Novoship (UK) LTD & Ors v Vladimir Mikhaylyuk [2014] EWCA Civ 252 (12 March 2014)

Novoship (UK) LTD & Ors v Vladimir Mikhaylyuk [2014] EWCA Civ 252 (12 March 2014)

The judge at first instance erred in exercising his discretion by failing to consider the full factual history and the equitable position between the parties, particularly the fact that the loans from Miss Mikhaylyuk enabled the preservation of the asset and increased the funds available to the judgment creditors. The Court of Appeal held that the discretion should have been exercised to permit repayment of the loan to Miss Mikhaylyuk before making the third party debt order final in favour of the Respondents.

Citation
[2014] EWCA Civ 252
Parties
Respondents/claimants: Novoship (UK) Limited and others; Appellant/first Defendant: Vladimir Mikhaylyuk
Jurisdiction
England and Wales
Judgment Date
12 March 2014
Procedural Posture
Civil Appeal / Appeal From High Court (commercial Court) to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Freezing Orders, Third Party Debt Orders, Enforcement of Judgments, Creditor Preference, Discretionary Remedies
Civil Procedure Commercial Law Equity Freezing Orders Third Party Debt Orders Enforcement of Judgments Creditor Preference Discretionary Remedies

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Parties

Novoship (UK) Limited and others

Respondents/claimants

Vladimir Mikhaylyuk

Appellant/first Defendant

Procedural Posture

Civil Appeal / Appeal From High Court (commercial Court) to Court of Appeal

Legal Issues

  1. 1 Whether the court should vary a freezing order to permit repayment of a loan to a family member from sale proceeds subject to the order
  2. 2 Whether a final third party debt order should be made in favour of judgment creditors without provision for repayment of an unsecured loan to a third party
  3. 3 How the court should exercise its discretion in the context of competing unsecured creditors

Ratio Decidendi

The judge at first instance erred in exercising his discretion by failing to consider the full factual history and the equitable position between the parties, particularly the fact that the loans from Miss Mikhaylyuk enabled the preservation of the asset and increased the funds available to the judgment creditors. The Court of Appeal held that the discretion should have been exercised to permit repayment of the loan to Miss Mikhaylyuk before making the third party debt order final in favour of the Respondents.

Court Disposition

Appeal allowed

Orders

  • The freezing order is to be varied to permit repayment of £8,336.23 to Miss Mikhaylyuk from Mr Mikhaylyuk's share of the sale proceeds.
  • The third party debt order in favour of the Respondents is to be made final in respect of the balance after such repayment.