Hall (Liquidator of Ethos Solutions Ltd) v Nasim & Ors

Hall (Liquidator of Ethos Solutions Ltd) v Nasim & Ors

The court held that the Liquidator's claim based on 'no consideration' (para 23(a)) was inconsistent and self-defeating, disclosing no reasonable grounds and was struck out. The claim for PAYE/NIC for the year ended 31 December 2011 was unparticularised, speculative, and an abuse of process, and was also struck out. The alternative undervalue case (para 23(b)) raised a novel point and was not plainly untenable, so the Liquidator was given an opportunity to amend and particularise. The proceedings were not struck out in their entirety, but the pleadings required substantial amendment.

Parties
Applicant: Michaela Joy Hall (As Liquidator of Ethos Solutions Limited); Respondents: Muhammad Nasim & 62 Others
Jurisdiction
England and Wales
Judgment Date
04 February 2021
Procedural Posture
Insolvency Application (strike Out) / Interlocutory Application – Strike Out and Summary Judgment
Outcome
Partial strike out granted; permission to amend granted in part; claim for 2011 tax year struck out; claim based on 'no consideration' struck out; alternative undervalue case may be amended.
Legal Topics
Transactions at Undervalue, Abuse of Process, Strike Out Applications, Paye/nic Liabilities, Employee Benefit Trusts
Insolvency Law Tax Law Civil Procedure Transactions at Undervalue Abuse of Process Strike Out Applications Paye/nic Liabilities Employee Benefit Trusts

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Parties

Michaela Joy Hall (As Liquidator of Ethos Solutions Limited)

Applicant

Muhammad Nasim & 62 Others

Respondents

Procedural Posture

Insolvency Application (strike Out) / Interlocutory Application – Strike Out and Summary Judgment

Legal Issues

  1. 1 Whether the Liquidator's claim under s.423 Insolvency Act 1986 discloses reasonable grounds for bringing the claim
  2. 2 Whether the claim is an abuse of process under CPR 3.4(2)(b)
  3. 3 Whether tax liabilities can be factored into the undervalue analysis under s.423

Ratio Decidendi

The court held that the Liquidator's claim based on 'no consideration' (para 23(a)) was inconsistent and self-defeating, disclosing no reasonable grounds and was struck out. The claim for PAYE/NIC for the year ended 31 December 2011 was unparticularised, speculative, and an abuse of process, and was also struck out. The alternative undervalue case (para 23(b)) raised a novel point and was not plainly untenable, so the Liquidator was given an opportunity to amend and particularise. The proceedings were not struck out in their entirety, but the pleadings required substantial amendment.

Court Disposition

Partial strike out granted; permission to amend granted in part; claim for 2011 tax year struck out; claim based on 'no consideration' struck out; alternative undervalue case may be amended.

Orders

  • Paragraphs 20 and 23(a) of the Points of Claim struck out.
  • All necessary consequential amendments to be made.