Novoship (UK) LTD & Ors v Vladimir Mikhaylyuk

Novoship (UK) LTD & Ors v Vladimir Mikhaylyuk

The judge's exercise of discretion was flawed for failing to consider the full factual history and equitable circumstances, particularly that Miss Mikhaylyuk's loans enabled the property to be sold at market value, benefiting the Respondents. Equity required repayment of her loan from the proceeds before the third party debt order became final.

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 Judgment on Variation of Freezing Order and Third Party Debt Order
Outcome
Appeal allowed
Legal Topics
Freezing Orders, Third Party Debt Orders, Creditor Preference, Exercise of Judicial Discretion, Repayment of Loans From Sale Proceeds
Civil Procedure Equity and Trusts Insolvency Freezing Orders Third Party Debt Orders Creditor Preference Exercise of Judicial Discretion Repayment of Loans From Sale Proceeds

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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 Judgment on Variation of Freezing Order and Third Party Debt Order

Legal Issues

  1. 1 Whether the judge erred in exercising discretion to make a third party debt order final without provision for repayment of a loan to the judgment debtor's daughter
  2. 2 Whether the freezing order should have been varied to permit repayment of the loan from sale proceeds
  3. 3 Whether the Respondents were unjustly preferred over another creditor

Ratio Decidendi

The judge's exercise of discretion was flawed for failing to consider the full factual history and equitable circumstances, particularly that Miss Mikhaylyuk's loans enabled the property to be sold at market value, benefiting the Respondents. Equity required repayment of her loan from the proceeds before the third party debt order became final.

Court Disposition

Appeal allowed

Orders

  • Any third party debt order in favour of the Respondents to be subject to a proviso requiring repayment of £8,336.23 to Miss Mikhaylyuk prior to becoming final.