Khawaja v Stefanova & Ors [2025] EWHC 1745 (Ch) (08 July 2025)

Khawaja v Stefanova & Ors [2025] EWHC 1745 (Ch) (08 July 2025)

The court found that Ms Stefanova executed the Trust Deed with the intention of putting her property beyond the reach of Mr Khawaja as a creditor, in anticipation of adverse costs and damages orders, and not as a genuine divestment for her daughter's benefit. The Trust Deed was therefore a transaction to defraud creditors under section 423 of the Insolvency Act 1986. The interim charging order should be made final to secure Mr Khawaja's claims. The evidence did not support a finding that the Trust Deed was a sham in the strict legal sense, but it was voidable as a transaction defrauding creditors.

Citation
[2025] EWHC 1745 (Ch)
Parties
Petitioner: Mohammed Saleem Khawaja; First Respondent: Stela Stefanova; Second Respondent: BiotechnologiesUK Limited; Third Respondent: Dermamed Solutions Limited
Jurisdiction
England and Wales
Judgment Date
08 July 2025
Procedural Posture
Company/chancery Application for Final Charging Order and Related Relief / Final Hearing on Interim Charging Order and Related Issues
Outcome
Application granted in part; interim charging order made final; Trust Deed set aside as a transaction to defraud creditors under section 423 of the Insolvency Act 1986.
Legal Topics
Sham Trusts, Fraudulent Conveyance, Charging Orders, Directors' Duties, Unfair Prejudice, Disclosure Obligations
Company Law Insolvency Trusts and Equity Civil Procedure Sham Trusts Fraudulent Conveyance Charging Orders Directors' Duties +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 6 Party arguments 2 Amounts and remedies 8
Sign in to unlock

Parties

Mohammed Saleem Khawaja

Petitioner

Stela Stefanova

First Respondent

BiotechnologiesUK Limited

Second Respondent

Dermamed Solutions Limited

Third Respondent

Procedural Posture

Company/chancery Application for Final Charging Order and Related Relief / Final Hearing on Interim Charging Order and Related Issues

Legal Issues

  1. 1 Whether the Trust Deed executed by Ms Stefanova was a sham
  2. 2 Whether the Trust Deed was a transaction to defraud creditors under section 423 of the Insolvency Act 1986
  3. 3 Whether the interim charging order over Ms Stefanova's property should be made final

Ratio Decidendi

The court found that Ms Stefanova executed the Trust Deed with the intention of putting her property beyond the reach of Mr Khawaja as a creditor, in anticipation of adverse costs and damages orders, and not as a genuine divestment for her daughter's benefit. The Trust Deed was therefore a transaction to defraud creditors under section 423 of the Insolvency Act 1986. The interim charging order should be made final to secure Mr Khawaja's claims. The evidence did not support a finding that the Trust Deed was a sham in the strict legal sense, but it was voidable as a transaction defrauding creditors.

Court Disposition

Application granted in part; interim charging order made final; Trust Deed set aside as a transaction to defraud creditors under section 423 of the Insolvency Act 1986.

Orders

  • The interim charging order over Ms Stefanova's interest in the Highgate property is made final in favour of Mr Khawaja.
  • The Trust Deed dated 7 December 2022 is set aside pursuant to section 423 of the Insolvency Act 1986.