of a transferor
to make a disposition the dominant purpose of which
is to put the property which is the subject of that
disposition beyond the reach of a person or a class of
persons who is making, or may at some time make, a
claim against him;

"transferor" means a person who directly or indirectly
makes a relevant disposition or causes it to be made;

"transferee" means the person to whom a relevant
disposition is made and includes a successor in title
of such person;

"trust" includes a settlement;

"undervalue", in relation to a disposition of property,
means a disposition in respect of which—

(a) no consideration is given; or

(b) the value of the consideration given is, in money
or money's worth, significantly less than the
value, in money or money's worth, of the
property.

Application
36B (1) Subject to subsections (2) and (3), with effect from
the appointed day the provisions of this Part shall apply to every
disposition of property made by any person whether that
disposition was made before or after the appointed day and
whether or not the property, the subject of the disposition, is
situated in Bermuda or elsewhere.

(2) Notwithstanding subsection (1), where—

(a) prior to, or within six months after, the
appointed day; and

(b) pursuant to a conveyance of property to which
section 37 of the Conveyancing Act 1983
applies,

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any action or proceeding has been commenced, this Part shall
have no application, and the provisions of the said section 37
shall have effect as if this Part had not been enacted.

(3) This Part shall not affect the operation of a
disentailing assurance or the law of bankruptcy for the time
being in force.

Avoidance of dispositions made with the requisite intention,
etc
36C (1) Subject to subsection (2) and the provisions of this
Part, every disposition of property made with the requisite
intention and at an undervalue shall be voidable at the instance
of an eligible creditor thereby prejudiced.

(2) Where a person seeking to set aside a relevant
disposition was not, on the material date, a person to whom an
obligation was owed by the transferor, the Court shall not set
aside that disposition unless the Court is satisfied that that
person was, on the material date, reasonably foreseeable by the
transferor as a person to whom an obligation might become
owed by him.

(3) Subject to subsection (4), no action or proceeding to
set aside a disposition shall be commenced pursuant to this Part
unless such action or proceeding is commenced—

(a) in the case of an eligible creditor referred to in
paragraph (a) of the definition of that expression,
within six years after the material date or within
six years after the date when the obligation
became owed, whichever is the later date;

(b) in the case of an eligible creditor referred to in
paragraph (b) of that definition, within six years
after the material date;

(c) in the case of an eligible creditor referred to in
paragraph (c) of that definition, within six years
after the material date, or within six years after
the date when the cause of action accrued,
whichever is the later date.

(4) Except as provided in subsection (3), nothing
contained in this section shall be construed as in any way
affecting the operation of the Limitation Act 1984.

(5) For the avoidance of doubt it is hereby declared—

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(a) that a disposition to which this Part applies
shall not, by reason only that it was made at an
undervalue, be set aside by the Court; and

(b) the Court shall, for the purpose of setting aside
such a disposition determine, on a balance of
probability, whether it was made with the
requisite intention.

Savings of certain rights
36D (1) Where, pursuant to this Part, a relevant disposition
is set aside and the Court is satisfied that the transferee has
acted in good faith, then,—

(a) the transferee shall have a first and paramount
charge over the property, the subject of the
relevant disposition, for an amount equal to all
costs (and not only such costs as the Court
might otherwise allow) properly incurred by the
transferee in the defence of the action or
proceeding to set aside that disposition;

(b) the relevant disposition shall be set aside
subject to all fees and costs properly incurred
and subject also to any pre-existing rights,
claims and interests of the transferee and of any
person through whom the transferee claims and
who has acted in good faith; and

(c) in the case of a trust, the relevant disposition
shall only be set aside subject to the right of a
beneficiary to retain any distribution made
consequent upon the prior exercise of a trust,
power or a discretion vested in the trustee of
such trust or any other person, and otherwise
properly exercised.

(2) The burden of proving that a transferee or any
person through whom the transferee claims has not acted in
good faith shall be upon the person making the allegation.

Extent of avoidance of relevant disposition
36E Subject to section 36D, a relevant disposition shall be
set aside pursuant to this Part only to the extent necessary to
satisfy the obligation owed to the eligible creditor at whose
instance the disposition has been set aside.

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Part not to validate certain dispositions
36F Nothing contained in this Part shall be construed as -

(a) validating any disposition of property which is
neither owned by, nor is the subject of a power
of disposal with respect thereto vested in, the
transferor; or

(b) affecting the recognition of a foreign law in
determining whether the transferor is the owner
of such property or the holder of such power.

Relationship with Trusts (Special Provisions) Act 1989
36G Nothing in this Part shall be construed as creating or
enabling any right, claim or interest on behalf of a creditor or
person which right, claim or interest would be avoided or
defeated by section 11 of the Trusts (Special Provisions) Act
1989, (which prohibits the variation or setting aside of trusts
validly created under the Law of Bermuda).".

Amends Real Estates Assets Act 1787
3 The Real Estates Assets Act 1787 is amended by repealing
section 3.

Repeals section 37
4 Section 37 of the Conveyancing Act 1983 is repealed.