Nicholson & Anor v Ghuman & Ors, Re Octavian Security Ltd [2016] EWHC 3509 (Ch) (15 December 2016)

Nicholson & Anor v Ghuman & Ors, Re Octavian Security Ltd [2016] EWHC 3509 (Ch) (15 December 2016)

Sukhjit Ghuman and Kiranjit Ghuman were de facto directors of Octavian Security Limited at all material times. The payments to them and to C E Security Limited were undocumented, unjustified, and constituted transactions at an undervalue and/or misfeasance. The company was insolvent at all material times. Both are jointly and severally liable to restore the sums to the company under s.212 of the Insolvency Act 1986.

Citation
[2016] EWHC 3509 (Ch)
Parties
Applicant: Nicholas Nicholson; Applicant: Stratford Hamilton; Respondent: Sukhjit Ghuman; Respondent: Kiranjit Ghuman; Respondent: C E Security Limited (formerly Octavian Continental Limited)
Jurisdiction
England and Wales
Judgment Date
15 December 2016
Procedural Posture
Insolvency Misfeasance Proceedings / Judgment After Trial
Outcome
Claims against Sukhjit Ghuman and Kiranjit Ghuman succeed. Claims against C E Security Limited compromised by Tomlin order.
Legal Topics
Transactions at Undervalue, Director Misfeasance, Breach of Fiduciary Duty, Unlawful Distributions, Preference, Director De Facto Status
Insolvency Company Law Transactions at Undervalue Director Misfeasance Breach of Fiduciary Duty Unlawful Distributions Preference Director De Facto Status

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Parties

Nicholas Nicholson

Applicant

Stratford Hamilton

Applicant

Sukhjit Ghuman

Respondent

Kiranjit Ghuman

Respondent

C E Security Limited (formerly Octavian Continental Limited)

Respondent

Procedural Posture

Insolvency Misfeasance Proceedings / Judgment After Trial

Legal Issues

  1. 1 Whether payments to Sukhjit Ghuman and Kiranjit Ghuman were transactions at an undervalue or preferences under the Insolvency Act 1986
  2. 2 Whether Sukhjit Ghuman and Kiranjit Ghuman were de facto directors of Octavian Security Limited
  3. 3 Whether Sukhjit Ghuman and Kiranjit Ghuman are liable for misfeasance under s.212 of the Insolvency Act 1986

Ratio Decidendi

Sukhjit Ghuman and Kiranjit Ghuman were de facto directors of Octavian Security Limited at all material times. The payments to them and to C E Security Limited were undocumented, unjustified, and constituted transactions at an undervalue and/or misfeasance. The company was insolvent at all material times. Both are jointly and severally liable to restore the sums to the company under s.212 of the Insolvency Act 1986.

Court Disposition

Claims against Sukhjit Ghuman and Kiranjit Ghuman succeed. Claims against C E Security Limited compromised by Tomlin order.

Orders

  • Sukhjit Ghuman and Kiranjit Ghuman are jointly and severally liable to restore £174,682.29, £38,333.48, £125,591.86, and £68,827.01 to Octavian Security Limited under s.212 of the Insolvency Act 1986.