Sean Richard Ormsby Lindsay v Jared Michael O’Loughnane & Ors

Sean Richard Ormsby Lindsay v Jared Michael O’Loughnane & Ors

The court held that the equitable charges in favour of French and Heaphy were validly executed before the claimant's charging orders, were not shams, and were sufficiently certain to create enforceable security over the properties. The charges were not transactions at an undervalue under section 423 Insolvency Act 1986, as the terms were commercially reasonable and there was no significant undervalue. Although the charges would have breached the WFO absent consent, the claimant (through his solicitors) had consented or was estopped from objecting, and thus the charges were not unenforceable. Limitation did not bar the claims. Accordingly, French and Heaphy were entitled to payment out of...

Parties
Claimant/applicant: Sean Richard Ormsby Lindsay; First Respondent: Jared Michael O’Loughnane; Second Respondent: Karen Drayton (on behalf of the estate of James French deceased); Third Respondent: Paul Drayton; Fourth Respondent: Andrew Heaphy
Jurisdiction
England and Wales
Judgment Date
29 August 2024
Procedural Posture
High Court Civil Enforcement Proceedings (king's Bench Division, England and Wales) / Judgment on Applications for Payment Out of Proceeds of Sale of Properties, Priority of Equitable Charges, and Related Reliefs
Outcome
French and Heaphy entitled to payment out of proceeds of sale in priority to the claimant; claimant's application for payment out refused to the extent of those prior claims; section 423 claim dismissed; limitation defence to section 423 claim allowed; limitation defence to French and Heaphy claims refused.
Legal Topics
Enforcement of Judgments, Equitable Charges, Priority of Security Interests, Transactions at an Undervalue, Freezing Injunctions (wfo), Section 423 Insolvency Act 1986, Limitation of Actions, Estoppel, Illegality and Public Policy
Civil Procedure Property Law Equity and Trusts Insolvency Law Enforcement of Judgments Equitable Charges Priority of Security Interests Transactions at an Undervalue +5 more

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Parties

Sean Richard Ormsby Lindsay

Claimant/applicant

Jared Michael O’Loughnane

First Respondent

Karen Drayton (on behalf of the estate of James French deceased)

Second Respondent

Paul Drayton

Third Respondent

Andrew Heaphy

Fourth Respondent

Procedural Posture

High Court Civil Enforcement Proceedings (king's Bench Division, England and Wales) / Judgment on Applications for Payment Out of Proceeds of Sale of Properties, Priority of Equitable Charges, and Related Reliefs

Legal Issues

  1. 1 Whether equitable charges in favour of French and Heaphy were validly created and have priority over the claimant's charging orders
  2. 2 Whether the charges were shams or lacked certainty
  3. 3 Whether the charges were transactions at an undervalue under section 423 Insolvency Act 1986

Ratio Decidendi

The court held that the equitable charges in favour of French and Heaphy were validly executed before the claimant's charging orders, were not shams, and were sufficiently certain to create enforceable security over the properties. The charges were not transactions at an undervalue under section 423 Insolvency Act 1986, as the terms were commercially reasonable and there was no significant undervalue. Although the charges would have breached the WFO absent consent, the claimant (through his solicitors) had consented or was estopped from objecting, and thus the charges were not unenforceable. Limitation did not bar the claims. Accordingly, French and Heaphy were entitled to payment out of...

Court Disposition

French and Heaphy entitled to payment out of proceeds of sale in priority to the claimant; claimant's application for payment out refused to the extent of those prior claims; section 423 claim dismissed; limitation defence to section 423 claim allowed; limitation defence to French and Heaphy claims refused.

Orders

  • Net amounts advanced by French and Heaphy, with simple interest at 4% over Coutts base rate from 25 July 2010, to be paid out to them from proceeds of sale held in court.
  • Claimant's application for payment out refused to the extent of sums due to French and Heaphy.