Hotel Portfolio II UK Ltd v Marlborough Developments Ltd & Ors [2024] EWHC 3075 (Comm) (29 November 2024)

Hotel Portfolio II UK Ltd v Marlborough Developments Ltd & Ors [2024] EWHC 3075 (Comm) (29 November 2024)

The court found that the June Settlement and related transactions were sham arrangements orchestrated by Dr Smith and Mr Ruhan to defraud creditors, particularly HPII, by putting assets beyond reach and prejudicing HPII's judgment rights. The transactions were at an undervalue, provided no real consideration, and were entered into for a prohibited purpose under s.423 Insolvency Act 1986. The Ozturk Proceedings and Default Judgment were an abuse of process. The defendants committed the Marex tort by intentionally interfering with HPII's judgment rights. HPII was entitled to relief under s.423, final injunctions, and orders setting aside the Default Judgment and striking out the Ozturk...

Citation
[2024] EWHC 3075 (Comm)
Parties
Claimant / Applicant: Hotel Portfolio II UK Limited (In Liquidation); Defendant: Marlborough Developments Limited; Defendant: Ozturk 2 Recoveries Limited; Defendant: Dr Gerald Martin Smith; Claimant / Respondent: Ozturk 2 Recoveries Limited; Claimant / Respondent: Marlborough Developments Limited; Claimant / Respondent: Chepstow Property Co. Limited; Claimant / Respondent: Bryanna Property Co. Limited; Claimant / Respondent: Llanharan Property Co. Limited; Claimant / Respondent: SCDS Corporation Inc; Claimant / Respondent: Dunedin Holdings Limited; Claimant / Respondent: SCDS London Limited (previously Coegi Properties Limited); Claimant / Respondent: Burtonwood Dev. Limited; Defendant / Respondent: Mr Andrew Joseph Ruhan
Jurisdiction
England and Wales
Judgment Date
29 November 2024
Procedural Posture
Commercial Court Proceedings (claims and Applications) / Final Trial and Determination of Claims and Applications
Outcome
Claims and applications by HPII succeeded in full.
Legal Topics
Transaction at Undervalue, Fraudulent Conveyance, Abuse of Process, Default Judgment, Injunctions, Tortious Interference With Judgment Rights, Set Aside of Judgment, Restoration of Assets
Insolvency Civil Fraud Tort Civil Procedure Transaction at Undervalue Fraudulent Conveyance Abuse of Process Default Judgment +4 more

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Parties

Hotel Portfolio II UK Limited (In Liquidation)

Claimant / Applicant

Marlborough Developments Limited

Defendant

Ozturk 2 Recoveries Limited

Defendant

Dr Gerald Martin Smith

Defendant

Ozturk 2 Recoveries Limited

Claimant / Respondent

Marlborough Developments Limited

Claimant / Respondent

Chepstow Property Co. Limited

Claimant / Respondent

Bryanna Property Co. Limited

Claimant / Respondent

Llanharan Property Co. Limited

Claimant / Respondent

SCDS Corporation Inc

Claimant / Respondent

Dunedin Holdings Limited

Claimant / Respondent

SCDS London Limited (previously Coegi Properties Limited)

Claimant / Respondent

Burtonwood Dev. Limited

Claimant / Respondent

Mr Andrew Joseph Ruhan

Defendant / Respondent

Procedural Posture

Commercial Court Proceedings (claims and Applications) / Final Trial and Determination of Claims and Applications

Legal Issues

  1. 1 Whether the June Settlement and related transactions constituted transactions at an undervalue under s.423 Insolvency Act 1986
  2. 2 Whether the Ozturk Proceedings and Default Judgment were a sham and an abuse of process
  3. 3 Whether the defendants committed the Marex tort by interfering with HPII's judgment rights

Ratio Decidendi

The court found that the June Settlement and related transactions were sham arrangements orchestrated by Dr Smith and Mr Ruhan to defraud creditors, particularly HPII, by putting assets beyond reach and prejudicing HPII's judgment rights. The transactions were at an undervalue, provided no real consideration, and were entered into for a prohibited purpose under s.423 Insolvency Act 1986. The Ozturk Proceedings and Default Judgment were an abuse of process. The defendants committed the Marex tort by intentionally interfering with HPII's judgment rights. HPII was entitled to relief under s.423, final injunctions, and orders setting aside the Default Judgment and striking out the Ozturk...

Court Disposition

Claims and applications by HPII succeeded in full.

Orders

  • Relief granted under s.423 Insolvency Act 1986 setting aside the June Settlement and related transactions as transactions at an undervalue.
  • Final injunctions granted restraining the defendants from interfering with HPII's judgment rights under the Ruhan Trial Judgment.