Apollo Communications Centre Ltd (In Liquidation) & Ors v Rahmann & Ors

Apollo Communications Centre Ltd (In Liquidation) & Ors v Rahmann & Ors

The particulars of claim, as clarified and subject to certain amendments, adequately plead economic activity for VAT purposes and a cause of action for dishonest assistance and fraudulent trading. The fact that the transactions may be void or in breach of duty under domestic law does not preclude VAT liability or the existence of economic activity. The ninth defendant's knowledge of and participation in the fraudulent scheme is sufficiently pleaded. The application to strike out is dismissed.

Parties
Claimant/respondent: Apollo Communications Centre Ltd (In Liquidation); Claimant/respondent: Second Claimant (Joint Liquidator); Claimant/respondent: Third Claimant (Joint Liquidator); Defendant/applicant: Rahmann; Defendant: Gara Technologies Ltd; Defendant: Mr. Atroshi; Defendant: Reems; Defendant: Mr. Khan; Defendant: Excell; Defendant: Mr. Hanif; Defendant: Wetherby; Defendant: Mr. Simon Bhullar
Jurisdiction
England and Wales
Judgment Date
14 June 2007
Procedural Posture
Civil / Application to Strike Out Particulars of Claim Against Ninth Defendant
Outcome
Application to strike out dismissed; permission to amend particulars of claim granted; costs awarded to claimants with reduction for debt point.
Legal Topics
VAT Fraud, Director's Duties, Fraudulent Trading, Dishonest Assistance, Economic Activity for VAT Purposes, Strike Out Applications
Insolvency Tax Law Company Law Equity VAT Fraud Director's Duties Fraudulent Trading Dishonest Assistance +2 more

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Parties

Apollo Communications Centre Ltd (In Liquidation)

Claimant/respondent

Second Claimant (Joint Liquidator)

Claimant/respondent

Third Claimant (Joint Liquidator)

Claimant/respondent

Rahmann

Defendant/applicant

Gara Technologies Ltd

Defendant

Mr. Atroshi

Defendant

Reems

Defendant

Mr. Khan

Defendant

Excell

Defendant

Mr. Hanif

Defendant

Wetherby

Defendant

Mr. Simon Bhullar

Defendant

Procedural Posture

Civil / Application to Strike Out Particulars of Claim Against Ninth Defendant

Legal Issues

  1. 1 Whether the particulars of claim against the ninth defendant disclose a reasonable cause of action or are an abuse of process
  2. 2 Whether the pleaded facts amount to economic activity for VAT purposes even if the transactions are fraudulent or void under domestic law
  3. 3 Whether the ninth defendant can be liable for dishonest assistance without knowledge of the identity of the defrauded company/director

Ratio Decidendi

The particulars of claim, as clarified and subject to certain amendments, adequately plead economic activity for VAT purposes and a cause of action for dishonest assistance and fraudulent trading. The fact that the transactions may be void or in breach of duty under domestic law does not preclude VAT liability or the existence of economic activity. The ninth defendant's knowledge of and participation in the fraudulent scheme is sufficiently pleaded. The application to strike out is dismissed.

Court Disposition

Application to strike out dismissed; permission to amend particulars of claim granted; costs awarded to claimants with reduction for debt point.

Orders

  • Application to strike out particulars of claim against ninth defendant dismissed.
  • Permission granted to amend particulars of claim as indicated in judgment.