London Capital & Finance Plc & Ors v Michael Andrew Thomson & Ors

London Capital & Finance Plc & Ors v Michael Andrew Thomson & Ors

LCF was operated as a fraudulent trading scheme with intent to defraud creditors and for a fraudulent purpose. The business was systematically misrepresented to investors, operated as a Ponzi scheme, and substantial assets were misappropriated via artificial transactions (SPAs) to the benefit of the defendants. Mr Thomson and Mr Golding were found to be knowing participants and defaulting fiduciaries; Surge, Mr Careless, Mr Russell-Murphy, GP, and Mr Sedgwick were knowing participants and liable for knowing receipt and dishonest assistance. The court found the proprietary claims established, ordered declarations and accounts, and reserved quantum for further submissions.

Parties
Claimant: London Capital & Finance Plc (in administration); Claimant: Finbarr O’Connell, Adam Stephens, Henry Shinners, Colin Hardman, Geoffrey Rowley (joint administrators of London Capital & Finance Plc); Claimant: London Oil & Gas Limited (in administration); Claimant: Finbarr O’Connell, Adam Stephens, Colin Hardman, Lane Bednash (joint administrators of London Oil & Gas Limited); Defendant: Michael Andrew Thomson; Defendant: Simon Hume-Kendall; Defendant: Elten Barker; Defendant: Spencer Golding; Defendant: Paul Careless; Defendant: Surge Financial Limited; Defendant: John Russell-Murphy; Defendant: Robert Sedgwick; Defendant: Grosvenor Park Intelligent Investment Limited; Defendant: Helen Hume-Kendall
Jurisdiction
England and Wales
Judgment Date
14 November 2024
Procedural Posture
Civil Fraud/company/equity / Final Judgment After Full Trial
Outcome
Judgment for the Claimants. Defendants found liable for fraudulent trading, breach of fiduciary duty, knowing receipt, dishonest assistance, and subject to proprietary claims. Quantum and terms of orders reserved for further submissions.
Legal Topics
Fraudulent Trading, Breach of Fiduciary Duty, Knowing Receipt, Dishonest Assistance, Constructive Trust, Tracing, Misrepresentation, Ponzi Scheme, Directors' Duties, Proprietary Claims
Fraud Company Law Equity and Trusts Insolvency Financial Services Regulation Fraudulent Trading Breach of Fiduciary Duty Knowing Receipt +7 more

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Parties

London Capital & Finance Plc (in administration)

Claimant

Finbarr O’Connell, Adam Stephens, Henry Shinners, Colin Hardman, Geoffrey Rowley (joint administrators of London Capital & Finance Plc)

Claimant

London Oil & Gas Limited (in administration)

Claimant

Finbarr O’Connell, Adam Stephens, Colin Hardman, Lane Bednash (joint administrators of London Oil & Gas Limited)

Claimant

Michael Andrew Thomson

Defendant

Simon Hume-Kendall

Defendant

Elten Barker

Defendant

Spencer Golding

Defendant

Paul Careless

Defendant

Surge Financial Limited

Defendant

John Russell-Murphy

Defendant

Robert Sedgwick

Defendant

Grosvenor Park Intelligent Investment Limited

Defendant

Helen Hume-Kendall

Defendant

Procedural Posture

Civil Fraud/company/equity / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether LCF was operated as a fraudulent trading scheme with intent to defraud creditors or for a fraudulent purpose
  2. 2 Whether the defendants knowingly participated in fraudulent trading and/or breached fiduciary duties
  3. 3 Whether assets misappropriated from LCF are subject to proprietary claims and constructive trusts

Ratio Decidendi

LCF was operated as a fraudulent trading scheme with intent to defraud creditors and for a fraudulent purpose. The business was systematically misrepresented to investors, operated as a Ponzi scheme, and substantial assets were misappropriated via artificial transactions (SPAs) to the benefit of the defendants. Mr Thomson and Mr Golding were found to be knowing participants and defaulting fiduciaries; Surge, Mr Careless, Mr Russell-Murphy, GP, and Mr Sedgwick were knowing participants and liable for knowing receipt and dishonest assistance. The court found the proprietary claims established, ordered declarations and accounts, and reserved quantum for further submissions.

Court Disposition

Judgment for the Claimants. Defendants found liable for fraudulent trading, breach of fiduciary duty, knowing receipt, dishonest assistance, and subject to proprietary claims. Quantum and terms of orders reserved for further submissions.

Orders

  • Declarations of liability for fraudulent trading under s.246ZA Insolvency Act 1986 against Mr Thomson, Mr Golding, Mr Careless, Surge, Mr Russell-Murphy, GP, and Mr Sedgwick
  • Declarations of breach of fiduciary duty against Mr Thomson and Mr Golding