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Fraudulent Conveyances Act 1571
Act of Parliament
Citation 13 Eliz. 1. c. 5
Dates
Repealed 1 January 1926
Other legislation
Repealed by Law of Property Act 1925
Status: Repealed
Text of statute as originally enacted

The Fraudulent Conveyances Act 1571 was an important law in England. It helped to stop people from unfairly hiding or giving away their property. This was done to avoid paying money they owed to others. This law is also known as the Statute of 13 Elizabeth.

In the United Kingdom, parts of this 1571 Act were later replaced. First, the Law of Property Act 1925 took over. Then, the Insolvency Act 1986 replaced those rules. These new laws still deal with similar problems today.

What the Act Said

This old law was made to stop tricky and dishonest ways of moving property. People would pretend to sell or give away their land, goods, or money. They did this to stop people they owed money to (called creditors) from getting it.

The Act said that any such dishonest deals were completely invalid. This meant they had no legal power. It was like they never happened. This rule applied if the deal was made to delay, stop, or cheat creditors.

However, there was an important exception. If property was sold or given away honestly and for a good reason, the law did not apply. This was true as long as the buyer or receiver did not know about any dishonest plans.

Why This Law Was Needed

Stopping Dishonest Deals

In 1571, many people were using unfair tricks to avoid paying their debts. This law was created to stop these dishonest transfers of property. It aimed to make sure creditors could collect the money they were owed.

Hiding in Sanctuaries

Before the 1600s, England had special places called "sanctuaries." These were often churches or certain areas where the King's laws did not fully apply. People who owed money (debtors) would sometimes sell their property cheaply to friends or family. They would promise to buy it back later.

Then, these debtors would move to a sanctuary. They would wait there until their creditors gave up trying to collect the money. Or, they would wait until the creditors offered a very low settlement. The 1571 Act aimed to prevent these kinds of tricks.

Important Court Cases

Over the years, courts used the Fraudulent Conveyances Act 1571 in many cases. Here are a couple of examples that show how it worked:

  • Alderson v Temple (1768): In this case, a judge named Lord Mansfield said the Act was not just about hiding property. It also applied to giving unfair advantages to some creditors over others. He said that if a person gave money or property to one creditor just before going bankrupt, it was wrong. This was because it stopped all creditors from getting a fair share.
  • Twyne's Case (1601): This famous case showed that if someone sold property but kept it, the deal was suspicious. For example, if a debtor sold their goods but still used them, it looked like a trick. The court decided this kind of deal was against the Act. It meant the sale was not real and was made to cheat creditors.

Where Else This Law Applied

The ideas from the Fraudulent Conveyances Act 1571 spread far and wide.

United States

After the American Revolution, many states in the United States made their own versions of this law. Later, these laws were updated. The Uniform Fraudulent Conveyances Act (UFCA) came first in 1918. Then, the Uniform Fraudulent Transfer Act (UFTA) replaced it in 1984. Most US states now use the UFTA.

Also, US bankruptcy laws include rules similar to the 1571 Act. These rules help to reverse dishonest transfers made by a person before they declare bankruptcy. This ensures fairness for all creditors.

Commonwealth Countries

When England had colonies, English laws often became part of their legal systems. For example, in Western Canada, English laws from 1885 were adopted. Many former colonies have since passed their own similar laws. However, the original 1571 Act might still be in effect in some places. Countries like Australia and New Zealand also have similar rules to stop fraudulent transfers.

See also

  • Fraudulent conveyance
  • UK insolvency law
  • Statute of Bankrupts Act 1542
  • Arbuthnot Leasing International Ltd v Havelet Leasing Ltd (No 2) [1990] BCC 36
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