A WHEN a company is in liquidation it is the duty of the liquidator to collect in the assets of the company and investigate the actions of the company directors.

This duty includes looking at the transactions of the company prior to the liquidation.

The scenario described seems to be what is classed as a 'preference' under the Insolvency Act.

This means that you appear to have been 'preferred' as a creditor by your brother (who I am assuming was a director of his company) and put in a better position on liquidation than you would have been had he not paid you earlier.

As you are 'connected' to your brother then, if the liquidator can demonstrate that you have been placed in a better position than you would have been if he had not made the payment, then he may seek to overturn the transaction, requiring you to repay the money.

I'm afraid that your brother's wish to make sure you were paid what you were owed may not have been enough and you may end up having to pay the money back and get in line with the other 'unsecured' creditors.

You should take specific legal advice on this matter and bear in mind that you may even have to pay the legal costs of the liquidator if you refuse to make repayment and force the liquidator to seek an order of the court.

Q MY neighbour has a right of way across a dirt and gravel path which runs along the bottom of my garden, leading from a public footpath to his garden.

He has told me that he intends to fence off the path and tarmac it. He claims that he can do this because his deeds say that he owns the right of way.

The gravel path has deteriorated over the years but I don't want it to be tarmaced and I certainly don't want a fence putting up across my garden. What can I do?

A There are a number of legal rules relating to rights of way and they can be confusing, for both the person who owns the land and the person who owns the right to pass along it.

It is a surprisingly common misconception that being entitled a right of way means that you have some ownership of the effected land.

This may be because we tend to refer to a path itself as being the right of way.

Indeed, my dictionary defines a right of way as "a path or road over private land which people are legally allowed to pass along".

In fact, this is legally incorrect; a right of way is not a tangible piece of land, but an intangible right to do something.

Owning a right of way does not mean that you own the land (the way), it means that you own a right to pass along the way.

As your neighbour does not own the piece of your garden which he uses, he does not have the right to fence it off without your permission.

If he did fence off the land without your permission, after a number of years, he may be entitled to claim that he has acquired ownership of it from you.

You therefore need to speak to your neighbour to ask him not to put up a fence and if he does it anyway, you may need to go to court to resolve the matter and you would seek your legal costs from your neighbour.

As to the condition of the path, your neighbour is entitled to maintain it, at his own expense, which may involve filling in potholes with gravel.

However, if the path has only ever been dirt and gravel, whilst your neighbour is entitled to maintain the path to this standard, he is not entitled to improve the path beyond its original condition.

He is not therefore entitled to tarmac the path without your permission.

Sensitively handled, you may be able to reach an understanding with your neighbour which does not involve him fencing off part of your garden or putting down tarmac.

However, if your neighbour persists, the matter may end up in court and that would be unfortunate for all concerned due to the potential costs that could be incurred by both sides.