Hotel Portfolio II UK Limited (in liquidation) v Marlborough Developments Limited & Ors

Hotel Portfolio II UK Limited (in liquidation) v Marlborough Developments Limited & Ors

The June Settlement, promissory notes, and charges were a collusive transaction at an undervalue between Mr Ruhan and Dr Smith (via MDL and Ozturk), with no real consideration, designed to put assets beyond HPII's reach and prejudice its judgment rights. The Ozturk Proceedings and Default Judgment were abusive, collusive, and meritless, engineered to inflate rival creditor claims and obstruct enforcement. Dr Smith, MDL, and Ozturk committed the Marex tort by procuring and assisting Mr Ruhan's breach of HPII's judgment rights. Relief under section 423, final injunctions, and orders setting aside the Default Judgment and striking out the Ozturk Proceedings are granted.

Parties
Claimant / Applicant: Hotel Portfolio II UK Limited (In Liquidation); Defendant / Respondent: Marlborough Developments Limited; Defendant / Respondent: Ozturk 2 Recoveries Limited; Defendant / Respondent: Dr Gerald Martin Smith; Claimant / Respondent (ozturk Proceedings): Chepstow Property Co. Limited; Claimant / Respondent (ozturk Proceedings): Brynna Property Co. Limited; Claimant / Respondent (ozturk Proceedings): Llanharan Property Co. Limited; Claimant / Respondent (ozturk Proceedings): SCDS Corporation Inc; Claimant / Respondent (ozturk Proceedings): Dunedin Holdings Limited; Claimant / Respondent (ozturk Proceedings): SCDS London Limited (previously Coegi Properties Limited); Claimant / Respondent (ozturk Proceedings): Burtonwood Dev. Limited; Defendant / Respondent (ozturk Proceedings): Mr Andrew Joseph Ruhan
Jurisdiction
England and Wales
Judgment Date
12 March 2024
Procedural Posture
Civil Commercial / Insolvency / Fraud / Final Judgment After Trial
Outcome
Claim allowed. Relief granted under section 423 Insolvency Act 1986; final injunctions granted for Marex tort; Default Judgment set aside; Ozturk Proceedings struck out as abusive.
Legal Topics
Transaction at an Undervalue, Abuse of Process, Set Aside of Default Judgment, Tortious Interference With Judgment Rights (marex Tort), Section 423 Insolvency Act 1986, Reflective Loss, Injunctions
Insolvency Civil Fraud Tort Civil Procedure Transaction at an Undervalue Abuse of Process Set Aside of Default Judgment Tortious Interference With Judgment Rights (marex Tort) +3 more

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Parties

Hotel Portfolio II UK Limited (In Liquidation)

Claimant / Applicant

Marlborough Developments Limited

Defendant / Respondent

Ozturk 2 Recoveries Limited

Defendant / Respondent

Dr Gerald Martin Smith

Defendant / Respondent

Chepstow Property Co. Limited

Claimant / Respondent (ozturk Proceedings)

Brynna Property Co. Limited

Claimant / Respondent (ozturk Proceedings)

Llanharan Property Co. Limited

Claimant / Respondent (ozturk Proceedings)

SCDS Corporation Inc

Claimant / Respondent (ozturk Proceedings)

Dunedin Holdings Limited

Claimant / Respondent (ozturk Proceedings)

SCDS London Limited (previously Coegi Properties Limited)

Claimant / Respondent (ozturk Proceedings)

Burtonwood Dev. Limited

Claimant / Respondent (ozturk Proceedings)

Mr Andrew Joseph Ruhan

Defendant / Respondent (ozturk Proceedings)

Procedural Posture

Civil Commercial / Insolvency / Fraud / Final Judgment After Trial

Legal Issues

  1. 1 Whether the June Settlement, promissory notes, and charges constituted a transaction at an undervalue under section 423 of the Insolvency Act 1986
  2. 2 Whether the Ozturk Proceedings and Default Judgment were abusive, collusive, and should be set aside and struck out
  3. 3 Whether Dr Smith, MDL, and Ozturk committed the Marex tort by procuring breach of HPII's judgment rights against Mr Ruhan

Ratio Decidendi

The June Settlement, promissory notes, and charges were a collusive transaction at an undervalue between Mr Ruhan and Dr Smith (via MDL and Ozturk), with no real consideration, designed to put assets beyond HPII's reach and prejudice its judgment rights. The Ozturk Proceedings and Default Judgment were abusive, collusive, and meritless, engineered to inflate rival creditor claims and obstruct enforcement. Dr Smith, MDL, and Ozturk committed the Marex tort by procuring and assisting Mr Ruhan's breach of HPII's judgment rights. Relief under section 423, final injunctions, and orders setting aside the Default Judgment and striking out the Ozturk Proceedings are granted.

Court Disposition

Claim allowed. Relief granted under section 423 Insolvency Act 1986; final injunctions granted for Marex tort; Default Judgment set aside; Ozturk Proceedings struck out as abusive.

Orders

  • Declaration that the promissory notes and MDL charges are transactions at an undervalue and of no effect; set aside of those documents and any asset transfers under them.
  • Order requiring MDL to re-transfer Minardi shares and any other assets received under the charges back to Mr Ruhan (subject to freezing order).