The client met with Counsel, Mr, Samuel Okoronkwo, to discuss the implications of a statutory demand arising from a disputed property transaction involving a family estate. The contract in question was upheld in a 2023 tribunal decision, but the client now seeks to challenge its validity on the basis that the deceased lacked capacity at the time of signing due to early-stage dementia. The client believes the purchaser should have known or suspected this and that the transaction was unconscionable. The contract transferred a property worth over £1 million for £295,000, allegedly clearing rent arrears and benefiting the purchaser disproportionately. The client is concerned about the risk of bankruptcy proceedings and the potential freezing of bank accounts if a petition is advertised. The client wishes to sell the property on the open market to satisfy the £50,000 costs order but fears interference from the opposing party, who may object to the sale or seek to enforce the contract. The client also expressed a desire to honour informal family commitments regarding the distribution of the estate.
The key legal issues include the enforceability of the contract, the legitimacy and timing of the statutory demand, and the procedural risks associated with a bankruptcy petition. The client must also navigate complex family dynamics and moral obligations while pursuing a legal strategy that balances equity, conscience, and financial constraints. The possibility of appealing the tribunal decision out of time was discussed, along with the evidentiary burden required to support such an application.
Counsel advised that the contract may be voidable on grounds of unconscionability and unjust enrichment, supported by medical records and witness evidence. Although the appeal window has passed, Counsel suggested that an application for abridgement of time may be possible if new evidence is presented. Counsel outlined a four-step strategy: respond to the statutory demand to prevent bankruptcy; propose payment of legal costs from the property sale; investigate the deceased’s health and legal circumstances surrounding the contract; and issue a detailed letter of claim followed by proceedings if necessary. Counsel emphasized the urgency of responding to the statutory demand and warned that if a petition is lodged and advertised, it could result in frozen accounts and broader financial consequences. The client was encouraged to send all relevant documents to Counsel’s clerking team and authorize correspondence with the opposing party’s solicitors. A well-reasoned letter may help secure time and avoid escalation. Counsel also stressed the importance of presenting a clear legal strategy and warned against allowing emotional factors to derail progress. The next step will be to respond to the statutory demand and initiate the legal process to challenge the contract and protect the estate.
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